N.Y. Personal Property Law § 402: Provisions of retail instalment contracts and obligations

§ 402. Provisions of retail instalment contracts and obligations. 1. A

retail instalment contract or obligation shall be dated and in writing;

the printed portion thereof shall be in at least eight point type.

2. A contract or obligation shall contain the entire agreement of the

parties with respect to the goods and services, including any promise,

whether made in writing or orally, by the seller, made as an inducement

to the buyer to become a party to the contract or which is part of the

contract or which is made incidental to negotiations between the seller

and the buyer with respect to the sale of the goods or services that are

the subject of the contract, that the seller will compensate the buyer

for referring customers or prospective customers to the seller for goods

or services which the seller has for sale or for referring the seller to

such customers or prospective customers. In any case in which, pursuant

to the preceding provisions, the contract contains a promise to

compensate the buyer for referring customers or prospective customers to

the seller or the seller to such customers, the contract must contain a

provision to the effect that the amount otherwise owing under the

contract at any time is reduced by the amount of compensation owing

pursuant to such promise, and:

(a) Both at the top of the contract or obligation and directly above

the space reserved for the signature of the buyer, the words RETAIL

INSTALMENT CONTRACT or RETAIL INSTALMENT OBLIGATION, as the case may be,

in at least ten point bold type; and

(b) Either a notice in at least eight point bold type reading as

follows: NOTICE TO THE BUYER: 1. Do not sign this agreement before you

read it or if it contains any blank space. 2. You are entitled to a

completely filled in copy of this agreement. 3. Under the law, you have

the right to pay off in advance the full amount due and under certain

conditions to obtain a partial refund of the credit service charge or a

notice in at least eight point bold type reading as follows: NOTICE TO

THE BUYER: 1. Do not sign this agreement before you read it or if it

contains any blank space. 2. You are entitled to a completely filled in

copy of this agreement. 3. Under the law, you have the right to pay off

in advance the full amount due. If you do so, you may, depending on the

nature of the credit service charge, either: (a) prepay without penalty,

or (b) under certain circumstances obtain a rebate of the credit service

charge.

3. A contract or obligation shall:

(a) Contain the names of the seller and the buyer, the place of

business of the seller, the residence or place of business of the buyer

as specified by the buyer and an adequate description of the services

and goods (including the make and model, if any, in the case of goods

customarily sold by make and model); and

(b) Set forth the following items:

(1) All items required to be disclosed by the act of congress entitled

"Truth in Lending Act" and the regulations thereunder, as such act and

regulations may from time to time be amended;

(2) If any instalment substantially exceeds in amount any prior

instalment other than the down-payment, contain the following legend

printed in ten point bold type or typewritten: THIS CONTRACT IS NOT

PAYABLE IN INSTALMENTS OF EQUAL AMOUNTS: followed, if there be but one

larger instalment, by: AN INSTALMENT OF $..........WILL BE DUE ON

..........or, if there be more than one larger instalment, by: LARGER

INSTALMENTS WILL BE DUE AS FOLLOWS.........(insert the amount or amounts

of every larger instalment and its due date.) In the case of a retail

instalment obligation, OBLIGATION shall be substituted for CONTRACT in

the required legend. If the credit service charge with respect to the

contract or obligation is calculated pursuant to subdivision four of

section four hundred four of this article, the disclosure provided for

in this subparagraph may be omitted.

4. No contract or obligation shall be signed by the buyer when it

contains blank spaces to be filled in after it has been signed; however,

if delivery of the goods is not made at the time of the execution of the

contract or obligation and it so provides, the identifying numbers or

marks of the goods and the due date of the first instalment may be left

blank and later inserted by the seller in the seller's counterpart of

the contract or obligation after it has been signed by the buyer.

5. If the cost of any credit unemployment, group credit life or other

insurance is included in the contract or obligation and a separate

charge is made to the buyer for such insurance:

(a) The contract or obligation shall state whether the insurance is to

be procured by the buyer or the seller;

(b) The amount, if any, so included for such insurance, shall not

exceed the premiums chargeable in accordance with rate filings made with

the superintendent of financial services for such insurance by the

insurer; and, if such group credit life or other insurance is cancelled,

the refund for unearned insurance premiums received or receivable by the

holder of the contract, or the excess of the amount included in the

contract for group credit life insurance over the premiums paid or

payable by the holder of the contract therefor, together with, in either

case, the unearned portion of the credit service charge applicable

thereto, shall be credited to the final maturing instalments of the

retail instalment contract, provided that no such credit need be made if

the amount thereof would be less than one dollar; and

(c) If the insurance is to be procured by the seller or holder, he

shall, within thirty days after delivery of the goods or furnishing of

the services under the contract or obligation, deliver, mail or cause to

be mailed to the buyer, at his address as specified in the contract or

obligation, a notice thereof or a copy of the policy or policies of

insurance or a certificate or certificates of the insurance so procured.

6. A contract or obligation may provide for the payment by the buyer

of a delinquency and collection charge on each instalment in default for

a period of not less than ten days in an amount not in excess of the

rate provided for in the contract or obligation on such instalment

provided that only one such delinquency and collection charge may be

collected on any such instalment regardless of the period during which

it remains in default.

6-a. A provision in a contract or obligation which provides for the

payment of attorney's fees or the costs of attorney's services incurred

in a legal action or proceeding for collection shall be null and void.

6-b. A provision in a contract or obligation which provides for waiver

of the right to impose any counterclaim or offset arising out of a

breach of that contract or obligation by the seller shall be void and

unenforceable.

7. All of the terms of an obligation need not be contained in a single

document but if they are not then there shall be an original document

executed by the parties containing provisions making it applicable to

purchases of goods or services, which may not exceed a cash sale price

of one hundred seventy-five dollars on each purchase, to be made by the

buyer from time to time from a retail seller, which document, together

with other written statements relating to the sale of such goods or

services shall constitute a retail instalment obligation and shall

contain the entire agreement of the parties. In such cases, the original

document shall contain those items required to be disclosed by the act

of congress entitled "Truth in Lending Act" and the regulations

thereunder, as such act and regulations may from time to time be amended

and shall further contain:

(i) a legend as provided in paragraph (a) of subdivision two hereof,

(ii) a notice to the buyer as provided in paragraph (b) of subdivision

two hereof,

(iii) the names of the seller and the buyer,

(iv) the place of business of the seller and the residence or place of

business of the buyer as specified by the buyer,

(v) the number of instalment payments, and

(vi) the amount or rate of the credit service charge applicable to

purchases thereunder.

At the time of each purchase under such document, the seller shall

give the buyer statements which shall contain at the top thereof a

legend in at least eight-point bold type: PART OF A RETAIL INSTALMENT

OBLIGATION and an adequate description of the goods, accessories and

services sold or furnished (including the make and model, if any, in the

case of goods customarily sold by make and model) and shall further

contain those items required to be disclosed by the act of congress

entitled "Truth in Lending Act" and the regulations thereunder, as such

act and regulations may from time to time be amended. If the seller does

not deliver to the buyer at the time of each purchase under such

original document a statement in compliance with the act of congress

entitled "Truth in Lending Act" and the regulations thereunder, as such

act and regulations may from time to time be amended, the seller shall

promptly thereafter, and in any event within ten days from the date of

such purchase, deliver, mail or cause to be mailed to the buyer at his

address shown on the seller's records, such statement. Unless the seller

does so, the buyer shall have an unconditional right to cancel such

purchase and to receive an immediate refund of any payments made and

re-delivery of all goods traded in to the seller on account of or in

contemplation of such purchase; upon the written request of the buyer

the seller shall prove the accuracy of the calculations in such

statement.

Such statement with respect to the first such purchase shall, combined

with the original document, constitute the obligation for such purchase;

and, on each succeeding purchase pursuant to such original document, the

obligation therefor as represented by such original document and such

statement shall constitute a subsequent obligation under section four

hundred ten.