§ 2405. Retail installment contracts

(a) Each retail installment contract shall be in writing, dated, signed by both the buyer and the seller, and completed as to essential provisions before being signed by the buyer. A retail installment contract need not be contained in a single document.

(b) The printed portion of the retail installment contract, other than instructions for completion, shall be in a size equal to at least eight-point type. The contract shall be designated in a size equal to at least 10-point bold type as a “Retail Installment Contract” and shall contain the following notice in a size equal to at least 10-point bold type.

“NOTICE TO THE BUYER—DO NOT SIGN THIS
CONTRACT IN BLANK. YOU ARE ENTITLED TO A
COPY OF THE CONTRACT AT THE TIME YOU
SIGN. KEEP IT TO PROTECT YOUR LEGAL
RIGHTS.”

(c) A retail installment contract may be evidenced by an original document stated to be applicable to purchase of goods or services to be made by the retail buyer from time to time. In that case, the original document, together with the sales slip, account book, or other written statement relating to each purchase, shall set forth all of the information required by this section and shall constitute the retail installment contract for each purchase. On each succeeding purchase under the original document, the sales slip, account book, or other written statement may, at the option of the seller, constitute the memorandum required by subsection (h) of this section. The seller shall deliver to the buyer a copy of the contract as accepted by the seller.

(d) The seller shall deliver to the buyer at the time of the execution of the contract a copy of the contract as accepted by the seller, except that where the sale is less than $ 5.00, the seller may mail a copy of such contract to the buyer at his or her address as shown on the retail installment contract. Any acknowledgement by the buyer of delivery of a copy of the contract shall be in a size equal to at least 10-point bold type and shall appear directly above the buyer’s signature. In any transaction involving the modernization, rehabilitation, repair, alteration, improvement, or construction of real property, the seller shall not request or accept a certificate of completion signed by the buyer before the actual delivery of the goods and completion of the work to be performed under the contract.

(e) Retail installment contracts negotiated and entered into by mail without personal solicitation by salespersons or other representatives of the seller and based upon a catalogue of the seller or other printed solicitation of the business, if the catalogue or other printed solicitation clearly sets forth the cash price and other terms of sales to be made through the medium, may be made as provided in this section. All provisions of this chapter applicable to retail installment contracts shall apply to those sales, except that the retail installment contract when completed by the buyer need not contain the items required in subsection (g) of this section. When the contract is received from the retail buyer, the seller shall forthwith prepare a written memorandum containing all the information required by subsection (g) of this section to be included in a retail installment contract. In lieu of delivering a copy of the contract to the buyer as provided in subsection (d) of this section, the seller shall deliver to the buyer a copy of such memorandum prior to the due date of the first installment under the contract.

(f) 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 of the goods sold or to be sold, which shall be sufficient for identification, and of the services furnished or to be furnished.

(g)(1) The retail installment contract shall contain the following items:

(A) the cash price of the goods or services;

(B) the amount of the buyer’s down payment, if any, specifying the amount paid in money and in goods traded in;

(C) the difference between subdivisions (A) and (B) of this subsection (g);

(D) the amount, if any, included for insurance, if a separate identified charge is made therefor, specifying the coverage and cost of each type of insurance at rates authorized by rate schedules then in effect and on file with the Commissioner of Financial Regulation; the cost, if any, for service contracts as defined in 8 V.S.A. § 4247; and the reasonable cost, if any, for a debt protection agreement as set forth in 8 V.S.A. § 10405;

(E) the amount of all official fees and a separate identified charge shall be shown therefor;

(F) the principal balance, which is the sum of subdivisions (C) and (D) and (E) of this subsection;

(G) the amount of the estimated finance charge as limited by subsection (k) of this section;

(H) the sum of subdivisions (F) and (G) of this subsection (g), which is the balance to be paid by the buyer to the seller; the number of installments thereof, the amount of each installment, and the due date or period thereof; and notice to the borrower as to the effect of early or late payments; and

(I) the total time price, which is the sum of subdivisions (A), (D), (E), and (G) of this subdivision (1).

(2) The items specified in subdivision (1) of this subsection need not be stated in the sequence or order set forth; additional items may be included, but only to explain the calculations involved in determining the balance to be paid by the buyer as set forth. No other charges shall be made by the seller.

(h)(1) Whenever a retail installment contract by its terms permits inclusion of additional goods purchased after the original agreement, and such goods are so purchased and the amount due on the new purchase is combined with an unpaid balance on any prior purchase so as to permit the retail seller to retain title to or reserve a lien upon all goods under the combined agreement, the retail seller shall, at the time of the additional purchase, deliver to the retail buyer and attach to the original agreement:

(A) a statement containing all the information with respect to the additional purchase required to be included in a retail installment contract; and

(B) a statement showing the amount due on the agreement immediately previous to the new purchase, the amount due after the purchase, the payments agreed to be made thereafter, and the number of additional months required to complete the payments.

(2) Whenever a payment is made on such a continuing agreement after additional purchases have been added, the payment shall be considered as allocated among each of the separate purchases included, in the same proportions that the original cash price of each bears to the total cash price of all goods to which the retail seller has retained title, and the retail seller before repossessing or attempting to repossess any goods under any such agreement shall actually allocate in such manner all such payments made to him or her by the retail buyer. When the amount owing on any such purchase has been fully paid, the goods so paid for shall become the absolute property of the retail buyer and shall not be subject to possession for any subsequent default on the agreement. The retail buyer under any such agreement may at any time prepay the amount due on any of the separate purchases and in case of repossession may redeem any of such separate purchases by payment of the amount due on such purchase alone.

(i)(1) The amount, if any, stated and included in the retail installment contract for insurance to be purchased by the holder shall not exceed the applicable premiums chargeable in accordance with filings, if any, with the Department of Financial Regulation. If the insurance for which the stated amount is included insures the life, safety, or health of the buyer, or his or her interest in or his or her liability because of the goods or services and is purchased by the holder, the holder shall, within 30 days after execution of the retail installment contract, send or cause to be sent to the buyer a policy or policies of insurance, written by an insurance company authorized to do business in this State, or a certificate or certificates thereof. The policy or policies shall set forth all the terms, exceptions, limitations, restrictions, and conditions of the contract or contracts of insurance and the certificates shall set forth a summary thereof. The insurance may be purchased by the holder. The buyer shall have the privilege of purchasing the insurance from an agent or broker of his or her own selection and of selecting an insurance company acceptable to the holder, which acceptance shall not be arbitrarily or unreasonably withheld, but in that case the inclusion of the insurance premium in the retail installment contract shall be optional with the seller.

(2) If the insurance is cancelled, or the premium adjusted, any refund of the premium received by the holder shall be credited to the outstanding principal balance of the contract, except to the extent applied towards payment for similar insurance protecting the interest of the buyer and the holder or either of them.

(j) A retail installment contract shall not be signed by any party thereto when it contains blank spaces of items that are pertinent to the transaction and should be completed. However, if delivery of the goods is not made at the time of the execution of the contract, the identifying numbers or marks of the goods or similar information and the due date of the first installment may be inserted in the contract after its execution.

(k) The interest rates for retail installment sales shall be that authorized by subdivision 41a(b)(2) of this title, and the method of interest calculation shall be as specified in subsection 41a(d) of this title.

(l) [Repealed.]

(m) The holder of any retail installment contract may collect a reasonable delinquency charge if provided for in the contract. In addition, where collection is referred for payment to an attorney who is not a salaried employee of the holder of the contract, the contract may provide for the payment of reasonable attorney’s fees and for court costs and disbursements and also for actual and reasonable out-of-pocket expenses incurred after referral in connection with the delinquency, repossession, or foreclosure, including storage charges, reconditioning expenses, and collection expenses.

(n) Upon written request of the buyer, the holder of a retail installment contract shall give or forward to the buyer a written statement of the dates and amounts of installment payments and the total amount unpaid under the contract. The buyer shall be given a written receipt for any payment when made in cash. One statement or receipt shall be given the buyer without charge, and if any additional statement or receipt is requested by the buyer, it shall be supplied by the holder at a charge not in excess of $1.00 for each additional statement or receipt so supplied.

(o) A provision in a retail installment contract relieving the seller from liability for any legal remedies that the buyer may have against the seller shall not be enforceable.

(p)(1) Notwithstanding the provisions of any retail installment contract to the contrary, any buyer may prepay the contract in full at any time before maturity without penalty.

(2) [Repealed.]

(q)(1) The holder of a retail installment contract upon request by the buyer may agree to an amendment thereto to extend the scheduled due date of all or any part of any installment or installments or to renew, restate, or reschedule the unpaid balance of the contract.

(2) The amendment to the contract must be confirmed in a writing signed by the buyer and the holder. The writing shall set forth the terms of the amendment and shall either be delivered to the buyer or mailed to him or her at the address as shown on the contract. That writing together with the original contract and any previous amendments thereto shall constitute the retail installment contract. (Added 1963, No. 221, § 5, eff. Jan. 1, 1964; amended 1967, No. 58, § 2; 1979, No. 173 (Adj. Sess.), §§ 16, 17, eff. April 30, 1980; 1985, No. 59, § 2; 1989, No. 122, §§ 14-21, eff. June 30, 1989; 1989, No. 225 (Adj. Sess.), § 25; 1995, No. 180 (Adj. Sess.), § 38(a); 1997, No. 109 (Adj. Sess.), § 5, eff. Sept. 1, 1998; 2005, No. 70, § 6; 2013, No. 29, § 9, eff. May 13, 2013; 2021, No. 20, §§ 13, 14.)