Powell Trachtman Logan Carrle & Lombardo

Design Professional's Practice Bulletin

Volume 6, Number 1 — July 2002
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This Bulletin addresses recent developments affecting Design Professionals as well as business concerns as important as the specific professional and technical issues they face.

Editors: Neil P. Clain and Richard J. Davies

The Design Professional and the Vacuum Cleaner Salesman – We see the difference, but the courts might not.

By Pamela Hans, Esquire

Do you think of your profession as having much in common with door-to-door vacuum sales? What about sales of life insurance? Are you selling encyclopedias? Amway? Avon? What about carpet cleaners? Lawn-care services? Do you think of yourself as a door-to-door salesman (or woman)? Do you consider your clients to be unsophisticated individuals in need of protection from unscrupulous architects and engineers trying to execute pressure sales…? Of course you do not…but the courts in Pennsylvania might.

A Pennsylvania statute enacted in 1996 to address unscrupulous door-to-door sales tactics has recently attracted our attention because of its potential for application to the design-professional’s marketing efforts. The statute applies to “home sales” contracts and provides in part that:

Where goods or services having a sale price of twenty-five dollars ($25) or more are sold or contracted to be sold to a buyer, as a result of, or in connection with a contact with or call on the buyer or resident at his residence either in person or by telephone, that consumer may avoid the contract or sale by notifying, in writing, the seller within three full business days following the day on which the contract or sale was made and by returning or holding available for return to the seller, in its original condition, any merchandise received under the contract or sale. Such notice of rescission shall be effective upon depositing the same in the United States mail or upon other service which gives the seller notice of rescission. 73 P.S. § 201-7 (Emphasis supplied).

The statute also requires the seller to provide the buyer with notice of the buyer’s right to cancellation.

This consumer protection measure was enacted presumably to protect unsuspecting consumers from being bound by overhasty purchases made at the urging of the door-to-door sales person peddling his wares or services. However, according to the plain meaning of its terms, the law can be applied to the services provided by architects and engineers when the contract for goods or services is entered into at the owners’ residence or is initiated by a “contact with” the buyer at his residence. While the statute by its terms applies to person-to-person meetings and telephone calls, neither statute nor case law expressly defines “contact,” and so it is possible that courts will consider email, fax, or other electronic communication between a buyer and seller as constituting “contact.”

Consider the following scenarios:

You receive a telephone call from someone who, enamored with the acoustics of the new Kimmel Center, wants to have the acoustics replicated in his home theater. He invites you to his home and asks that you get to work on the project immediately.You work on the project for months.Then you receive a telephone call…he has changed his mind.

You receive an email from the president of a Fortune 100 Company, working from home of course, asking for your input in the design of a new vacation home.You engage in lengthy correspondence by fax and email, and eventually enter into a written contract without the required notice provision. You dedicate substantial resources of your firm to this project.Three months later, you get a telephone call advising that the project is off.

A homeowner finds your listing in the telephone directory and calls you, from his home, to discuss possible renovations to his house.You meet to discuss the project at his home and you are careful to have him sign a written contract for the work.You put in many hours of work, and when the design is complete you call the owner to let him know. He tells you that he has changed his mind, he does not want to go forward with the project – and refuses to pay you a dime for the work and also wants you to return the money he has already paid.

Can the buyers described cancel without paying you for all the time and resources you dedicated to their projects? Can they get away with this?

There are no published decisions applying the statute to design professionals. However, we do know that one judge, from the bench, ruled that it did apply to the provision of professional design services and dismissed the fee claims of an architect who failed to provide the required notice of the right to cancel along with the agreement with the owner.

Additionally, the courts have applied this statute to transactions among individuals we would not ordinarily think require such “consumer protection.” In one case, Burke v. Yingling 446 Pa. Super 16,666 A 2d 288 (1995), a buyer, whom the court characterized as “sophisticated,” initiated contact with an individual who sold customized audio-video systems. The parties conducted lengthy negotiations, and on more than one occasion the seller went to the buyer’s home to discuss the transaction. After a few months, the parties finally agreed on a contract, but without the required notice of the buyer’s right to cancel. Once the equipment was installed the purchaser changed his mind. He rescinded the contract, returned the equipment, and refused to pay the seller a dime, based on the failure of the seller to provide the required notice. The court agreed with the buyer, although he was certainly a sophisticated individual who had many weeks (even months) to decide on the purchase. The court decided that the statute applied, according to the plain meaning of its terms to this transaction, and the particular circumstances of the transaction could not be used to avoid the statutorily mandated result.

Yet, there are some case decisions that suggest that the courts will examine the particulars of the sale to determine if the statute’s terms were intended to apply to such a transaction. In Lou Botti Construction v. Harbulak 760 A.2d 896 (Pa. Super. 2000), the court concluded that since the contract was entered into as a result of a prior social dating relationship between the buyer and seller, the contract was not initiated “as a result of or in connection with” a contact at the buyer’s residence. Accordingly, since the buyer did not fall within the class of persons apparently envisioned by the consumer protection statute, the seller was not penalized for failing to include the requisite notice.

Whether a prior professional relationship, as opposed to a social relationship, would warrant a similar finding that the statute did not apply has not been decided.

The lack of a definitive answer to the question of whether or not the statute will apply to your agreement seems to create a problem. However, it is a problem that can be easily avoided; when in doubt, provide the required notice outlined in the statute. It can be prepared for each contract without much effort. Its attachment should not ring any alarms or require undue scrutiny from the client since it is mandated by statute and identified as such, and many buyers have seen similar notices for other transactions (e.g., home and car sales). We have prepared the required notice for certain clients, particularly those providing residential design services, to provide such “an ounce of prevention.”

This bulletin is intended for general information purposes only and does not constitute legal advice. The reader should consult with legal counsel to determine how laws, suggestions and illustrations apply to specific situations.