Michigan Laws 492.114a – Evidence of obligation; holder subject to claims and defenses of buyer; limitation on buyer’s recovery; mandatory provision in installment sale contract; sales to which section applicable; action
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Terms Used In Michigan Laws 492.114a
- buyer: means a person that buys, hires, or leases a motor vehicle for personal, family, or household use, and not for commercial, business, or agricultural use, under an installment sale contract or a legal successor in interest to that person. See Michigan Laws 492.102
- Contract: A legal written agreement that becomes binding when signed.
- contract: means an agreement for the retail sale of a motor vehicle, or that has a similar purpose or effect, under which part or all of the price is payable in 2 or more scheduled payments subsequent to the making of the agreement or under which the obligor undertakes to make 2 or more scheduled payments or deposits that can be used to pay part or all of the purchase price, whether or not the seller has retained a security interest in the motor vehicle or has taken collateral security for the buyer's obligation, and any extension, deferment, renewal, or other revision of that agreement. See Michigan Laws 492.102
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Holder: means a seller or other person that is currently entitled to the rights of a seller under an installment sale contract. See Michigan Laws 492.102
- Litigation: A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
- Motor vehicle: means a self-propelled device by which a person or property may be transported upon a public highway or, subject to subparagraph (iv), a recreational vehicle. See Michigan Laws 492.102
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Person: means an individual, partnership, association, corporation, limited liability company, governmental entity, or any other legal entity. See Michigan Laws 492.102
- Retail sale: means a sale of a motor vehicle for use by a buyer or for the benefit or satisfaction that the buyer may derive from the use of the motor vehicle by another. See Michigan Laws 492.102
- seller: means a person engaged in the business of selling, offering for sale, hiring, or leasing motor vehicles under installment sale contracts or a legal successor in interest to that person. See Michigan Laws 492.102
- Time balance: means the sum of the principal amount financed and the finance charge. See Michigan Laws 492.102
(a) A person shall not take a negotiable instrument, other than a currently dated check or draft, as evidence of the obligation of the buyer in a retail sale of a motor vehicle.
(b) A holder of an installment sale contract is subject to all the claims and defenses of the buyer arising out of the installment transaction, but the buyer’s recovery shall not exceed the amount paid to the holder thereunder.
(c) An installment sale contract entered into under this act shall contain the following provision in at least 10-point boldface type:
| Notice |
| Any holder of this consumer credit contract is subject to all claims and defenses which the debtor could assert against the seller of goods or services obtained pursuant hereto or with the proceeds hereof. Recovery hereunder by the debtor shall not exceed amounts paid by the debtor hereunder. |
(d) This section applies only to sales made pursuant to an installment sale contract.
(e) In an action by the holder to collect a debt from the buyer, the court, after notice to the buyer and a hearing, may designate a disinterested third party to receive payments from the buyer. If the court finds that the buyer will not be unreasonably burdened nor deprived of adequate transportation by making the payments, an amount up to but not greater than the amount of each time balance payment due shall be paid to the disinterested third party as it becomes due during the period of litigation. At the conclusion of the litigation these payments shall be distributed pursuant to the judgment of the court.