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Chapter 19.178 RCW

GOING OUT OF BUSINESS SALES

RCW Sections

19.178.010Definitions.
19.178.020Notice -- Recording -- Display -- Service on attorney general.
19.178.030Notice -- Recording -- Procedure.
19.178.040Inventory list -- Compilation of purchase orders.
19.178.050Business identification number -- Ownership interest purposes limited -- Application of consumer protection act.
19.178.060Time limit.
19.178.070Merchandise -- Consigned or not owned by seller -- Transfer -- Additional.
19.178.080Continuing business prohibited -- Exception.
19.178.090Means for continuation of closing business location prohibited.
19.178.100Advertising -- Moving sale.
19.178.110Violations -- Application of consumer protection act.
19.178.120Violation -- False or incorrect notice -- Penalty.
19.178.130Proceedings instituted by attorney general or prosecuting attorney.
19.178.140State preemption.
19.178.900Application of chapter -- Exceptions.
19.178.901Severability -- 1993 c 456.


19.178.010
Definitions.

Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

     (1) "Affiliated business" means a business or business location that is directly or indirectly controlled by or under common control with the business location or locations listed in the notice of the sale or that has a common ownership interest in the merchandise to be sold with the business location or locations listed in the notice of the sale.

     (2) "Going out of business sale" means a sale or auction advertised or held out to the public as the disposal of merchandise in anticipation of cessation of business. This includes but is not limited to a sale or auction advertised or held out to the public as a "going out of business sale," a "closing out sale," a "quitting business sale," a "loss of lease sale," a "must vacate sale," a "liquidation sale," a "bankruptcy sale," a "sale to prevent bankruptcy," or another description suggesting price reduction due to the imminent closure of the business.

     (3) "Merchandise" means goods, wares, or other property or services capable of being the object of a sale regulated under this chapter.

     (4) "Moving sale" means a sale or auction advertised or held out to the public in anticipation of a relocation of the business to within a thirty-mile radius of its existing location.

     (5) "Person" means, where applicable, natural persons, corporations, trusts, unincorporated associations, partnerships, or other legal entities.

[1993 c 456 § 2.]




19.178.020
Notice — Recording — Display — Service on attorney general.

(1) It is unlawful for a person to sell, offer for sale, or advertise for sale merchandise at a going out of business sale without first recording a notice of the going out of business sale and executing an affidavit of inventory under this chapter.

     (2) The notice of the sale must be displayed in a prominent place on the premises where a going out of business sale is being conducted.

     (3) Where a going out of business sale is part of a bankruptcy, receivership, or other court-ordered action, a person required by this chapter to record a notice of the sale shall serve a copy of the petition, motion, proposed order, or other pleading requesting court approval of the sale on the attorney general no less than seven days before the date on which an action may be taken related to the conduct of the sale by a court.

[1993 c 456 § 3.]




19.178.030
Notice — Recording — Procedure.

(1) A person conducting a going out of business sale shall record a notice of the sale with the county auditor at least fourteen days before the beginning date of the sale.

     (2) The notice must be signed under oath and acknowledged and must require, and the person signing the notice shall set forth, the following facts and information regarding the sale:

     (a) The name, address, telephone number, and Washington state business identification number of the owner of the merchandise to be sold. If the owner is a corporation, trust, unincorporated association, partnership, or other legal entity, the person signing the notice must be an officer of the entity and must identify his or her title;

     (b) The name, address, and telephone number of the person who will be in charge and responsible for the conduct of the sale;

     (c) The descriptive name, location or locations, and beginning and ending dates of the sale;

     (d) Whether a person who has an ownership interest in the business or in the merchandise to be sold has conducted a going out of business sale within one year of recording the notice;

     (e) Whether a person who has an ownership interest in the business or in the merchandise to be sold established or acquired an ownership interest in the business within six months of recording the notice; and

     (f) A statement that:

     (i) The merchandise ordered during the thirty days before recording the notice consists only of bona fide orders made in the usual course of business and does not contain merchandise taken on consignment or otherwise;

     (ii) No merchandise transferred from an affiliated business was transferred in contemplation of conducting the sale;

     (iii) No merchandise will be ordered, taken on consignment, or transferred from an affiliated business after the notice is recorded or during the sale;

     (iv) No person who has an ownership interest in the business or in the merchandise to be sold established or acquired an interest in the business or in the merchandise to be sold solely or principally for the purpose of conducting a going out of business sale;

     (v) The business will be discontinued after the ending date of the sale and no merchandise held out for sale will be subsequently offered for sale to the public by anyone who had an ownership interest in the business or in the merchandise offered for sale; and

     (vi) No person who has an ownership interest in the business or in the merchandise to be sold is subject to a court order resulting from a civil enforcement action under the consumer protection act for a violation of this chapter or the type of conduct prohibited by this chapter.

[1993 c 456 § 5.]




19.178.040
Inventory list — Compilation of purchase orders.

(1) A person conducting a going out of business sale shall, before recording the notice, make either an inventory list of the merchandise to be sold or a compilation of purchase orders issued by the business in the thirty days before recording the notice of the sale.

     (2) If a person elects to make an inventory list:

     (a) The inventory list must identify the merchandise and include the quantity of each item and the price at which each item was offered for sale within one week of recording the notice;

     (b) The inventory list must identify items ordered within thirty days of recording the notice but not yet received by the business;

     (c) The inventory list must be permanently attached to an affidavit executed by the person recording the notice of the sale stating that the inventory list is a true and correct inventory of merchandise owned by the business conducting the sale as of the date the affidavit is executed; and

     (d) No item may be offered for sale at a going out of business sale unless the item is included in the inventory list for the sale.

     (3) If a person elects to make a purchase order compilation, the compilation must be permanently attached to an affidavit executed by the person recording the notice of the sale stating that the compilation is a true and correct compilation of the purchase orders issued by the business in the thirty days before recording the notice of the sale.

     (4) The affidavit must be signed under oath and acknowledged before a notary public. Each page of the inventory list or purchase order compilation must be marked in some form by a notary public to verify its identity as part of the inventory list or purchase order compilation for the going out of business sale.

     (5) A person conducting a going out of business sale shall maintain possession of the affidavit and attached inventory list or purchase order compilation for three years after the ending date of the sale. The inventory list or purchase order compilation is admissible evidence of compliance or noncompliance with this chapter.

[1993 c 456 § 6.]




19.178.050
Business identification number — Ownership interest purposes limited — Application of consumer protection act.

(1) No person may conduct a going out of business sale except a person with a valid Washington state business identification number.

     (2) No person may conduct a going out of business sale if a person who has an ownership interest in the business or in the merchandise to be sold established or acquired an ownership interest in the business solely or principally for the purpose of conducting a going out of business sale. A person who has either conducted a going out of business sale within one year or established or acquired an interest in the business conducting the sale within six months of recording the notice is presumed to have established or acquired an interest in the business solely or principally for the purpose of conducting a going out of business sale.

     (3) No person may conduct a going out of business sale if a person who has an ownership interest in the business or in the merchandise to be sold is subject to a court order resulting from a civil enforcement action under the consumer protection act for a violation of this chapter or the type of conduct prohibited by this chapter.

[1993 c 456 § 7.]




19.178.060
Time limit.

No person may conduct a going out of business sale for more than sixty days from the beginning date of the sale.

[1993 c 456 § 8.]




19.178.070
Merchandise — Consigned or not owned by seller — Transfer — Additional.

(1) No person may sell consigned merchandise or other merchandise not owned by the person signing the notice at a going out of business sale. Merchandise ordered within thirty days of recording the notice of the sale may consist only of bona fide orders made in the usual course of business and may contain no merchandise taken on consignment or otherwise.

     (2) No person in contemplation of conducting a going out of business sale may transfer merchandise from an affiliated business or business location to the location or locations of the sale.

     (3) No person, after recording the notice of a going out of business sale, may buy or order merchandise, take merchandise on consignment, or receive a transfer of merchandise from an affiliated business or business location for the purpose of selling it at the sale or sell the merchandise in a going out of business sale.

[1993 c 456 § 9.]




19.178.080
Continuing business prohibited — Exception.

(1) No person may continue to conduct a going out of business sale beyond the ending date listed in the notice of the sale.

     (2) No person after conducting a going out of business sale may remain in business under any of the same ownership, or under the same or substantially the same trade name, or continue to offer for sale the same type of merchandise for a period of one year after the ending date of the sale unless the continuing business location was in operation before recording the notice for the closing business location.

     (3) For the purposes of this section, if a business entity that is prohibited from continuing a business under this section reformulates itself as a new entity or as an individual, whether by sale, merger, acquisition, bankruptcy, dissolution, or other transaction, for the purpose of continuing the business or profiting from the business, the successor entity or individual is considered the same person as the original entity. If an individual who is prohibited from continuing a business under this section forms a new business entity to continue the business, participate in the business, or profit from the business, that entity is considered the same person as the individual.

[1993 c 456 § 10.]




19.178.090
Means for continuation of closing business location prohibited.

No person may conduct a going out of business sale if any means have been established for continuation of the closing business location by the same owner, directly or indirectly, by corporation, trust, unincorporated association, partnership, or other legal entity under the same name or under a different name.

[1993 c 456 § 11.]




19.178.100
Advertising — Moving sale.

(1) No person may advertise a going out of business sale more than fourteen days before the beginning date of the sale. All advertising of the sale must state the beginning date and must clearly and prominently state the ending date of the sale. Except as provided in subsection (2) of this section, all advertising must be confined to or refer to the address or addresses and place or places of business specified in the notice as going out of business and may not state that other locations or affiliated businesses are cooperating with or participating in the sale unless the other locations or affiliated businesses are included in the notice.

     (2) Advertising broadcast on radio is not required to refer to the address or addresses of the business specified in the notice as going out of business, but must meet all other conditions of this section.

     (3) No advertising may contain false, misleading, or deceptive statements regarding the nature, duration, merchandise, or other terms of a going out of business sale.

     (4) Representations in advertising regarding price savings or discounts on sale merchandise must be bona fide and substantiated.

     (5) A moving sale may not be advertised for more than ninety days and may not occur more than once within a twenty-four month period.

[1993 c 456 § 12.]




19.178.110
Violations — Application of consumer protection act.

The legislature finds that the practices covered by this chapter are matters vitally affecting the public interest for the purpose of applying the consumer protection act, chapter 19.86 RCW. Violations of this chapter are not reasonable in relation to the development and preservation of business. A violation of this chapter is an unfair or deceptive act in trade or commerce and an unfair method of competition for the purpose of applying the consumer protection act, chapter 19.86 RCW.

[1993 c 456 § 1.]




19.178.120
Violation — False or incorrect notice — Penalty.

A person who knowingly violates this chapter or who knowingly gives false or incorrect information in a notice required by this chapter is guilty of a gross misdemeanor punishable under chapter 9A.20 RCW.

[1993 c 456 § 13.]




19.178.130
Proceedings instituted by attorney general or prosecuting attorney.

The attorney general or the proper prosecuting attorney may institute proceedings under this chapter.

[1993 c 456 § 14.]




19.178.140
State preemption.

The state of Washington fully occupies and preempts the entire field of regulating going out of business sales.

[1993 c 456 § 15.]




19.178.900
Application of chapter — Exceptions.

(1) This chapter shall apply only to persons who engage in the retail sale of merchandise in their regular course of business.

     (2) This chapter does not apply to:

     (a) Persons acting in accordance with their powers and duties as public officers, such as county sheriffs;

     (b) Bulk transfers as defined in *RCW
62A.6-102; or

     (c) Moving sales, except for RCW 19.178.100(5).

     (3) Going out of business sales of perishable merchandise or merchandise damaged by fire, smoke, or water are exempt from the requirement that the notice of the sale be recorded at least fourteen days before the beginning date of the sale.

[1993 c 456 § 4.]

Notes:

     *Reviser's note: RCW 62A.6-102 was repealed by 1993 c 395 § 6-101.




19.178.901
Severability — 1993 c 456.

If any provision of this chapter or its application to any person or circumstance is held invalid, the remainder of the chapter or the application of the provision to other persons or circumstances is not affected.

[1993 c 456 § 16.]