Chapter 1317 | Retail Installment Sales

Section 1317.01 | Retail installment sale definitions.

• Effective: April 14, 2006
• Latest Legislation: House Bill 81 - 126th General Assembly

As used in this chapter:

(A) "Retail installment sale" includes every retail installment contract to sell specific goods, every consumer transaction in which the cash price may be paid in installments over a period of time, and every retail sale of specific goods to any person in which the cash price may be paid in installments over a period of time. "Retail installment sale" does not include a lease-purchase agreement as defined in division (F) of section 1351.01 of the Revised Code nor a layaway arrangement as defined in division (S) of this section.

(B) "Person" includes an individual, corporation, trust, partnership of two or more persons having a joint or common interest, and any other association.

(C)(1) "Goods" means all things, including specially manufactured goods but not including the money in which the price is to be paid or things in action, that satisfy both of the following:

(a) They are movable at the time of identification for sale or identification to the contract for sale;

(b) They are purchased primarily for personal, family, or household purposes.

(2) Nothing in division (C)(1) of this section shall be construed to exempt transactions involving items purchased for other than primarily personal, family, or household purposes from sections 2905.21 to 2905.24 of the Revised Code.

(D) "Specific goods" means goods, including related services, identified and agreed upon at the time a contract to sell or a sale is made.

(E) "Retail" means to dispose of specific goods to, or to acquire specific goods by, a person for use other than for purposes of resale.

(F) "Buyer" means a person that buys or agrees to buy goods or any legal successor in interest of such person.

(G) "Retail buyer" means a buyer that is a party to a retail installment sale, or any legal successor in interest of such person.

(H) "Seller" means a person who sells or agrees to sell goods.

(I) "Retail seller" means a seller that is a party to a retail installment sale.

(J) "Holder of the retail installment contract" means any person to which the money owed by the retail buyer on the retail installment contract has been paid.

(K) "Cash price" means the price measured in dollars, agreed upon in good faith by the parties as the price at which the specific goods which are the subject matter of any retail installment sale would be sold if such sale were a sale for cash to be paid upon delivery instead of a retail installment sale. "Cash price" may include sales taxes.

(L) "Retail installment contract" means any written instrument that is executed in connection with any retail installment sale and is required by section 1317.02 of the Revised Code or is authorized by section 1317.03 of the Revised Code, and includes all such instruments executed in connection with any retail installment sale.

(M) "Contract for sale" and "sale" have the same meanings as in section 1302.01 of the Revised Code; and "security agreement" has the same meaning as in section 1309.102 of the Revised Code.

(N) "Finance charge" means the amount that the retail buyer pays or contracts to pay the retail seller for the privilege of paying the principal balance in installments over a period of time. Any advancement in the cash price ordinarily charged by the retail seller is a finance charge when a retail installment sale is made.

(O) "Service charge" means the amount that the retail buyer pays or contracts to pay the retail seller for the privilege of paying the principal balance in installments over a period of time in addition to the finance charge for the same privilege.

(P) "Consumer transaction" means a sale, lease, assignment, or other transfer of an item of goods, or a service, except those transactions between persons, defined in sections 4905.03 and 5725.01 of the Revised Code, and their customers, or between attorneys or physicians and their clients or patients, to an individual for purposes that are primarily personal, family, or household. For the purposes of this chapter only, a "consumer transaction" does not include a lease-purchase agreement.

(Q) "Purchase money loan" means a cash advance that is received by a consumer from a creditor in return for a finance charge within the meaning of the "Truth in Lending Act," 82 Stat. 146 (1968), 15 U.S.C.A. 1601 and regulation Z thereunder, which is applied in whole or substantial part to a consumer transaction with a seller, that either:

(1) Cooperates with the creditor to channel consumers to the creditor on a continuing basis;

(2) Is affiliated with the creditor by common control, contract, or business arrangement.

If a credit card issued by a bank, savings and loan association, savings bank, or credit union is used by a consumer in a particular consumer transaction, the bank, savings and loan association, savings bank, or credit union is not a creditor, within the meaning of this division, with respect to the particular consumer transaction.

(R) "Dealer" and "motor vehicle" have the same meanings as in section 4501.01 of the Revised Code.

(S)(1) "Layaway arrangement" means a contract for sale at retail, other than one involving the sale of a motor vehicle by a dealer, in which the buyer agrees to buy and the seller agrees to sell specific goods at a future time and both of the following apply:

(a) Until such future time, the seller agrees to retain possession of but remove the specific goods from its retail inventory and not offer the specific goods for sale to other persons or promises the availability thereof at the agreed time of delivery;

(b) The buyer agrees to pay the seller the layaway price, in whole or in part, by deposit, down payment, part payment, periodically or in installments or otherwise prior to delivery of the specific goods.

(2) A layaway arrangement does not include interest or equivalent financing charges. If a contract of sale is a layaway arrangement, it is not a retail installment sale, and it is not a contract subject to Chapter 1309. or sections 1351.02 to 1351.09 or 1317.02 to 1317.16 of the Revised Code.

(T) "Layaway price" means the price at which the specific goods that are the subject of a layaway arrangement are offered for sale at retail by the seller if such sale were a sale for cash to be paid in full upon delivery on the date the layaway arrangement was entered into instead of pursuant to a layaway arrangement. Layaway price may include sales taxes.

Section 1317.02 | Buyer's copy.

• Effective: October 1, 1953
• Latest Legislation: House Bill 1 - 100th General Assembly

Every retail installment sale shall be evidenced by an instrument in writing. A copy of said instrument shall be delivered to the retail buyer by the retail seller at the time of its execution. An acknowledgment of the delivery thereof contained in the body of the instrument is prima-facie proof of delivery in any action to enforce any obligation arising out of the retail installment sale. The written instrument shall contain all of the agreements of the parties, and shall set forth specifically all items and matters required by sections 1317.01 to 1317.11, inclusive, of the Revised Code. The reference to insurance shall recite generally the type of insurance the retail seller has agreed to procure for the retail buyer but such reference to insurance shall not be construed to imply the scope of the coverage, the terms, exceptions, limitations, restrictions, or condition of the contract of insurance to be furnished. Said sections do not require the retail seller to comply with this section at any time prior to the delivery of the specific goods to the retail buyer.

Section 1317.03 | Evidence of indebtedness.

• Effective: July 1, 1962
• Latest Legislation: Senate Bill 5 - 104th General Assembly

A retail seller may require a retail buyer to execute and deliver a promissory note to evidence the indebtedness created by a retail installment sale, and, to secure the payment of the indebtedness created by the sale or evidenced by the promissory note or to secure the performance of any other condition of the sale, may require the retail buyer to execute and deliver a security agreement to give the retail seller a security interest in the specific goods which were the subject matter of the retail installment sale. A written instrument required by section 1317.02 of the Revised Code may evidence the security interest.

Section 1317.031 | Inclusion of holder in due course.

• Effective: August 19, 1994
• Latest Legislation: Senate Bill 147 - 120th General Assembly

Notwithstanding section 1303.35 of the Revised Code, a buyer who executes a purchase money loan installment note or a retail installment contract in connection with a consumer transaction may assert against any holder, assignee, or transferee of the note or contract, specifically including any holder in due course, as defined in section 1303.32 of the Revised Code, of the note or contract any defense that the buyer may assert against the seller that is authorized by this chapter.

Section 1317.032 | Asserting defenses against holder, assignee, or transferee of purchase money loan installment note or retail installment contract.

• Effective: August 8, 1980
• Latest Legislation: House Bill 272 - 113th General Assembly

(A) A buyer who is entitled to assert in an action in connection with a consumer transaction any of the following defenses against the seller of goods or services that are obtained pursuant to a purchase money loan installment note or retail installment contract may also assert the defenses against the holder, assignee, or transferee of the purchase money loan installment note or retail installment contract, whether or not any notice of potential claims and defenses is included in the note or contract:

(1) That the subject of the consumer transaction was not furnished or delivered by the seller in accordance with the agreed upon terms of the transaction;

(2) That, as evidenced by any writing in the consumer transaction, the subject of the transaction is not of the particular brand, color, or model that it was represented to be;

(3) That the subject of the consumer transaction is not new or unused, if the subject was represented by the seller to be new or unused;

(4) That the subject of the consumer transaction did not conform to any express or implied warranty made by the seller;

(5) That the consumer transaction was entered into because of a fraudulent act or misrepresentation committed or made by the seller.

(B) If a creditor, in writing, requests a debtor to disclose, in writing, whether the proceeds of a loan that he receives or will receive are to be applied to a consumer transaction, the debtor shall disclose at that time any such intended application. The written request imposes a continuing obligation upon the debtor to disclose any application of any part of the proceeds to a consumer transaction. If the debtor fails to disclose any application of the proceeds to a consumer transaction, the loan shall not be considered a purchase money loan for purposes of this chapter.

(C) A buyer, who has a defense against a seller arising out of a consumer transaction that he is entitled to assert as a defense against a holder, assignee, or transferee of a purchase money loan installment note or retail installment contract and as a cause of action against that seller, may assert the cause of action to recover from the holder, assignee, or transferee of the purchase money loan installment note or retail installment contract, the amount of any payments made to the holder, assignee, or transferee, if all of the following apply:

(1) The buyer has presented, or has made a reasonable effort to present, his claim to the seller, and furnished a copy of the claim to the holder, assignee, or transferee.

(2) The seller has not settled the claim within thirty days after the request if the buyer has presented the claim to the seller.

(3) The buyer's action against the holder, assignee, or transferee is brought within the earlier of the following dates:

(a) The date fixed by the note or contract for the last payment due under the note or contract;

(b) Two years after the date on which the note or contract is executed.

The assertion of such an action against the holder, assignee, or transferee is authorized even if the grounds for the cause of action against the seller are asserted as a defense in an action by the holder, assignee, or transferee.

(D)(1) As used in this section, "claim" means only those claims that arise from a consumer transaction evidenced by a purchase money loan installment note or retail installment contract, that do not involve a claim of personal injury, death, or property damage.

(2) The provisions of this section shall not be construed to limit or otherwise affect any other right, claim, or defense that a buyer may assert against a seller or any other person in an action relative to a consumer transaction, purchase money loan installment note, or retail installment contract.

Section 1317.04 | Separate items to be listed in written instrument.

• Effective: January 1, 2021
• Latest Legislation: House Bill 339 - 133rd General Assembly

The written instrument evidencing a retail installment sale and required by section 1317.02 of the Revised Code shall recite the following:

(A) The cash price of the specific goods.

(B) The amount in cash of the retail buyer's down payment, if any, whether made in money or goods or partly in money or partly in goods.

(C) The unpaid balance of the cash price payable by the retail buyer to the retail seller which is the difference between divisions (A) and (B).

(D) The amount included for any insurance and the types of insurance coverage.

(E) The principal balance owed on the retail installment contract which is the sum total of divisions (C) and (D).

(F) The amount of the finance charge.

(G) The time balance or indebtedness owed by the retail buyer to the retail seller and the number of installment payments required and the amount and date of each payment necessary finally to pay the time balance which is the sum total of divisions (E) and (F).

Divisions (D) and (F) may be added together and stated as one sum in the written instrument and if so stated division (E) may be omitted, but in such event the retail seller or the retail seller's successor in interest shall, within twenty-five days after the making of the retail installment contract, deliver personally, send by mail, or cause to be sent by mail, to the retail buyer at the retail buyer's address as shown on the retail installment contract, a statement reciting the separate amounts of divisions (D), (E), and (F). Division (F) may be stated as a rate, if said rate does not exceed eight per cent per annum straight interest, in which event the time balance provided in division (G) need not be stated.

The amount and date of each payment need not be separately listed if the payments are specified in terms of a series of payments of specified amounts, which amounts may state the principal amount plus the finance charge in terms of a rate at specified intervals of time from an initial date.

The initial date for the payment of the first installment may be a calendar date or may refer to the time of delivery or installation.

As used in this section "down payment" means that part of the payment of the cash price required by the retail seller as a condition to the delivery of the specific goods sold or to be sold or to the extension of credit to the retail buyer for any portion of the cash price.

Section 1317.05 | Insurance provisions; debt cancellation or debt suspension products.

• Effective: January 1, 2021
• Latest Legislation: House Bill 339 - 133rd General Assembly

(A) Any retail seller who, in any retail installment contract, has agreed to purchase insurance for the retail buyer and to extend credit for the price thereof, excluding single interest insurance, shall, prior to the due date of the first installment of the retail installment contract, deliver to the retail buyer personally, or mail or cause to be mailed to the retail buyer at the retail buyer's address as shown on the retail installment contract, the policy of insurance, or in lieu thereof a certificate of insurance, or the retail buyer is not liable on the retail buyer's retail installment contract until the policy, or certificate of insurance, is received, or full refund is made of the insurance premium.

If the premium for insurance of like kind and amount, as fixed in the published manual of a recognized standard rating bureau designated by the retail seller, is less than the amount charged the retail buyer as fixed in the written instrument in compliance with division (D) of section 1317.04 of the Revised Code, the retail buyer may deduct an amount equal to three times the difference from the amount owed the retail seller, or the retail seller's successor in interest. Sections 1317.01 to 1317.11 of the Revised Code do not impair the authority of the superintendent of insurance to grant, renew, or revoke licenses, nor do said sections authorize anyone other than a licensee of the division of insurance to directly or indirectly receive any part of the amount charged for insurance in connection with any retail installment sale.

(B) As used in this division, "debt cancellation or debt suspension product" means a contractual agreement in which a retail seller, or its assignee, agrees for a separate charge to cancel or waive all or a part of amounts due on a retail buyer's retail installment contract in the event of a total physical damage loss or unrecovered theft of the motor vehicle that is the subject of the contract. "Debt cancellation or debt suspension product" includes a guaranteed asset protection waiver, guaranteed auto protection waiver, or other similarly named agreement.

A debt cancellation or debt suspension product, and an addendum to a retail installment contract containing a debt cancellation or debt suspension product, shall be considered a part of the retail installment contract and shall remain a part of that contract upon the assignment, sale, or transfer of that contract. The charge for any debt cancellation or debt suspension product shall be listed as a specific good. The purchase price and the terms of the debt cancellation or debt suspension product shall be disclosed in writing to the buyer. The extension of credit, terms of the credit, or the terms of the related motor vehicle sale or lease shall not be conditioned on the purchase of the debt cancellation or debt suspension product. Notwithstanding any other provision of law, a debt cancellation or debt suspension product shall not be considered insurance.

(C) Single interest insurance shall be listed as a specific good in a retail installment contract.

(D) As used in this section, "single interest insurance" means insurance that covers only the interest of the holder of the retail installment contract.

Section 1317.06 | Finance charge - rates - service charge - contract for payment of delinquent charges.

• Effective: March 31, 1980
• Latest Legislation: House Bill 708 - 113th General Assembly

(A) A retail seller at the time of making any retail installment sale may charge and contract for the payment of a finance charge by the retail buyer and collect and receive the same, which shall not exceed the greater of the following:

(1) A base finance charge at the rate of eight dollars per one hundred dollars per year on the principal balance of the retail installment contract. On retail installment contracts providing for principal balances less than, nor not in multiples of one hundred dollars, or for installment payments extending for a period less than or greater than one year, said finance charge shall be computed proportionately. In addition to the base finance charge, the retail seller may charge and contract for a service charge of fifty cents per month for the first fifty dollar unit or fraction thereof, of the principal balance for each month of the term of the installment contract; and an additional service charge of twenty-five cents per month for each of the next five fifty dollar units or fraction thereof, of the principal balance for each month of the term of the installment contract. This paragraph applies only to retail installment contracts with a principal balance of seven hundred dollars or less.

(2) A pre-computed base finance charge not in excess of the amount obtained by applying the rate of one and one-half per cent per month to the unpaid portion of the unpaid principal balance determined to be outstanding from time to time according to the terms and schedule of payments of the retail installment contract executed in connection with such retail installment sale.

Such base finance charge and service charges may be computed on a basis of a full month for any fractional period in excess of ten days. For a fractional period of a month not in excess of ten days, there shall be no base finance charge or service charge.

Sections 1317.01 to 1317.11 of the Revised Code do not apply to any sale in which the base finance and service charge does not exceed the sum of fifteen dollars.

(B) Every retail seller may, at the time of making any retail installment sale, contract for the payment by the retail buyer of lawful delinquent charges as follows:

(1) No charges shall be made for delinquent payments less than ten days late.

(2) Five cents for each dollar for a delinquent payment that is more than ten days late may be charged, but in no event shall a delinquent charge for any one installment exceed three dollars.

A provision for the payment of interest on any installment not paid in full on or before its scheduled due date at a rate not to exceed one and one-half per cent interest per month is not a delinquent charge and is expressly authorized.

(C) No retail installment contract arising out of a consumer transaction and requiring the payment of the charges authorized by this section shall be executed unless the combined total of the cash price and all finance charges and service charges is required to be paid according to a schedule of substantially equal consecutive installments, except where the contract contains a provision allowing the buyer to refinance the contract under terms no less favorable than those of the original contract after making the refund credit required by section 1317.09 of the Revised Code. No seller shall, pursuant to any provision in a retail installment contract arising out of a consumer transaction, accelerate any payments on account of a default in the making of an installment payment that has not continued for at least thirty days. Division (C) of this section does not apply to the extent that the payment schedule is adjusted to the seasonal or irregular income of the buyer.

Section 1317.061 | Retail seller or holder may contract for and receive alternative finance charges or interest.

• Effective: February 11, 1982
• Latest Legislation: House Bill 526 - 114th General Assembly

As an alternative to the finance charges permitted in division (A) of section 1317.06 of the Revised Code or the interest permitted in division (B) of that section, and to the finance charges permitted in division (B) of section 1317.11 of the Revised Code, a retail seller or holder may contract for and receive finance charges or interest at any rate or rates agreed upon or consented to by the parties to the retail installment contract or revolving budget agreement, but not exceeding an annual percentage rate of twenty-five per cent.

Section 1317.062 | Retail seller or holder may contract for and receive alternative delinquent charges.

• Effective: September 27, 1996
• Latest Legislation: House Bill 538 - 121st General Assembly

(A)(1) As an alternative to the delinquent charges permitted in division (B) of section 1317.06 and division (B) of section 1317.11 of the Revised Code, a retail seller or holder may contract for and receive delinquent charges in any amount agreed upon or consented to by the parties to the retail installment contract or revolving budget agreement.

(2) Each retail installment contract and revolving budget agreement permitting delinquent charges in accordance with division (A)(1) of this section shall contain a statement that clearly and concisely informs the consumer of the amount of the delinquent charges and the conditions under which the delinquent charges will be charged.

(B) A retail seller or holder may contract with a retail buyer for and receive check collection charges for each check or other negotiable instrument that is issued as payment on the retail installment contract or revolving budget agreement and that is returned or dishonored for any reason.

(C) Any charges that are contracted for and received by a retail seller or holder as permitted by this section shall not be included in the computation of the annual percentage rate or rates of interest or finance charges for purposes of determining whether the maximum annual percentage rate or maximum rate or rates of interest or finance charges authorized under sections 1317.06, 1317.061, and 1317.11 of the Revised Code have been exceeded.

Section 1317.07 | Requirements of retail installment contract.

• Effective: October 24, 2024
• Latest Legislation: Senate Bill 94 - 135th General Assembly

No retail installment contract authorized by section 1317.03 of the Revised Code that is executed in connection with any retail installment sale shall evidence any indebtedness in excess of the time balance fixed in the written instrument in compliance with section 1317.04 of the Revised Code, but it may evidence in addition any agreements of the parties for the payment of delinquent charges, as provided for in section 1317.06 of the Revised Code, taxes, and any lawful fee actually paid out, or to be paid out, by the retail seller to any public officer for filing, recording, or releasing any instrument securing the payment of the obligation owed on any retail installment contract. No retail seller, directly or indirectly, shall charge, contract for, or receive from any retail buyer, any further or other amount for examination, service, brokerage, commission, expense, fee, or other thing of value, unless the retail seller is otherwise authorized by law to do so. A documentary service charge customarily and presently being paid on May 9, 1949, in a particular business and area may be charged if the charge does not exceed two hundred fifty dollars per sale, except as otherwise authorized by section 4517.261 of the Revised Code.

No retail seller shall use multiple agreements with respect to a single item or related items purchased at the same time, with intent to obtain a higher charge than would otherwise be permitted by Chapter 1317. of the Revised Code or to avoid disclosure of an annual percentage rate, nor by use of such agreements make any charge greater than that which would be permitted by Chapter 1317. of the Revised Code had a single agreement been used.

Last updated August 27, 2024 at 3:00 PM

Section 1317.071 | Limits on security interests.

• Effective: April 4, 1973
• Latest Legislation: House Bill 350 - 109th General Assembly

No retail seller, in connection with a retail installment contract arising out of a consumer transaction, shall take any security interest other than as authorized by this section.

A seller may take a security interest in the property sold, and in goods upon which services are performed or in which goods sold are installed or to which they are annexed.

A seller may secure the debt arising from the sale by contracting for a security interest in other property if, as a result of a prior sale, the seller has an existing security interest in the other property, and he may contract for a security interest in the property sold in the subsequent sale as security for the previous debt. If debts arising from two or more sales are thus secured or are consolidated into one debt payable on a single schedule of payments, and the debt is secured by security interests taken with respect to one or more of the sales, payments received by the seller after the taking of security interests in the other property or the consolidation are deemed, for the purpose of determining the amount of the debt secured by the various security interests, to have been first applied to the payment of the debts arising from the sales first made. To the extent debts are paid according to this section, security interests in items of property terminate as the debt originally incurred with respect to each item is paid.

Payments received by the seller upon a revolving charge account are deemed, for the purpose of determining the amount of the debt secured by the various security interests, to have been applied first to the payment of credit service charges in the order of their entry to the account and then to the payment of debts in the order in which the entries to the account showing the debts were made.

If the debts consolidated arose from two or more sales made on the same day, payments received by the seller are deemed, for the purpose of determining the amount of the debt secured by the various security interests, to have been applied first to the payment of the smallest debt.

Section 1317.08 | Unenforceable retail installment contracts.

• Effective: February 19, 2002
• Latest Legislation: House Bill 229 - 124th General Assembly

(A)(1) No retail installment contract that evidences an indebtedness greater than that allowed under sections 1317.06, 1317.061, 1317.062, and 1317.07 of the Revised Code, and no retail installment contract in connection with which any charge prohibited by sections 1317.01 to 1317.11 of the Revised Code has been contracted for or received, shall be enforceable with respect to that excess indebtedness or charge against any retail buyer or any other person who as surety, indorser, guarantor, or otherwise is liable on the obligation created by any retail buyer on any retail installment contract.

(2) No security interest created by any retail installment contract described in division (A)(1) of this section that is greater than that allowed under sections 1317.06, 1317.07, and 1317.071 of the Revised Code shall be enforceable with respect to that excess security interest against any retail buyer or any of the persons described in division (A)(1) of this section, in default under the terms of the retail installment contract.

(B) In order for a retail buyer, or any of the persons described in division (A)(1) of this section that is liable on the retail buyer's obligation, to avail the retail buyer or other person of this section, the retail buyer or other person must prove that the retail seller or the holder of the retail installment contract has been notified in writing of the overcharge and has failed within ten days of such notification to advise the retail buyer of a full credit, or the retail buyer or other person must prove that the overcharge has been willful. A correction of any overcharge within sixty days of the date of making of the retail installment contract is conclusive proof of lack of willfulness.

(C) This section applies to cases in which recovery is sought from the retail seller or holder of the retail installment contract.

(D) If charges greater in amount than those provided for in sections 1317.01 to 1317.11 of the Revised Code are contracted for or received by the retail seller or the retail seller's agent, assignee, or successor in interest, the retail buyer or the retail buyer's assignee or successor in interest may recover the total amount of finance charges paid to the retail seller or the retail seller's agent, assignee, or successor in interest, in excess of the interest rate that otherwise would apply under section 1343.01 of the Revised Code.

Section 1317.09 | Payment in full before maturity - refund credit.

• Effective: October 1, 1953
• Latest Legislation: House Bill 1 - 100th General Assembly

Notwithstanding any retail installment contract to the contrary, any retail buyer may satisfy in full at any time before maturity the debt of any retail installment contract and in so satisfying such debt shall receive a refund credit thereon for such anticipation of payments. The amount of such refund shall represent at least as great a proportion of the total finance charge, less an acquisition cost of ten dollars, as the sum of the periodical time balances, after the date of prepayment, bears to the sum of all the periodical time balances under the schedule of payments in the original contract. When the amount of the credit for anticipation of payments is less than one dollar, no refund need be made.

Section 1317.10 | Prior agreement is not a waiver.

• Effective: October 1, 1953
• Latest Legislation: House Bill 1 - 100th General Assembly

No agreement of any retail buyer made prior to or concurrent with the execution of any retail installment contract is a waiver of sections 1317.01 to 1317.11, inclusive, of the Revised Code.

Section 1317.11 | Prior sales or contracts not affected - revolving budget agreements.

• Effective: July 7, 1986
• Latest Legislation: House Bill 573 - 116th General Assembly

Sections 1317.01 to 1317.10 of the Revised Code do not apply to any sale or to any contract to sell made prior to August 10, 1949, which, if made after that date, would be a retail installment sale or contract and said sections do not affect pending litigation or revolving budget or revolving credit agreements, however described, under which finance charges are computed in relation to the buyer's unpaid balance from time to time, or sales made pursuant thereto, by a retail seller or sellers, provided they comply with the provisions of this section.

(A) Such agreements, in this section called revolving budget agreements, and sales made pursuant thereto, shall be governed solely by and shall comply with this section. A copy of any such agreement executed after January 1, 1960, shall be delivered to the retail buyer by the retail seller, or his successor in interest, in this section called "holder," within thirty days after its execution, but in no event later than the date on which the first payment is due thereunder. The copy shall state the maximum amount or rate of the finance charge and any delinquent charges permitted to be charged, collected, and received under a revolving budget agreement pursuant to the provisions of division (B) of this section.

The retail seller or holder under any revolving budget agreement shall supply the retail buyer thereunder with a statement as of the beginning or end of each period in which there is any unpaid balance thereunder, which may be a calendar month or other regular period not in excess of thirty-one days, agreed upon by the seller or holder and buyer. The statement shall recite the following:

(1) The unpaid balance under such agreement at the beginning and end of the period;

(2) Unless otherwise furnished by the retail seller or holder to the retail buyer by sales slip, memorandum, or otherwise, an identification of the goods purchased during the period, the cash purchase price, and the date of each purchase;

(3) The payments made by the retail buyer to the retail seller or holder and any other credits to the retail buyer during the period;

(4) The amount of the finance charge, if any;

(5) A legend to the effect that the retail buyer may at any time pay his unpaid balance without incurring further finance charges.

(B) The following provisions shall control the amount of the finance charge and delinquent charges that may be contracted for, charged, collected, and received with respect to any sale made pursuant to a revolving budget agreement. Finance charges not in excess of the amount excepted by section 1317.06 of the Revised Code from the application of sections 1317.01 to 1317.11 of the Revised Code, may continue to be contracted for, charged, collected, and received with respect to any other sale without regard to whether said sections are otherwise applicable thereto. A retail seller or holder under a revolving budget agreement may charge, collect, and receive a finance charge that shall not exceed the sum obtained by applying to the unpaid balance, including therein any arrearages of finance charges, at the beginning or end of each period, or upon the average daily balance during each period, a finance charge at a rate not exceeding one and one-half per cent per month.

If the finance charge so computed is less than one dollar for any such monthly period, the retail seller or holder may nevertheless charge, collect, and receive not in excess of one dollar for such month's charges.

No change in terms of a revolving budget agreement shall be made to permit a retail seller to charge, collect, or receive a finance charge computed by applying the finance charge rate to the average daily balance during each period rather than to the unpaid balance at the beginning or end of each period as provided in such agreement unless at least thirty days prior to the effective date of such change a written notice has been mailed or delivered to the buyer which describes such change in terms and states that a purchase or other charge on the account made by the buyer or other person authorized by him on or after the effective date stated in the notice shall constitute acceptance of such change in terms.

Every retail seller may, at the time of making any sale pursuant to a revolving budget agreement, contract for the payment by the retail buyer of lawful delinquent charges as follows:

(1) No charges shall be made for delinquent payments less than ten days late.

(2) Five cents for each dollar for a delinquent payment that is ten or more days late may be charged, but in no event shall a delinquent charge for any one installment exceed three dollars.

No pre-payment charges are permitted under a revolving budget agreement, but this shall not prevent a retail seller or holder from including in the unpaid balance finance charges theretofore incurred.

Section 1317.12 | Default - notice, curing.

• Effective: July 1, 2001
• Latest Legislation: Senate Bill 74 - 124th General Assembly

Notwithstanding any agreement to the contrary in a retail installment contract made on or after the effective date of this section, if collateral for a consumer transaction is taken possession of by the secured party on default, the secured party shall, within five business days after taking possession, send to the debtor a notice setting forth specifically the circumstances constituting the default and the amount by itemization that the debtor is required to pay to cure the default. Any notice required by section 1309.611 or 1317.16 of the Revised Code may be included as part of the notice required by this section. A secured party who disposes of the collateral without sending notice required by this section may not recover the costs of retaking possession of the collateral and is not entitled to a deficiency judgment.

The debtor may cure the default within twenty days after the secured party retakes possession of the collateral, or within fifteen days after the secured party sends the notice required by this section, whichever is later, by delivering to the secured party the following:

(A) All installments due or past due at the time of such delivery;

(B) Any unpaid delinquency or deferred charges;

(C) The actual and reasonable expenses incurred by the secured party in retaking possession of the collateral provided that any portion of such expenses which exceeds twenty-five dollars need not be delivered to the secured party pursuant to this division, but shall be added to the time balance;

(D) A deposit by cash or bond in the amount of two installments, to secure the timely payment of future installments by the debtor. The secured party may apply such cash or the proceeds of such bond toward the satisfaction of the debt in the event of another default by the debtor.

During the period between the time a secured party retakes possession of the collateral and the expiration or exercise of the debtor's right to cure the default, the secured party shall make the collateral available for inspection by the debtor during reasonable hours.

If the debtor cures the default, the debtor may take possession of the collateral. The secured party shall assemble the collateral and make it available to the debtor at a time and place that is reasonably convenient to both parties. If the debtor requests the secured party to return the collateral to the place from which it was taken, the secured party may charge the debtor the actual and reasonable expenses incurred in returning the collateral to the place from which it was taken, which amount shall be added to the time balance.

A debtor's right to cure the default pursuant to this section may not be exercised more than once with respect to a single debt.

A secured party who reasonably believes that a debtor intends to conceal or remove the collateral from this state after curing the default may, within five days after retaking possession of the collateral, move in a court of competent jurisdiction that the secured party be allowed to retain possession of the collateral as security for the debt. If the court finds reasonable cause to believe that the debtor intends to conceal the collateral or remove it from this state, it shall order that the collateral remain in the possession of the secured party, notwithstanding the other provisions of this section. If the debtor cures the default, the secured party shall not dispose of the collateral unless the debtor again defaults, and the secured party shall make such collateral available to the debtor when the debt is paid in full.

Section 1317.13 | Time balance.

• Effective: July 1, 2001
• Latest Legislation: Senate Bill 74 - 124th General Assembly

As used in this section, "motor vehicle" and "mobile home" have the same meanings as in section 4501.01 of the Revised Code, and "manufactured home" has the same meaning as in section 3781.06 of the Revised Code.

Notwithstanding the provisions of section 1309.609 of the Revised Code or any agreement by the parties to a consumer transaction to the contrary, a secured party whose security interest is taken pursuant to section 1317.071 of the Revised Code shall not be entitled to take possession of the collateral, except for collateral that is a motor vehicle, a manufactured home, or a mobile home, upon default by the debtor if the time balance at the time of the default is less than twenty-five per cent of the sum of the time balance on the day such retail installment contract was executed and the down payment recited in such contract.

Section 1317.14 | Waiver of defenses provision in contract is void.

• Effective: August 8, 1980
• Latest Legislation: House Bill 272 - 113th General Assembly

Any provision in a retail installment contract or in any other agreement that is executed on or after August 1, 1980, by which a buyer in connection with a consumer transaction agrees not to assert any defenses against a seller, or the seller's assignee or transferee, is void, and the courts have no jurisdiction to enforce any such provision.

Section 1317.16 | Disposition of collateral.

• Effective: July 1, 2001
• Latest Legislation: Senate Bill 74 - 124th General Assembly

(A) A secured party whose security interest is taken pursuant to section 1317.071 of the Revised Code may, after default, dispose of any or all of the collateral only as authorized by this section.

(B) Disposition of the collateral shall be by public sale only. Such sale may be as a unit or in parcels and the method, manner, time, place, and terms thereof shall be commercially reasonable. At least ten days prior to sale the secured party shall send notification of the time and place of such sale and of the minimum price for which such collateral will be sold, together with a statement that the debtor may be held liable for any deficiency resulting from such sale, by certified mail, return receipt requested, to the debtor at the debtor's last address known to the secured party, and to any persons known by the secured party to have an interest in the collateral. In addition, the secured party shall cause to be published, at least ten days prior to the sale, a notice of such sale listing the items to be sold, in a newspaper of general circulation in the county where the sale is to be held.

(C) Except as modified by this section, sections 1309.610, 1309.611, 1309.615, 1309.617, and 1309.624 of the Revised Code govern disposition of collateral by the secured party.

Section 1317.21 | Breach of layaway arrangement by buyer.

• Effective: May 1, 1992
• Latest Legislation: House Bill 289 - 119th General Assembly

(A) Notwithstanding division (B) of section 1302.92 of the Revised Code and excluding layaway arrangements made pursuant to section 1317.22 of the Revised Code, when a seller justifiably withholds the delivery of specific goods because of the buyer's breach of a layaway arrangement, then both of the following apply:

(1) The amount of the liquidated damages to which the seller is entitled shall not exceed the lesser of twenty-five dollars or ten per cent of the value of specific goods subject to the layaway arrangement.

(2) The buyer is entitled to a refund of the balance of deposits and payments that he previously made pursuant to the layaway arrangement, determined after deducting the liquidated damages described in division (A)(1) of this section.

(B)(1) If a buyer fails to comply with the layaway arrangement, then, except as provided in division (C) and except for a buyer cancellation under division (F) of this section, the seller shall send a notice to the buyer in accordance with division (B)(2) of this section that contains all of the following information:

(a) The fact that the buyer has failed to comply with the layaway arrangement;

(b) A statement indicating whether the buyer has failed to comply with the layaway arrangement because he failed to pay the full layaway price when it was due, or because he failed to make one or more deposits or other payments when they were required to be made pursuant to the layaway arrangement, and a statement of the total amount presently owed by the buyer in order to remedy the breach and reinstate the layaway arrangement;

(c) Unless, within ten days from the date of the giving of the notice in accordance with division (B)(2) of this section, the buyer complies with the layaway arrangement that he has breached by paying the total amount presently owed to remedy the breach and reinstate the layaway arrangement, the seller may return the specific goods subject to the layaway arrangement to the retail inventory of the seller and offer the same for sale to other buyers.

(2) A seller shall give the notice required by division (B)(1) of this section to a buyer as follows:

(a) In a writing that is sent by certified mail, return receipt requested, or by regular mail evidenced by a properly completed and stamped certificate of mailing by regular mail, to the buyer's address as set forth by the buyer in the layaway arrangement or subsequent written notification of address change if applicable, or otherwise to the buyer's last known mailing address;

(b) At least ten days prior to the date that the seller intends to return the specific goods subject to the layaway arrangement to the retail inventory of the seller and offer the same for sale to other buyers.

(C) If the layaway price of the specific goods subject to the layaway arrangement is one hundred dollars or less, the seller need not send the notice required under this section if the seller furnished a written copy of the layaway arrangement to the buyer at the time the initial deposit or payment was paid and the copy indicated that the seller may retain liquidated damages in accordance with division (A) of this section in the event that the buyer breaches the layaway arrangement.

(D) Notwithstanding division (A) of this section, if the buyer breaches the layaway arrangement and if the seller is required to give the notice described in division (B)(1) of this section but fails to do so in accordance with division (B)(2) of this section, then both of the following apply:

(1) The seller forfeits his right to liquidated damages under division (A) of this section in connection with the buyer's breach of the layaway arrangement;

(2) The buyer is entitled to a refund of the entire amount of the deposits or payments that he previously made pursuant to the layaway arrangement.

(E) If a seller who is required to give the notice described in division (B)(1) of this section gives it in accordance with division (B)(2) of this section, and if the buyer fails, within ten days from the date of the giving of the notice in accordance with that division, to comply with the layaway arrangement that he has breached by paying the total amount presently owed in order to remedy the breach and reinstate the layaway arrangement, then both of the following apply:

(1) The seller may return any specific goods subject to the layaway arrangement to the retail inventory of the seller and offer it for sale to other persons.

(2) The right of the seller to liquidated damages under division (A) of this section in connection with the buyer's breach of the layaway arrangement is not impaired and the buyer is entitled only to a refund of the balance of the deposits and payments that he previously made pursuant to the layaway arrangement as determined in accordance with that division.

(F) The buyer may cancel the contract by giving written notice of cancellation to the seller at any time. Upon receipt of the notice, the seller shall consider the layaway arrangement terminated and shall provide a refund to the buyer pursuant to this section and section 1317.23 of the Revised Code.

Section 1317.22 | Contract for sales over $500 or special order merchandise require a writing.

• Effective: November 6, 1992
• Latest Legislation: House Bill 693 - 119th General Assembly

(A) If a contract for sale at retail is a layaway arrangement involving the sale of merchandise or specific goods at a price above five hundred dollars, the layaway arrangement shall be evidenced by a written contract between the buyer and the seller and shall not be subject to division (A)(1) of section 1317.21 of the Revised Code. The seller shall provide a copy of the written contract to the buyer at the time the buyer pays the initial deposit, down payment, or part payment to the seller for the merchandise or specific goods which are the subject of the layaway arrangement. The written contract shall include all of the following:

(1) A description of the merchandise or specific goods which are the subject of the layaway arrangement including, when available, the model, model year, manufacturer, and color;

(2) The layaway price of the merchandise or specific goods;

(3) If applicable, the amount the seller agrees to apply toward payment of the layaway price for items the seller agrees to take from the buyer in exchange for the merchandise or specific goods which are the subject of the layaway arrangement;

(4) A schedule stating when deposits, down payments, or part payments are due to the seller in order for the buyer to be considered in compliance with the layaway arrangement;

(5) Except as limited by divisions (A)(6) and (8) of this section, the conditions under which any deposits, down payments, or part payments are refundable;

(6) A guarantee that if the buyer breaches the layaway arrangement, he is entitled to purchase other merchandise or specific goods from the seller equal in price to the total amount the buyer paid to the seller as of the date of the breach in deposits, down payments, or part payments for the merchandise or specific goods which are the subject of the breached layaway arrangement and that if no merchandise or specific goods are available which the buyer desires to purchase, the seller shall refund to the buyer the amount paid by the buyer in deposits, down payments, and part payments for the merchandise or specific goods according to the terms of the contract, provided that the contract shall not contain any term which permits the seller to retain more than fifty per cent of the total amount of deposits, down payments, or part payments made by the buyer;

(7) Any reasonable charges the seller may add to the layaway price, such as delivery or storage charges, and the conditions under which the charges are assessed to the buyer;

(8) A provision that if the buyer cancels the contract by giving written notice of cancellation to the seller within five days after entering into the layaway arrangement, the seller shall refund the total amount paid by the buyer in deposits, down payments, and part payments for the merchandise or specific goods which are the subject of the layaway arrangement;

(9) A provision that the buyer may cancel the contract by giving written notice of cancellation to the seller at any time. Upon receipt of this notice, the seller shall consider the layaway arrangement terminated and shall provide a refund to the buyer in accordance with the contract, this section, and section 1317.23 of the Revised Code.

(B) If a contract for sale at retail is a layaway arrangement required to be evidenced by a written contract under division (A) of this section and if that layaway arrangement is not evidenced by a written contract that complies with this section, the layaway arrangement is governed by section 1317.21 of the Revised Code.

Section 1317.23 | Payment of refunds.

• Effective: May 1, 1992
• Latest Legislation: House Bill 289 - 119th General Assembly

Refunds provided to a buyer under sections 1317.21 and 1317.22 of the Revised Code shall be made by the seller within thirty days of the completion of the applicable notice requirement by delivering cash, a check, or a money order to the buyer. The seller may determine the method of payment and the buyer may determine the manner of delivering the refund. If the seller delivers a cash refund to the buyer in a face-to-face transaction, the seller may require the buyer to sign a receipt for the refund. The receipt shall indicate the date and amount of the refund and shall identify with reasonable specificity the merchandise or specific good which was the subject of the layaway arrangement.

Section 1317.24 | Failure to comply is unfair or deceptive act or practice.

• Effective: May 1, 1992
• Latest Legislation: House Bill 289 - 119th General Assembly

A seller's failure to comply with sections 1317.21 to 1317.23 of the Revised Code is an unfair or deceptive act or practice in violation of section 1345.02 of the Revised Code.

Section 1317.99 | Penalty.

• Effective: January 9, 1961
• Latest Legislation: House Bill 1 - 104th General Assembly

(A) Whoever willfully violates sections 1317.01 to 1317.11, inclusive, of the Revised Code, shall be fined not more than one thousand dollars or imprisoned not more than one year, or both.