Michigan Laws 328.226 – Prepaid funeral contract not in writing as voidable; agreement as to rate of interest; interest added or deducted in advance; computation of interest; financing of contract
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(1) A prepaid contract that is not in writing is voidable by any party to the prepaid contract.
(2) A prepaid contract made in violation of this act or with a person who is not registered pursuant to section 6 is voidable by the contract buyer or by a personal representative of the contract beneficiary.
Terms Used In Michigan Laws 328.226
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Contract: A legal written agreement that becomes binding when signed.
- Contract buyer: means an individual, including a contract beneficiary, who purchases merchandise or funeral or cemetery services pursuant to a prepaid contract. See Michigan Laws 328.213
- Contract seller: means a person who sells, makes available, or provides prepaid contracts. See Michigan Laws 328.213
- in writing: shall be construed to include printing, engraving, and lithographing; except that if the written signature of a person is required by law, the signature shall be the proper handwriting of the person or, if the person is unable to write, the person's proper mark, which may be, unless otherwise expressly prohibited by law, a clear and classifiable fingerprint of the person made with ink or another substance. See Michigan Laws 8.3q
- Person: means an individual, group of individuals, sole proprietorship, partnership, limited liability company, association, corporation, government agency, cemetery, or a combination of these legal entities. See Michigan Laws 328.215
- Prepaid contract: means a contract requiring payment in advance for funeral or cemetery services or merchandise, physical delivery and retention of which would occur after death under a guaranteed price contract or a nonguaranteed price contract. See Michigan Laws 328.215
(3) The parties to a prepaid contract may agree in writing for the payment of a rate of interest not to exceed 10.5% per annum with the following conditions:
(a) A prepaid contract made under this act shall not provide for a rate of interest added or deducted in advance. Interest shall be computed from time to time only on the basis of unpaid balances.
(b) A prepaid contract made under this act shall not provide that the rate of interest initially effective may be increased for any reason.
(c) A contract seller shall not impose any fees or charges in addition to interest in connection with the financing of a prepaid contract.
(4) A contract seller shall not offer financing or offer to obtain financing of a prepaid contract under terms and conditions other than allowed by this section.