N.Y. PEP Law § 402 — New York Code / Act PEP / Article 10 / Section 402
Provisions of retail instalment contracts and obligations
Status: in_force

§ 402. Provisions of retail instalment contracts and obligations. 1. A\nretail instalment contract or obligation shall be dated and in writing;\nthe printed portion thereof shall be in at least eight point type.\n  2. A contract or obligation shall contain the entire agreement of the\nparties with respect to the goods and services, including any promise,\nwhether made in writing or orally, by the seller, made as an inducement\nto the buyer to become a party to the contract or which is part of the\ncontract or which is made incidental to negotiations between the seller\nand the buyer with respect to the sale of the goods or services that are\nthe subject of the contract, that the seller will compensate the buyer\nfor referring customers or prospective customers to the seller for goods\nor services which the seller has for sale or for referring the seller to\nsuch customers or prospective customers. In any case in which, pursuant\nto the preceding provisions, the contract contains a promise to\ncompensate the buyer for referring customers or prospective customers to\nthe seller or the seller to such customers, the contract must contain a\nprovision to the effect that the amount otherwise owing under the\ncontract at any time is reduced by the amount of compensation owing\npursuant to such promise, and:\n  (a) Both at the top of the contract or obligation and directly above\nthe space reserved for the signature of the buyer, the words RETAIL\nINSTALMENT CONTRACT or RETAIL INSTALMENT OBLIGATION, as the case may be,\nin at least ten point bold type; and\n  (b) Either a notice in at least eight point bold type reading as\nfollows: NOTICE TO THE BUYER: 1. Do not sign this agreement before you\nread it or if it contains any blank space. 2. You are entitled to a\ncompletely filled in copy of this agreement. 3. Under the law, you have\nthe right to pay off in advance the full amount due and under certain\nconditions to obtain a partial refund of the credit service charge or a\nnotice in at least eight point bold type reading as follows: NOTICE TO\nTHE BUYER: 1. Do not sign this agreement before you read it or if it\ncontains any blank space. 2. You are entitled to a completely filled in\ncopy of this agreement. 3. Under the law, you have the right to pay off\nin advance the full amount due. If you do so, you may, depending on the\nnature of the credit service charge, either: (a) prepay without penalty,\nor (b) under certain circumstances obtain a rebate of the credit service\ncharge.\n  3. A contract or obligation shall:\n  (a) Contain the names of the seller and the buyer, the place of\nbusiness of the seller, the residence or place of business of the buyer\nas specified by the buyer and an adequate description of the services\nand goods (including the make and model, if any, in the case of goods\ncustomarily sold by make and model); and\n  (b) Set forth the following items:\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) If any instalment substantially exceeds in amount any prior\ninstalment other than the down-payment, contain the following legend\nprinted in ten point bold type or typewritten: THIS CONTRACT IS NOT\nPAYABLE IN INSTALMENTS OF EQUAL AMOUNTS: followed, if there be but one\nlarger instalment, by: AN INSTALMENT OF $..........WILL BE DUE ON\n..........or, if there be more than one larger instalment, by: LARGER\nINSTALMENTS WILL BE DUE AS FOLLOWS.........(insert the amount or amounts\nof every larger instalment and its due date.) In the case of a retail\ninstalment obligation, OBLIGATION shall be substituted for CONTRACT in\nthe required legend. If the credit service charge with respect to the\ncontract or obligation is calculated pursuant to subdivision four of\nsection four hundred four of this article, the disclosure provided for\nin this subparagraph may be omitted.\n  4. No contract or obligation shall be signed by the buyer when it\ncontains blank spaces to be filled in after it has been signed; however,\nif delivery of the goods is not made at the time of the execution of the\ncontract or obligation and it so provides, the identifying numbers or\nmarks of the goods and the due date of the first instalment may be left\nblank and later inserted by the seller in the seller's counterpart of\nthe contract or obligation after it has been signed by the buyer.\n  5. If the cost of any credit unemployment, group credit life or other\ninsurance is included in the contract or obligation and a separate\ncharge is made to the buyer for such insurance:\n  (a) The contract or obligation shall state whether the insurance is to\nbe procured by the buyer or the seller;\n  (b) The amount, if any, so included for such insurance, shall not\nexceed the premiums chargeable in accordance with rate filings made with\nthe superintendent of financial services for such insurance by the\ninsurer; and, 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; and\n  (c) If the insurance is to be procured by the seller or holder, he\nshall, within thirty days after delivery of the goods or furnishing of\nthe services under the contract or obligation, deliver, mail or cause to\nbe mailed to the buyer, at his address as specified in the contract or\nobligation, a notice thereof or a copy of the policy or policies of\ninsurance or a certificate or certificates of the insurance so procured.\n  6. A contract or obligation may provide for the payment by the buyer\nof a delinquency and collection charge on each instalment in default for\na period of not less than ten days in an amount not in excess of the\nrate provided for in the contract or obligation on such instalment\nprovided that only one such delinquency and collection charge may be\ncollected on any such instalment regardless of the period during which\nit remains in default.\n  6-a. A provision in a contract or obligation which provides for the\npayment of attorney's fees or the costs of attorney's services incurred\nin a legal action or proceeding for collection shall be null and void.\n  6-b. A provision in a contract or obligation which provides for waiver\nof the right to impose any counterclaim or offset arising out of a\nbreach of that contract or obligation by the seller shall be void and\nunenforceable.\n  7. All of the terms of an obligation need not be contained in a single\ndocument but if they are not then there shall be an original document\nexecuted by the parties containing provisions making it applicable to\npurchases of goods or services, which may not exceed a cash sale price\nof one hundred seventy-five dollars on each purchase, to be made by the\nbuyer from time to time from a retail seller, which document, together\nwith other written statements relating to the sale of such goods or\nservices shall constitute a retail instalment obligation and shall\ncontain the entire agreement of the parties. In such cases, the original\ndocument shall contain those items required to be disclosed by the act\nof congress entitled "Truth in Lending Act" and the regulations\nthereunder, as such act and regulations may from time to time be amended\nand shall further contain:\n  (i) a legend as provided in paragraph (a) of subdivision two hereof,\n  (ii) a notice to the buyer as provided in paragraph (b) of subdivision\ntwo hereof,\n  (iii) the names of the seller and the buyer,\n  (iv) the place of business of the seller and the residence or place of\nbusiness of the buyer as specified by the buyer,\n  (v) the number of instalment payments, and\n  (vi) the amount or rate of the credit service charge applicable to\npurchases thereunder.\n  At the time of each purchase under such document, the seller shall\ngive the buyer statements which shall contain at the top thereof a\nlegend in at least eight-point bold type: PART OF A RETAIL INSTALMENT\nOBLIGATION and an adequate description of the goods, accessories and\nservices sold or furnished (including the make and model, if any, in the\ncase of goods customarily sold by make and model) and shall further\ncontain those items required to be disclosed by the act of congress\nentitled "Truth in Lending Act" and the regulations thereunder, as such\nact and regulations may from time to time be amended. If the seller does\nnot deliver to the buyer at the time of each purchase under such\noriginal document a statement in compliance with the act of congress\nentitled "Truth in Lending Act" and the regulations thereunder, as such\nact and regulations may from time to time be amended, the seller shall\npromptly thereafter, and in any event within ten days from the date of\nsuch purchase, deliver, mail or cause to be mailed to the buyer at his\naddress shown on the seller's records, such statement. Unless the seller\ndoes so, the buyer shall have an unconditional right to cancel such\npurchase and to receive an immediate refund of any payments made and\nre-delivery of all goods traded in to the seller on account of or in\ncontemplation of such purchase; upon the written request of the buyer\nthe seller shall prove the accuracy of the calculations in such\nstatement.\n  Such statement with respect to the first such purchase shall, combined\nwith the original document, constitute the obligation for such purchase;\nand, on each succeeding purchase pursuant to such original document, the\nobligation therefor as represented by such original document and such\nstatement shall constitute a subsequent obligation under section four\nhundred ten.\n