N.Y. PEP Law § 403 — New York Code / Act PEP / Article 10 / Section 403
Restrictions on retail instalment contracts and obligations
Status: in_force

§ 403. Restrictions on retail instalment contracts and obligations.\n1. No contract or obligation shall require or entail the execution of\nany note or series of notes by the buyer, which when separately\nnegotiated, will cut off as to third parties any right of action or\ndefense which the buyer may have against the seller.\n  2. No contract or obligation shall contain any provision by which:\n  (a) The buyer agrees not to assert against an assignee a claim or\ndefense arising out of the sale, but it may contain such a provision as\nto an assignee who acquires the contract or obligation on the sale of a\nboat, where the principal balance at the time of sale exceeds five\nthousand dollars, and to whom the buyer has not mailed written notice of\nthe facts giving rise to the claim or defense within ten days after such\nassignee mails to the buyer, at his address shown on the contract or\nobligation, notice of the assignment, indicating or containing in the\nnotice or in an enclosure with the notice: the name and address of the\nassignee, the names of the seller and the buyer and a description of the\nboat which is the subject matter of the contract or obligation\n(including the make and model), the time balance of the contract, the\nnumber and amount of installments in which the time balance is payable\nand the due date or period thereof, together with the following legend\nprinted or typewritten in a size equal to at least eight point bold\ntype:\n  NOTICE:\n  1. IF THE WITHIN STATEMENT OF YOUR TRANSACTION WITH THE SELLER IS NOT\nCORRECT IN EVERY RESPECT, OR\n  2. IF THE BOAT DESCRIBED IN OR IN AN ENCLOSURE WITH THIS NOTICE HAS\nNOT BEEN DELIVERED TO YOU BY THE SELLER OR IS NOT NOW IN YOUR\nPOSSESSION, OR\n  3. IF THE SELLER HAS NOT FULLY PERFORMED ALL OF HIS AGREEMENTS WITH\nYOU:  YOU MUST NOTIFY THE ASSIGNEES IN WRITING AT THE ADDRESS INDICATED\nIN OR IN AN ENCLOSURE WITH THIS NOTICE WITHIN TEN DAYS FROM THE DATE OF\nTHE MAILING OF THIS NOTICE, OTHERWISE, YOU WILL LOSE YOUR RIGHT TO\nASSERT AGAINST THE ASSIGNEE ANY RIGHT OF ACTION OR DEFENSE ARISING OUT\nOF THE SALE WHICH YOU MIGHT OTHERWISE HAVE AGAINST THE SELLER.\n  (b) 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 thereunder.\n  (c) A power-of-attorney is given to confess judgment in this state, or\nan assignment of wages is given.\n  (d) The seller or holder of the contract or obligation or other person\nacting on his behalf is given authority to enter upon the buyer's\npremises unlawfully or to commit any breach of the peace in the\nrepossession of goods.\n  (e) The buyer waives any right of action against the seller or holder\nof the contract or obligation, or other person acting on his behalf, for\nany illegal act committed in the collection of payments under the\ncontract or obligation or in the repossession of goods.\n  (f) The buyer executes a power-of-attorney appointing the seller or\nholder of the contract or obligation, or other person acting on his\nbehalf, as the buyer's agent in collection of payments under the\ncontract or obligation or in the repossession of goods; provided,\nhowever, that this paragraph shall not prohibit the inclusion in a\ncontract or obligation of a limited power of attorney or other provision\nauthorizing the holder to execute in the name of the buyer any proofs of\ninsurance claims or losses or to endorse the name of the buyer on any\ninsurance settlement draft or check.\n  (g) The buyer relieves the seller from liability for any legal\nremedies which the buyer may have against the seller under the contract\nor obligation or any separate instrument executed in connection\ntherewith.\n  (h) The buyer waives any right to a trial by jury in any action or\nproceeding arising out of the contract or obligation.\n  Any such prohibited provision shall be void but shall not otherwise\naffect the validity of the contract or obligation.\n  3. No retail instalment contract shall contain any provision by which\nthe 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 goods, the buyer makes timely tender of an amount which would be\nsufficient to redeem the goods in the absence of such provision.\n  4. Except as provided in paragraph (a) of subdivision two of this\nsection, the assignee of a retail installment contract or obligation\nshall be subject to all claims and defenses of the buyer against the\nseller arising from the sale notwithstanding any agreement to the\ncontrary, but the assignee's liability under this subdivision shall not\nexceed the amount owing to the assignee at the time the claim or defense\nis asserted against the assignee.\n