(1) A future service contract shall be in writing and for a stated number of months. No contractor may request or receive more than 12 months' unearned customer fee in prepayment from a customer.
(2) No future service contract may contain a renewal clause, or provide that the customer has an option to enter into a subsequent contract at a stated price.
(3) A future service contract shall provide that assignees, purchasers, or other transferees of the rights of the contractor are subject to all claims and defenses of the customer against the contractor arising out of the future service contract.
(4) A customer has the right to cancel, for whatever reason, within the first 3 months of a future service contract or within 3 days of delivery of the customer's first purchase of goods or rental of videotapes costing more than $25 made through the contract, whichever occurs first. All unearned customer fees shall be refunded promptly upon cancellation. In the event of cancellation within the first 15 days of the contract no penalty may be assessed to the customer. Every cancellation shall be made in writing by the customer to the contractor, and is deemed to be made when mailed or hand delivered to the contractor. Every refund shall be made within 20 days of the request for cancellation.
(5) A contractor shall provide a customer with written notice, at or before the time of execution of the contract, of the customer's right to cancel under this section.
(6) Upon cancellation the member is obligated to pay for any goods ordered for purchase or videotape ordered for rental, if ordered prior to cancellation subsequent to the 3rd business day after contracting and delivered at any time within 3 months after such cancellation.