1. The Laws of New York
  2. Consolidated Laws
  3. Personal Property
  4. Article 10: Retail Instalment Sales Act


Section 403 Restrictions on retail instalment contracts and obligations

Personal Property (PEP)

1. No contract or obligation shall require or entail the execution of any note or series of notes by the buyer, 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.

  2. No contract or obligation shall contain any provision by which:

  (a) The buyer agrees not to assert against an assignee a claim or defense arising out of the sale, but it may contain such a provision as to an assignee who acquires the contract or obligation on the sale of a boat, where the principal balance at the time of sale exceeds five thousand dollars, and to whom the buyer has not mailed written notice of the facts giving rise to the claim or defense within ten days after such assignee mails to the buyer, at his address shown on the contract or obligation, notice of the assignment, indicating or containing in the notice or in an enclosure with the notice: the name and address of the assignee, the names of the seller and the buyer and a description of the boat which is the subject matter of the contract or obligation (including the make and model), the time balance of the contract, the number and amount of installments in which the time balance is payable and the due date or period thereof, together with the following legend printed or typewritten in a size equal to at least eight point bold type:

  NOTICE:

  1. IF THE WITHIN STATEMENT OF YOUR TRANSACTION WITH THE SELLER IS NOT CORRECT IN EVERY RESPECT, OR

  2. IF THE BOAT DESCRIBED IN OR IN AN ENCLOSURE WITH THIS NOTICE HAS NOT BEEN DELIVERED TO YOU BY THE SELLER OR IS NOT NOW IN YOUR POSSESSION, OR

  3. IF THE SELLER HAS NOT FULLY PERFORMED ALL OF HIS AGREEMENTS WITH YOU: YOU MUST NOTIFY THE ASSIGNEES IN WRITING AT THE ADDRESS INDICATED IN OR IN AN ENCLOSURE WITH THIS NOTICE WITHIN TEN DAYS FROM THE DATE OF THE MAILING OF THIS NOTICE, OTHERWISE, YOU WILL LOSE YOUR RIGHT TO ASSERT AGAINST THE ASSIGNEE ANY RIGHT OF ACTION OR DEFENSE ARISING OUT OF THE SALE WHICH YOU MIGHT OTHERWISE HAVE AGAINST THE SELLER.

  (b) 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 thereunder.

  (c) A power-of-attorney is given to confess judgment in this state, or an assignment of wages is given.

  (d) The seller or holder of the contract or obligation 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 goods.

  (e) The buyer waives any right of action against the seller or holder of the contract or obligation, or other person acting on his behalf, for any illegal act committed in the collection of payments under the contract or obligation or in the repossession of goods.

  (f) The buyer executes a power-of-attorney appointing the seller or holder of the contract or obligation, or other person acting on his behalf, as the buyer's agent in collection of payments under the contract or obligation or in the repossession of goods; provided, however, that this paragraph shall not prohibit the inclusion in a contract or obligation 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.

  (g) The buyer relieves the seller from liability for any legal remedies which the buyer may have against the seller under the contract or obligation or any separate instrument executed in connection therewith.

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

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

  3. No retail instalment contract shall contain any provision by which 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 goods, the buyer makes timely tender of an amount which would be sufficient to redeem the goods in the absence of such provision.

  4. Except as provided in paragraph (a) of subdivision two of this section, 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.