APPEAL from the Circuit Court of McLean County; the Hon. JAMES
KNECHT, Judge, presiding.
MR. JUSTICE WEBBER DELIVERED THE OPINION OF THE COURT:
This appeal had its genesis in a simple pedestrian transaction having to do with home improvements. It has grown in stature until now the full panoply of the Consumer Fraud and Deceptive Business Practices Act of Illinois (Ill. Rev. Stat. 1975, ch. 121 1/2, par. 261 et seq.) and the Truth in Lending Act of the United States (15 U.S.C.A. § 1631 et seq.) are called into operation.
In the latter part of February 1973, a salesman representing the plaintiff called upon Herbert Cottier and obtained from him a contract for the purchase and installation of siding on his home. During the pendency of these proceedings Herbert Cottier died and his son, Dennis, was substituted as a party defendant, he being his father's administrator.
Herbert made no payments on the contract and on February 3, 1976, almost three years later, his attorney addressed a letter to plaintiff which stated in part:
"* * * You are hereby notified that I am on behalf of Mr. Cottier electing to cancel this contract. You may go to his residence and remove the siding from his home at your convenience."
It is admitted that Hurlbert received the letter.
On July 27, 1976, plaintiff filed the instant suit on the contract, seeking the purchase price and attorney's fees. Defendant first answered and later filed an affirmative defense based on the Consumer Fraud and Deceptive Business Practices Act, specifically section 2B thereof (Ill. Rev. Stat. 1975, ch. 121 1/2, par. 262B), which reads:
"Where merchandise having a cash sales price of $25 or more is sold or contracted to be sold whether under a single contract or under multiple contracts, to a consumer as a result of or in connection with a salesman's direct contact with or call on the consumer at his residence without the consumer's soliciting the contact or call, that consumer may avoid the contract or sale by notifying the seller within 3 full business days following that day on which the contract was signed or the sale was made and by returning to the seller, in its original condition, any merchandise delivered to him under the contract or sale. At the time the sale is made or the contract signed, the salesman shall furnish the buyer with a written receipt or contract containing a `Notice of Cancellation' informing the buyer that he may cancel the sale at any time within such 3 days. Such written `Notice of Cancellation' may be sent by the buyer to the seller to cancel the contract. The 3 day period provided for in this Section does not commence until the Notice of Cancellation and the consumer is furnished the address or phone number at which such notice to the seller can be given. If those conditions are met, the seller must return to the consumer the full amount of any payment made or consideration given under the contract or for the merchandise. It is an unlawful practice within the meaning of this Act for a seller to refuse to make full refund as required by this Section or for a seller to use any undue influence, coercion, intentional misrepresentation or any other wilful act or representation to interfere with the consumer's exercise of his rights under this Section."
It is further admitted that the contract contained no "Notice of Cancellation" as required by section 2B. A bench trial was held in the circuit court of McLean County. The court entered an order granting judgment to the plaintiff for the contract price plus attorney's fees. The order found that "the original contract failed to include a `Notice of Cancellation' clause as required by section 262B of ch. 121 1/2, Ill. Rev. Stat. (1975)" but that "in the circumstances of this case, the lack of a `notice of cancellation' does not void the contract." This appeal followed.
At the outset we are faced with a statute which is broad in scope but which fails to make provision for the specific situation involved here. No question is raised but that the sale was made at Cottier's residence; it was for more than $25; and Cottier did not solicit the call. However, the statute contains another provision that the buyer "may avoid the contract * * * by returning to the seller, in its original condition, any merchandise delivered to him under the contract or sale." (Emphasis added.) The statutory purpose is plain it is to restore the status quo ante; and it will work well in cases of vacuum cleaners and encyclopedias, but it cannot be subserved when siding, or similar materials, which have been substantially altered in their application, are the subject matter of the contract.
Thus the dilemma either the statute is not intended to cover home improvements on the theory that there is no consumer fraud perpetrated in this area (a doctrine quite contrary to human experience), or else the legislature intended that any gaps be supplied by judicial construction.
1 Two things lead us to the conclusion that the latter is the proper course of action. First, the Act itself contains the mandate (section 11a) that it shall be liberally construed in order to effectuate its purpose. Second, section 2 of the Act directs that consideration be given in construing that section to Federal law, specifically section 5(a) of the Federal Trade Commission Act (15 U.S.C.A. § 45). While the latter is restricted to section 2 in determining the nature of unlawful practices, it appears to us that the legislature intended consultation of Federal laws and Federal court decisions generally when the Illinois statute appears deficient.
The Federal statute which we find to be closest akin to our act in regard to rescission of contracts is a part of what is commonly referred to as the Truth in Lending Act, specifically the rescission provisions which are contained in 15 U.S.C.A. § 1635 (Supp. 1977), which read:
"(a) Except as otherwise provided in this section, in the case of any consumer credit transaction in which a security interest, including any such interest arising by operation of law, is or will be retained or acquired in any real property which is used or is expected to be used as the residence of the person to whom credit is extended, the obligor shall have the right to rescind the transaction until midnight of the third business day following the consummation of the transaction or the delivery of the disclosures required under this section and all other material disclosures required under this part, whichever is later, by notifying the creditor, in accordance with regulations of the Board, of his intention to do so. The creditor shall clearly and conspicuously disclose, in accordance with regulations of the Board, to any obligor in a transaction subject to this section the rights ...