Prohibited contract provisions

Prohibited contract provisions. (a) No contract for dating referral services shall require payments or financing over a period in excess of 3 years from the date the contract is entered into, nor shall the term of any contract be measured by the life of the customer. The initial term of services to be rendered under the contract may not extend over a period of more than 2 years from the date the parties enter into the contract, provided that the customer may be given an option to renew the contract for consecutive periods of not more than one year each for a reasonable consideration not less than 10% of the cash price of the original membership. (b) No contract for dating referral services shall require or entail the execution of any note by the customer which, when separately negotiated, will cut off as to third parties any right of action or defense which the customer may have against the dating referral enterprise. No right of action or defense arising out of a contract for dating referral services that the customer has against the enterprise shall be cut off by assignment of the contract whether or not the assignee acquires the contract in good faith and for value. Such an assignee is not a holder in due course. (Source: P.A. 87-450.)