Michigan Laws 445.853 – Retail installment contract; requirements; size; notice to buyer; delivery of copy; nondelivery; provisions; contents of contract; transaction involving vehicle; terms; statement that seller reta
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Terms Used In Michigan Laws 445.853
- buyer: means a person that buys or agrees to buy goods or obtain services or agrees to have services rendered or furnished from a retail seller. See Michigan Laws 445.852
- Cash sale price: means the price of a good or service a retail buyer would pay if he or she paid for the good or service in cash, and that is stated in a retail installment contract or in a sales slip or other memorandum furnished by a retail seller to a retail buyer pursuant to a retail charge agreement for that good or service. See Michigan Laws 445.852
- Contract: A legal written agreement that becomes binding when signed.
- Finance charge: The total cost of credit a customer must pay on a consumer loan, including interest. The Truth in Lending Act requires disclosure of the finance charge. Source: OCC
- Goods: means all tangible chattels purchased primarily for personal, family, or household use and not for commercial, agricultural, or business use. See Michigan Laws 445.852
- Holder: means a retail seller of goods or services covered by a retail installment contract or retail charge agreement, or an assignee of that seller. See Michigan Laws 445.852
- 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
- Motor vehicle: means that term as defined in section 2 of the motor vehicle sales finance act, 1950 (Ex Sess) PA 27, MCL 492. See Michigan Laws 445.852
- Official fees: means fees prescribed by law and charged and paid by the seller or holder for filing, recording, or otherwise perfecting, releasing, or satisfying, a retained title, lien, or other security interest created by a retail installment transaction. See Michigan Laws 445.852
- Principal balance: means the cash sale price of the goods or services covered by a retail installment contract plus the amounts, if any, included in the cash sale price if a separate identified charge is made and stated in the contract for insurance or official fees, less the amount of the buyer's down payment in money or goods, or both. See Michigan Laws 445.852
- Retail charge agreement: means an instrument prescribing the terms of a secured or unsecured retail installment transaction that may be made under the instrument from time to time and under the terms of which a time price differential is to be computed in relation to the buyer's unpaid balance from time to time. See Michigan Laws 445.852
- Retail installment contract: means an instrument entered into in this state evidencing a secured or unsecured retail installment transaction, and includes a chattel mortgage, a security agreement, a conditional sale contract, or a bailment or lease contract if the bailment or lease contract requires the bailee or lessee to pay an amount equal to or greater than the value of the bailed or leased good, and additionally provides that the bailee or lessee shall become, for no additional consideration or for nominal consideration, the owner of the good on full compliance with the bailment or lease contract. See Michigan Laws 445.852
- Retail installment transaction: means any transaction in which a retail buyer purchases goods or services from a retail seller pursuant to a retail installment contract or a retail charge agreement that provides for a time price differential and under which the buyer agrees to pay the unpaid balance in 1 or more installments. See Michigan Laws 445.852
- seller: means a person regularly and principally engaged in the business of selling goods or services to retail buyers, but does not include the services of a professional person licensed by the state to perform legal or dental services or medical services as a medical doctor or a doctor of osteopathy. See Michigan Laws 445.852
- Services: means work, labor, advice, counseling, or instruction if purchased primarily for personal, family, or household use and not for commercial or business use. See Michigan Laws 445.852
- state: when applied to the different parts of the United States, shall be construed to extend to and include the District of Columbia and the several territories belonging to the United States; and the words "United States" shall be construed to include the district and territories. See Michigan Laws 8.3o
- Time price differential: means the amount a buyer pays or is required to pay for the privilege of purchasing goods or services in installments over a period of time. See Michigan Laws 445.852
- Time sale price: means the cash sale price of goods or services and the amount, if any, included for official fees, the time price differential, and, if a separate identified charge is made, for insurance. See Michigan Laws 445.852
- Truth in Lending Act: The Truth in Lending Act is a federal law that requires lenders to provide standardized information so that borrowers can compare loan terms. In general, lenders must provide information on Source: OCC
Each retail installment contract shall be in writing, dated, signed by the retail buyer or the authorized representative of the retail buyer and completed as to all essential provisions, except as otherwise provided in section 5 and 6. A seller, agent of the seller, or employee of the seller, acting in the course of his or her employment shall not act as the authorized representative of a retail buyer under this act.
(a) The printed or typed portion of the contract, other than instructions for completion, shall be in a size equal to at least 8-point type. The contract shall be designated “retail installment contract” and shall contain substantially the following notice printed or typed in a size equal to at least 10-point bold type:
“Notice to the buyer: Do not sign this contract before you read it or if it contains blank spaces. You are entitled to a copy of the contract you sign. You are entitled to a partial return of the finance charge if you prepay the balance.”
(b) The retail seller shall deliver to the retail buyer, or mail to him or her at his or her address shown on the retail installment contract, a copy of the contract as accepted by the seller. Until the seller delivers or mails a copy of the contract, the buyer, to any extent that he or she has not received delivery of the goods or been furnished or rendered the services, has the right to rescind his or her contract and to receive a refund of all payments made and return of all goods traded in to the seller on account of or in contemplation of the contract, or if those goods cannot be returned, the value of the goods. Any reliance by a holder other than the seller on written acknowledgment by the buyer of delivery of a copy of the contract shall be based upon a statement in a size equal to at least 10-point bold type and, if contained in the contract, shall appear directly above the buyer’s signature or the signature of the authorized representative of the buyer and shall require a separate signature of the buyer or the authorized representative of the buyer.
(c) The retail installment contract shall contain the names of the seller and the buyer, the place of business of the seller, the residence or other address of the buyer as specified by the buyer, and a description or identification of the goods sold or to be sold, or services furnished or rendered or to be furnished or rendered.
(d) The retail installment contract shall contain the following items:
(1) The cash sale price of the goods or services.
(2) The amount of the buyer’s down payment, identifying the amounts paid in money and allowed for goods traded in.
(3) The difference between subparagraphs (1) and (2).
(4) The itemized amounts of official fees.
(5) The aggregate amount, if any, included for insurance, if a separate identified charge is made therefor, specifying the type or types of insurance and the term or terms of coverage.
(6) If the retail installment transaction involves goods that are a vehicle, the cost of any guaranteed asset protection waiver that the seller agrees to extend credit to the buyer to obtain. For purposes of this subparagraph, all of the following apply:
(i) “Guaranteed asset protection waiver” means that term as defined in section 3 of the guaranteed asset protection waiver act.
(ii) “Vehicle” means goods that are a motor vehicle, as that term is defined in section 3 of the guaranteed asset protection waiver act, that is not subject to the motor vehicle sales finance act, 1950 (Ex Sess) PA 27, MCL 492.101 to 492.141.
(iii) A guaranteed asset protection waiver may be included as part of, or as an addendum to, a retail installment contract.
(iv) A retail seller that offers, sells, or provides guaranteed asset protection waivers to retail buyers in this state must comply with the guaranteed asset protection waiver act.
(v) Any cost to a retail buyer for a guaranteed asset protection waiver entered into in compliance with the truth in lending act, 15 USC 1601 to 1667f, and the regulations promulgated under that act, 12 C.F.R. part 226, must be separately stated and is not considered a finance charge or interest.
(7) The principal balance, which is the total of the amounts described in subparagraphs (3), (4), (5), and (6).
(8) The amount of the time price differential for the full term of the contract.
(9) The amount of the time balance owed by the buyer to the seller, which is the total of the amounts described in subparagraphs (7) and (8).
(10) Except as otherwise provided in this subparagraph, the maximum number of installment payments required and the amount of each installment and the due date of each payment necessary to pay the time balance set forth in subparagraph (9). If installment payments other than the final payment are stated as a series of equal schedule amounts and if the amount of the final installment payment does not substantially exceed the scheduled amount of each preceding installment payment, the maximum number of payments and the amount and due date of each payment need not be separately stated and the amount of the scheduled final installment payment may be stated as the remaining unpaid balance. The due date of the first installment payment may be fixed by a day or date or may be fixed by reference to the date of the contract or to the time of delivery or installation.
(11) The time sale price.
(12) If any installment, except the down payment, is more than double the average of all other installments, except the down payment, the following legend printed in at least 10-point bold type or typewritten: “This contract is not payable in installments of equal amounts”, followed, if there is but 1 larger installment, by: “An installment of $………… will be due on …………” or, if there is more than 1 larger installment, by: “larger installments will be due as follows: …………”, in the latter case inserting the amount of every larger installment and of its due date. The above items need not be stated in the sequence or order set forth; additional items may be included to explain the computations made in determining the amount to be paid by the buyer.
(13) A notice to the buyer that on his or her request the seller must provide or make available for examination by the buyer a statement or table showing how the partial refund of the time price charge is to be computed if any balance of the contract is prepaid.
(14) A statement that the seller retains a security interest in the subject matter of the retail installment contract or retail charge agreement if he or she does so and a statement setting forth the nature and terms of the security interest retained, and the following legend printed in at least 10-point bold type or typewritten: “The seller retains a security interest in the subject matter of this agreement”.