(a) Service contracts shall state that the contract holder may return the contract within:

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Terms Used In Hawaii Revised Statutes 481X-7

  • Contract: A legal written agreement that becomes binding when signed.
  • Contract holder: means a person who is the purchaser or holder of a service contract. See Hawaii Revised Statutes 481X-2
  • month: means a calendar month; and the word "year" a calendar year. See Hawaii Revised Statutes 1-20
  • Provider: means a person who is contractually obligated to the service contract holder under the terms of the service contract. See Hawaii Revised Statutes 481X-2
  • Service contract: means a contract or agreement for a separately stated consideration and a specific duration, to perform or indemnify the repair, replacement, or maintenance of property for operational or structural failure due either to a defect in materials or artisanship, or to normal wear and tear, with or without additional provision for incidental payment or indemnity under limited circumstances, including but not limited to towing, rental, and emergency road service. See Hawaii Revised Statutes 481X-2
(1) Thirty days of the date that the contract was mailed to the contract holder;
(2) Twenty days of the date the contract was delivered to the contract holder, if the contract was delivered at the time of sale; or
(3) A longer time period as specified in the service contract.
(b) Upon return of the service contract to the provider within the applicable time period, and if no claim has been made under the service contract prior to its return to the provider, the service contract shall be void and the provider shall refund to, or credit the account of, the contract holder with the full purchase price of the service contract. A ten per cent penalty per month shall be added to a refund that is not paid or credited within forty-five days after the return of the service contract to the provider.
(c) The right to void a service contract under subsection (b) shall not be transferred and shall apply only to the original service contract purchaser upon the terms and conditions provided in the contract and consistent with this chapter.
(d) Upon cancellation of a service contract by the provider, the provider, at least five days prior to cancellation, shall mail to the contract holder at the contract holder’s last known address, a written prior notice of cancellation that states the effective date of the cancellation; provided that prior notice under this subsection shall not be required if cancellation is for:

(1) Nonpayment of the provider’s fee for the service provided under the service contract;
(2) A material misrepresentation by the contract holder to the provider; or
(3) A substantial breach of duties of the contract holder under the service contract, relating to a covered product or its use.
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