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SECTION 302
Requirements as to retail instalment contracts
Personal Property (PEP) CHAPTER 41, ARTICLE 9
§ 302. Requirements as to retail instalment contracts. 1. A retail
instalment contract shall be in writing, shall contain all the
agreements of the parties and shall be signed by the buyer and the
seller.

2. The printed portion of the contract shall be in at least eight
point type. The contract shall contain printed or written in a size
equal to at least ten-point bold type:

(a) Both at the top of the contract and directly above the space
reserved for the signature of the buyer, the words "RETAIL INSTALMENT
CONTRACT";

(b) A specific statement that liability insurance coverage for bodily
injury and property damage caused to others is not included, if that is
the case; and

(c) One of the following notices: "NOTICE TO THE BUYER: 1. Do not sign
this contract before you read it or if it contains any blank space. 2.
You are entitled to a completely filled in copy of this contract when
you sign it. 3. Under the law, you have the following rights, among
others: (a) To pay off in advance the full amount due and to obtain a
partial refund of the credit service charge; (b) To redeem the property
if repossessed for a default; (c) To require, under certain conditions,
a resale of the property if repossessed. 4. According to law you have
the privilege of purchasing the insurance on the motor vehicle provided
for in this contract from an agent or broker of your own selection," or
"NOTICE TO THE BUYER: 1. Do not sign this agreement before you read it
or if it contains any blank space. 2. You are entitled to a completely
filled in copy of this agreement. 3. Under the law, you have the right
to pay off in advance the full amount due and under certain conditions
to obtain a partial refund of the credit service charge. 4. According to
law you have the privilege of purchasing the insurance on the motor
vehicle provided for in this contract from an agent or broker of your
own selection", or "NOTICE TO THE BUYER: 1. Do not sign this agreement
before you read it or if it contains any blank space. 2. You are
entitled to a completely filled in copy of this agreement. 3. Under the
law, you have the right to pay off in advance the full amount due. If
you do so, you may, depending on the nature of the credit service
charge, either: (a) prepay without penalty, or (b) under certain
circumstances obtain a rebate of the credit service charge. 4. According
to law you have the privilege of purchasing the insurance on the motor
vehicle provided for in this contract from an agent or broker of your
own selection".

3. The seller shall deliver to the buyer, or mail to him at his
address shown on the contract, a copy of the contract signed by the
seller. Until the seller does so, a buyer who has not received delivery
of the motor vehicle shall have an unconditional right to cancel the
contract and to receive immediate refund of all payments made and
redelivery of all goods traded-in to the seller on account of or in
contemplation of the contract. Any acknowledgment by the buyer of
delivery of a copy of the contract shall be printed or written in a size
equal to at least ten point bold type and, if contained in the contract,
shall also appear directly above the legend required above the buyer's
signature by sub-division two (a) of this section.

4. The contract shall contain the names of the seller and the buyer,
the place of business of the seller, the residence or place of business
of the buyer as specified by the buyer and a description of the motor
vehicle including its make, year model, model and identification numbers
or marks.

5. The contract shall contain:

(1) All items required to be disclosed by the act of congress entitled
"Truth in Lending Act" and the regulations thereunder, as such act and
regulations may from time to time be amended;

(2) The amount, if any, included for insurance, specifying and
describing the coverages and the amount included for each type of
coverage; however, if any insurance policy complies with the standard
provisions form for automobile physical damage policy or any other
automobile physical damage policy form which is equally or more
favorable to the insured and which is filed with the superintendent of
financial services, the contract need not contain a description of any
type of coverage under such standard automobile physical damage policy
form or a specification of the amount included in the contract therefor
if it contains a specification of the type or types of coverage and the
total amount included in the contract therefor.

6. The amount, if any, included for insurance, shall not exceed the
premiums chargeable in accordance with rate filings made with the
superintendent of financial services for similar insurance. The seller
or financing agency, if insurance on the motor vehicle is included in a
retail instalment contract, shall within thirty days after execution of
the retail instalment contract send or cause to be sent to the buyer a
policy or policies or certificate of insurance, written by an insurance
company authorized to do business in this state, clearly setting forth
the amount of the premium, the kind or kinds of insurance and the scope
of the coverage and all the terms, exceptions, limitations, restrictions
and conditions of the contract or contracts of insurance. The buyer of a
motor vehicle under a retail instalment contract shall have the
privilege of purchasing such insurance from an agent or broker of his
own selection and of selecting an insurance company acceptable to the
seller; provided, however, that the inclusion of the insurance premium
in the retail instalment contract when the buyer selects the agent,
broker or company, shall be optional with the seller and in such case
the seller or financing agency shall have no obligation to send, or
cause to be sent, to the buyer the policy or certificate of insurance.
Nothing contained in this subdivision however shall be deemed to modify,
limit or in any way contravene the provisions of section two thousand
five hundred two of the insurance law.

If any such policy or certificate of insurance on the motor vehicle is
cancelled, the unearned insurance premium refund received by the holder
of the contract, or, if the amount included therefor in the contract
exceeds the cost to the holder of the contract for such insurance, the
unearned portion of the amount so included, together with the unearned
portion of the credit service charge applicable thereto, shall be
credited to the final maturing instalments of the retail instalment
contract except to the extent applied toward payment for similar
insurance protecting the interests of the buyer and the holder of the
contract or either of them.

The amount, if any, included for group credit life insurance, credit
unemployment insurance, or for insurance other than on the motor vehicle
shall not exceed the premiums chargeable in accordance with rate filings
made with the superintendent of financial services for such insurance by
the insurer. If such group credit life or other insurance is cancelled
the refund for unearned insurance premiums received or receivable by the
holder of the contract, or the excess of the amount included in the
contract for group credit life insurance over the premiums paid or
payable by the holder of the contract therefor, together with, in either
case, the unearned portion of the credit service charge applicable
thereto, shall be credited to the final maturing instalments of the
retail instalment contract, provided that no such credit need be made if
the amount thereof would be less than one dollar.

6-a. If the buyer is obligated under the terms of a retail instalment
contract to maintain insurance on the motor vehicle that is the subject
of the contract and if subsequent to the execution of the contract the
buyer fails to maintain the insurance, the holder may make advances to
procure the equivalent limits of insurance for either the interests of
the buyer and the holder or of either of them, and any amount so
advanced may be the subject of a credit service charge from the date of
such advance as though such amount was part of the amount computed as
provided in the closing paragraph of subdivision one of section three
hundred three of this article. Each amount so advanced shall be secured
by the motor vehicle if so provided in the contract and if the holder
notifies the buyer in writing of the advance of such amount and of his
or her option to repay such amount in any one of the following ways:

(a) Full payment within ten days from the date of giving or mailing
the notice;

(b) Full amortization during the term of the insurance or the
remaining term of the contract, at the option of the holder;

(c) If offered by the holder, as a final balloon payment payable one
month after the last scheduled payment under the contract;

(d) If offered by the holder, full amortization after the term of the
contract, to be payable in instalments which do not exceed the average
instalment payable under the contract; or

(e) If offered by the holder, any other amortization plan.

If the buyer neither pays in full the amount so advanced nor notifies
the holder in writing of his or her choice regarding amortization
options before the expiration of ten days from the date of giving or
mailing of the notice by the holder, the holder shall amortize the
amount so advanced pursuant to paragraph (b) of this subdivision.

7. The holder of a retail instalment contract may, if the contract so
provides, collect a delinquency and collection charge on each instalment
in default for a period not less than ten days in an amount not in
excess of the rate or rates agreed to in the contract. In addition to
such delinquency and collection charge, the retail instalment contract
may provide for the payment of attorneys' fees not exceeding fifteen
percent of the amount due and payable under such contract where such
contract is referred to an attorney not a salaried employee of the
holder of the contract for collection, plus the court costs.

8. No retail instalment contract shall be signed by any party thereto
when it contains blank spaces to be filled in after it has been signed
except that, if delivery of the motor vehicle is not made at the time of
the execution of the contract, the identifying numbers or marks of the
motor vehicle or similar information and the due date of the first
instalment may be inserted in the contract after its execution. The
buyer's written acknowledgment, conforming to the requirements of
subdivision three of this section, of delivery of a copy of a contract
shall be conclusive proof of such delivery and of compliance with this
subdivision in any action or proceeding by or against an assignee of the
contract without knowledge to the contrary when he purchases the
contract.

9. (a) No retail instalment contract shall contain any provision by
which the buyer agrees not to assert against an assignee a claim or
defense arising out of the sale or require or entail the execution of
any note or series of notes, which when separately negotiated will cut
off as to third parties any right of action or defense which the buyer
may have against the seller. The assignee of a retail installment
contract or obligation shall be subject to all claims and defenses of
the buyer against the seller arising from the sale notwithstanding any
agreement to the contrary, but the assignee's liability under this
subdivision shall not exceed the amount owing to the assignee at the
time the claim or defense is asserted against the assignee.

(b) Limitations on assignee liability referred to in paragraph (a) of
this subdivision shall be exclusive of any reasonable costs and
attorney's fees the court may award.

10. Notwithstanding any contrary provision of the personal property
law, lien law, banking law or other law: (a) a financing agency may
purchase a retail instalment contract from a seller on such terms and
conditions and for such price as may be mutually agreed upon; and (b) no
filing of the assignment, no notice to the buyer of the assignment, and
no requirement that the seller be deprived of dominion over payments
upon the contract or over the vehicle if repossessed by or returned to
the seller, shall be necessary to the validity of a written assignment
of a retail instalment contract as against creditors, subsequent
purchasers, pledgees, mortgagees or encumbrancers of the seller.

11. Unless the buyer has notice of actual or intended assignment of a
retail instalment contract, payment thereunder made by the buyer to the
last known holder of such contract shall be binding upon all subsequent
holders or assignees.

12. Upon written request from the buyer, the holder of a retail
instalment contract shall give or forward to the buyer a written
statement of the dates and amounts of payments and the total amount
unpaid under such contract. A buyer shall be given a written receipt for
any payment when made in cash.

13. No retail instalment contract shall contain any provision by
which:

(a) in the absence of the buyer's default, the holder may, arbitrarily
and without reasonable cause, accelerate the maturity of any part or all
of the amount owing thereon;

(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 of the contract or other person acting on his
behalf is given authority to enter upon the buyer's premises unlawfully,
or to commit any breach of the peace in the repossession of the motor
vehicle;

(d) the buyer waives any right of action against the seller or holder
of the contract, or other person acting on his behalf, for any illegal
act committed in the collection of payments under the contract or in the
repossession of the motor vehicle;

(e) the buyer executes a power of attorney appointing the seller or
holder of the contract, or other person acting on his behalf, as the
buyer's agent in collection of payments under the contract or in the
repossession of the motor vehicle; provided, however, that this
paragraph shall not prohibit the inclusion in a retail instalment
contract of a limited power of attorney or other provision authorizing
the holder to execute in the name of the buyer any proofs of insurance
claims or losses or to endorse the name of the buyer on any insurance
settlement draft or check;

(f) the seller is relieved from liability for any legal remedy which
the buyer may have had against the seller under the contract, or any
separate instrument executed in connection therewith;

(g) the maturity of any part or all of the amount owing thereon is
accelerated where, following a default consisting solely of the failure
to make timely instalment payments and the subsequent repossession of
the motor vehicle, the buyer makes timely tender of an amount which
would be sufficient to redeem the vehicle in the absence of such
provision;

(h) the buyer waives any right to a trial by jury in any action or
proceeding arising out of the contract.

14. Any such prohibited provision shall be void but shall not
otherwise affect the validity of the contract.