§ 302 — Requirements as to retail instalment contracts

§ 302. Requirements as to retail instalment contracts. 1. A retail\ninstalment contract shall be in writing, shall contain all the\nagreements of the parties and shall be signed by the buyer and the\nseller.\n 2. The printed portion of the contract shall be in at least eight\npoint type. The contract shall contain printed or written in a size\nequal to at least ten-point bold type:\n (a) Both at the top of the contract and directly above the space\nreserved for the signature of the buyer, the words "RETAIL INSTALMENT\nCONTRACT";\n (b) A specific statement that liability insurance coverage for bodily\ninjury and property damage caused to others is not included, if that is\nthe case; and\n (c) One of the following notices: "NOTICE TO THE BUYER: 1. Do not sign\nthis contract before you read it or if it contains any blank space. 2.\nYou are entitled to a completely filled in copy of this contract when\nyou sign it. 3. Under the law, you have the following rights, among\nothers: (a) To pay off in advance the full amount due and to obtain a\npartial refund of the credit service charge; (b) To redeem the property\nif repossessed for a default; (c) To require, under certain conditions,\na resale of the property if repossessed. 4. According to law you have\nthe privilege of purchasing the insurance on the motor vehicle provided\nfor in this contract from an agent or broker of your own selection," or\n"NOTICE TO THE BUYER: 1. Do not sign this agreement before you read it\nor if it contains any blank space. 2. You are entitled to a completely\nfilled in copy of this agreement. 3. Under the law, you have the right\nto pay off in advance the full amount due and under certain conditions\nto obtain a partial refund of the credit service charge. 4. According to\nlaw you have the privilege of purchasing the insurance on the motor\nvehicle provided for in this contract from an agent or broker of your\nown selection", or "NOTICE TO THE BUYER: 1. Do not sign this agreement\nbefore you read it or if it contains any blank space. 2. You are\nentitled to a completely filled in copy of this agreement. 3. Under the\nlaw, you have the right to pay off in advance the full amount due. If\nyou do so, you may, depending on the nature of the credit service\ncharge, either: (a) prepay without penalty, or (b) under certain\ncircumstances obtain a rebate of the credit service charge. 4. According\nto law you have the privilege of purchasing the insurance on the motor\nvehicle provided for in this contract from an agent or broker of your\nown selection".\n 3. The seller shall deliver to the buyer, or mail to him at his\naddress shown on the contract, a copy of the contract signed by the\nseller. Until the seller does so, a buyer who has not received delivery\nof the motor vehicle shall have an unconditional right to cancel the\ncontract and to receive immediate refund of all payments made and\nredelivery of all goods traded-in to the seller on account of or in\ncontemplation of the contract. Any acknowledgment by the buyer of\ndelivery of a copy of the contract shall be printed or written in a size\nequal to at least ten point bold type and, if contained in the contract,\nshall also appear directly above the legend required above the buyer's\nsignature by sub-division two (a) of this section.\n 4. The contract shall contain the names of the seller and the buyer,\nthe place of business of the seller, the residence or place of business\nof the buyer as specified by the buyer and a description of the motor\nvehicle including its make, year model, model and identification numbers\nor marks.\n 5. The contract shall contain:\n (1) All items required to be disclosed by the act of congress entitled\n"Truth in Lending Act" and the regulations thereunder, as such act and\nregulations may from time to time be amended;\n (2) The amount, if any, included for insurance, specifying and\ndescribing the coverages and the amount included for each type of\ncoverage; however, if any insurance policy complies with the standard\nprovisions form for automobile physical damage policy or any other\nautomobile physical damage policy form which is equally or more\nfavorable to the insured and which is filed with the superintendent of\nfinancial services, the contract need not contain a description of any\ntype of coverage under such standard automobile physical damage policy\nform or a specification of the amount included in the contract therefor\nif it contains a specification of the type or types of coverage and the\ntotal amount included in the contract therefor.\n 6. The amount, if any, included for insurance, shall not exceed the\npremiums chargeable in accordance with rate filings made with the\nsuperintendent of financial services for similar insurance. The seller\nor financing agency, if insurance on the motor vehicle is included in a\nretail instalment contract, shall within thirty days after execution of\nthe retail instalment contract send or cause to be sent to the buyer a\npolicy or policies or certificate of insurance, written by an insurance\ncompany authorized to do business in this state, clearly setting forth\nthe amount of the premium, the kind or kinds of insurance and the scope\nof the coverage and all the terms, exceptions, limitations, restrictions\nand conditions of the contract or contracts of insurance. The buyer of a\nmotor vehicle under a retail instalment contract shall have the\nprivilege of purchasing such insurance from an agent or broker of his\nown selection and of selecting an insurance company acceptable to the\nseller; provided, however, that the inclusion of the insurance premium\nin the retail instalment contract when the buyer selects the agent,\nbroker or company, shall be optional with the seller and in such case\nthe seller or financing agency shall have no obligation to send, or\ncause to be sent, to the buyer the policy or certificate of insurance.\nNothing contained in this subdivision however shall be deemed to modify,\nlimit or in any way contravene the provisions of section two thousand\nfive hundred two of the insurance law.\n If any such policy or certificate of insurance on the motor vehicle is\ncancelled, the unearned insurance premium refund received by the holder\nof the contract, or, if the amount included therefor in the contract\nexceeds the cost to the holder of the contract for such insurance, the\nunearned portion of the amount so included, together with the unearned\nportion of the credit service charge applicable thereto, shall be\ncredited to the final maturing instalments of the retail instalment\ncontract except to the extent applied toward payment for similar\ninsurance protecting the interests of the buyer and the holder of the\ncontract or either of them.\n The amount, if any, included for group credit life insurance, credit\nunemployment insurance, or for insurance other than on the motor vehicle\nshall not exceed the premiums chargeable in accordance with rate filings\nmade with the superintendent of financial services for such insurance by\nthe insurer. If such group credit life or other insurance is cancelled\nthe refund for unearned insurance premiums received or receivable by the\nholder of the contract, or the excess of the amount included in the\ncontract for group credit life insurance over the premiums paid or\npayable by the holder of the contract therefor, together with, in either\ncase, the unearned portion of the credit service charge applicable\nthereto, shall be credited to the final maturing instalments of the\nretail instalment contract, provided that no such credit need be made if\nthe amount thereof would be less than one dollar.\n 6-a. If the buyer is obligated under the terms of a retail instalment\ncontract to maintain insurance on the motor vehicle that is the subject\nof the contract and if subsequent to the execution of the contract the\nbuyer fails to maintain the insurance, the holder may make advances to\nprocure the equivalent limits of insurance for either the interests of\nthe buyer and the holder or of either of them, and any amount so\nadvanced may be the subject of a credit service charge from the date of\nsuch advance as though such amount was part of the amount computed as\nprovided in the closing paragraph of subdivision one of section three\nhundred three of this article. Each amount so advanced shall be secured\nby the motor vehicle if so provided in the contract and if the holder\nnotifies the buyer in writing of the advance of such amount and of his\nor her option to repay such amount in any one of the following ways:\n (a) Full payment within ten days from the date of giving or mailing\nthe notice;\n (b) Full amortization during the term of the insurance or the\nremaining term of the contract, at the option of the holder;\n (c) If offered by the holder, as a final balloon payment payable one\nmonth after the last scheduled payment under the contract;\n (d) If offered by the holder, full amortization after the term of the\ncontract, to be payable in instalments which do not exceed the average\ninstalment payable under the contract; or\n (e) If offered by the holder, any other amortization plan.\n If the buyer neither pays in full the amount so advanced nor notifies\nthe holder in writing of his or her choice regarding amortization\noptions before the expiration of ten days from the date of giving or\nmailing of the notice by the holder, the holder shall amortize the\namount so advanced pursuant to paragraph (b) of this subdivision.\n 7. The holder of a retail instalment contract may, if the contract so\nprovides, collect a delinquency and collection charge on each instalment\nin default for a period not less than ten days in an amount not in\nexcess of the rate or rates agreed to in the contract. In addition to\nsuch delinquency and collection charge, the retail instalment contract\nmay provide for the payment of attorneys' fees not exceeding fifteen\npercent of the amount due and payable under such contract where such\ncontract is referred to an attorney not a salaried employee of the\nholder of the contract for collection, plus the court costs.\n 8. No retail instalment contract shall be signed by any party thereto\nwhen it contains blank spaces to be filled in after it has been signed\nexcept that, if delivery of the motor vehicle is not made at the time of\nthe execution of the contract, the identifying numbers or marks of the\nmotor vehicle or similar information and the due date of the first\ninstalment may be inserted in the contract after its execution. The\nbuyer's written acknowledgment, conforming to the requirements of\nsubdivision three of this section, of delivery of a copy of a contract\nshall be conclusive proof of such delivery and of compliance with this\nsubdivision in any action or proceeding by or against an assignee of the\ncontract without knowledge to the contrary when he purchases the\ncontract.\n 9. (a) No retail instalment contract shall contain any provision by\nwhich the buyer agrees not to assert against an assignee a claim or\ndefense arising out of the sale or require or entail the execution of\nany note or series of notes, which when separately negotiated will cut\noff as to third parties any right of action or defense which the buyer\nmay have against the seller. The assignee of a retail installment\ncontract or obligation shall be subject to all claims and defenses of\nthe buyer against the seller arising from the sale notwithstanding any\nagreement to the contrary, but the assignee's liability under this\nsubdivision shall not exceed the amount owing to the assignee at the\ntime the claim or defense is asserted against the assignee.\n (b) Limitations on assignee liability referred to in paragraph (a) of\nthis subdivision shall be exclusive of any reasonable costs and\nattorney's fees the court may award.\n 10. Notwithstanding any contrary provision of the personal property\nlaw, lien law, banking law or other law: (a) a financing agency may\npurchase a retail instalment contract from a seller on such terms and\nconditions and for such price as may be mutually agreed upon; and (b) no\nfiling of the assignment, no notice to the buyer of the assignment, and\nno requirement that the seller be deprived of dominion over payments\nupon the contract or over the vehicle if repossessed by or returned to\nthe seller, shall be necessary to the validity of a written assignment\nof a retail instalment contract as against creditors, subsequent\npurchasers, pledgees, mortgagees or encumbrancers of the seller.\n 11. Unless the buyer has notice of actual or intended assignment of a\nretail instalment contract, payment thereunder made by the buyer to the\nlast known holder of such contract shall be binding upon all subsequent\nholders or assignees.\n 12. Upon written request from the buyer, the holder of a retail\ninstalment contract shall give or forward to the buyer a written\nstatement of the dates and amounts of payments and the total amount\nunpaid under such contract. A buyer shall be given a written receipt for\nany payment when made in cash.\n 13. No retail instalment contract shall contain any provision by\nwhich:\n (a) in the absence of the buyer's default, the holder may, arbitrarily\nand without reasonable cause, accelerate the maturity of any part or all\nof the amount owing thereon;\n (b) a power of attorney is given to confess judgment in this state, or\nan assignment of wages is given;\n (c) the seller or holder of the contract or other person acting on his\nbehalf is given authority to enter upon the buyer's premises unlawfully,\nor to commit any breach of the peace in the repossession of the motor\nvehicle;\n (d) the buyer waives any right of action against the seller or holder\nof the contract, or other person acting on his behalf, for any illegal\nact committed in the collection of payments under the contract or in the\nrepossession of the motor vehicle;\n (e) the buyer executes a power of attorney appointing the seller or\nholder of the contract, or other person acting on his behalf, as the\nbuyer's agent in collection of payments under the contract or in the\nrepossession of the motor vehicle; provided, however, that this\nparagraph shall not prohibit the inclusion in a retail instalment\ncontract of a limited power of attorney or other provision authorizing\nthe holder to execute in the name of the buyer any proofs of insurance\nclaims or losses or to endorse the name of the buyer on any insurance\nsettlement draft or check;\n (f) the seller is relieved from liability for any legal remedy which\nthe buyer may have had against the seller under the contract, or any\nseparate instrument executed in connection therewith;\n (g) the maturity of any part or all of the amount owing thereon is\naccelerated where, following a default consisting solely of the failure\nto make timely instalment payments and the subsequent repossession of\nthe motor vehicle, the buyer makes timely tender of an amount which\nwould be sufficient to redeem the vehicle in the absence of such\nprovision;\n (h) the buyer waives any right to a trial by jury in any action or\nproceeding arising out of the contract.\n 14. Any such prohibited provision shall be void but shall not\notherwise affect the validity of the contract.\n