16 C.F.R. § 437.2
The obligation to furnish written documents
In connection with the offer for sale, sale, or promotion of a business opportunity, it is a violation of this Rule and an unfair or deceptive act or practice in violation of Section 5 of the Federal Trade Commission Act (“FTC Act”) for any seller to fail to furnish a prospective purchaser with the material information required by §§ 437.3(a) and 437.4(a) of this part in writing at least seven calendar days before the earlier of the time that the prospective purchaser:
(a) Signs any contract in connection with the business opportunity sale; or
(b) Makes a payment or provides other consideration to the seller, directly or indirectly through a third party.
Notes of Decisions
Cited in 2
cases (1 in the last 5 years), 2011–2023 · leading case: Roberts v. C.R. England, Inc., 827 F. Supp. 2d 1078 (N.D. Cal. 2011).
Roberts v. C.R. England, Inc., 827 F. Supp. 2d 1078 (N.D. Cal. 2011). “” 16 C.F.R. § 437.2 (emphasis added). Still, the omission, without more, is not a persuasive indication that the legislature intended the statute to cover a business arrangement such as that presented in this case.”
Fed. Trade Comm'n v. Automators LLC (S.D. Cal. 2023). “Failing to provide any consumer, potential purchaser, or investor with 17 disclosure documents in the form and manner required by 16 C.F.R. §§ 437.2 , 437.3(a)(1)- 18 (5), and 437.”
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