Section 407.410

Title XXVI TRADE AND COMMERCE

Chapter 407

Effective - 28 Aug 1975, 2 histories   

  407.410.  Double damages, when — limitation on actions — cancellation of franchise without notice grounds for award of damages. — 1.  Any contract made in violation of section 407.405 is void and any person who, directly or through the use of agents or intermediaries, induces or causes another person to participate in a pyramid sales scheme will be liable to that person in civil damages in an amount equal to the sum of twice the amount of consideration paid, and in the case of any successful action to enforce such liability, the costs of the action together with a reasonable attorney's fee, as determined by the court.  An action under this section may be brought in the circuit court having venue within five years from the date on which the consideration was paid.

  2.  A franchisee suffering damage as a result of the failure to give notice as required of the cancellation or termination of a franchise, may institute legal proceedings under the provisions of sections 407.400 to 407.420 against the franchisor who cancelled or terminated his franchise in the circuit court for the circuit in which the franchisor or his agent resides or can be located.  When the franchisee prevails in any such action in the circuit court, he may be awarded a recovery of damages sustained to include loss of goodwill, costs of the suit, and any equitable relief that the court deems proper.

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(L. 1974 H.B. 1132 § 3, A.L. 1975 H.B. 810 § 3)

(1980) General intent of the legislature in the enactment of statutes prohibiting pyramid sales schemes is to buttress a strong public policy against pyramid sales schemes involving cover or disguise of some seemingly legitimate commercial transaction. State ex rel. Ashcroft v. Wahl (A.), 600 S.W.2d 175.

(1987) Franchisor who fails to provide time notice of termination to a franchisee under section 407.405 the franchisee is not entitled to recover punitive damages in an action brought pursuant to this section. Ridings v. Thoele, Inc., 739 S.W.2d 547 (Mo. banc.).