Michigan Laws 445.864 – Retail installment contracts or charge agreements; prohibited provisions; denial of application based on geographic location of residence prohibited; permissible conduct; exemption; contract for
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(1) Any of the following provisions contained in a retail installment contract or retail charge agreement are void and unenforceable:
(a) In the absence of the buyer‘s default in the performance of any of the buyer’s obligations, the holder may accelerate the maturity of a part or all of the amount owing.
Terms Used In Michigan Laws 445.864
- 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
- Contract: A legal written agreement that becomes binding when signed.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- 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
- Person: means an individual, partnership, joint venture, corporation, limited liability company, association, or other legal entity. See Michigan Laws 445.852
- Power of attorney: A written instrument which authorizes one person to act as another's agent or attorney. The power of attorney may be for a definite, specific act, or it may be general in nature. The terms of the written power of attorney may specify when it will expire. If not, the power of attorney usually expires when the person granting it dies. Source: OCC
- 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
- shall not apply: means that the pertinent provision is not operative as to certain persons or things or in conjunction with a particular date or dates. See Michigan Laws 8.4c
- 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
(b) A power of attorney is given to confess judgment in this state, or an assignment of wages is given.
(c) The seller or holder or other person acting on the seller’s or holder’s behalf is given authority to enter upon the buyer’s premises unlawfully or to commit a breach of the peace in the repossession of goods.
(d) The buyer waives a right of action against the seller or holder or other person acting on the seller’s or holder’s behalf, for an illegal act committed in the collection of payments under the contract or agreement or in the repossession of goods.
(e) The buyer executes a power of attorney appointing the seller or holder, or other person acting on the seller’s or holder’s behalf, as the buyer’s agent in collection of payments under the contract or agreement or in the repossession of goods.
(f) The buyer agrees not to assert against the seller or against an assignee a claim or defense arising out of the sale.
(g) An agreement by the buyer to pay liquidated damages.
(2) A seller shall not deny an application for a retail installment contract or retail charge agreement based in whole or in part upon the geographic location of the residence of the applicant.
(3) Subsection (2) shall not preclude a seller from doing any of the following:
(a) Limiting its retail installment contracts or retail charge agreements to residents of this state or to all counties contiguous to the county in which the business is located, and including that county of location.
(b) Denying an application for a retail installment contract or retail charge agreement, if the store at the location to which the application is made gives equal consideration to all applicants who reside in that store’s trade area, with respect to the geographic location of the residence of each applicant. As used in this subdivision, “trade area” includes the places of residence of all regular customers of the store.
(c) Denying an application for a retail installment contract or retail charge agreement if the seller maintains a consistent credit evaluation system within at least 2 contiguous counties, and that system does not take into consideration the geographic location of the residence of an applicant in determining whether the applicant should be granted or denied a retail installment contract or retail charge agreement, and the seller does not grant a retail installment contract or retail charge agreement in any other county.
(d) Researching payment and repayment rates in selected geographic locations for the purpose of detecting causative factors.
(4) Subsection (2) shall not apply to a seller whose annual gross receipts for sales of goods and services within this state are less than $2,000,000.00.
(5) A retail seller shall not require as a condition of approving the retail installment transaction that the retail buyer contract for 1 or more financial services offered by the retail seller or a particular service provider designated by the retail seller.
(6) Subsection (5) does not preclude a retail seller from offering a combination of 2 or more services under prices or terms that are more favorable to the retail buyer than the prices or terms the services would be offered separately.