Texas Business & Commerce Code - Section 35.72. Form
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§ 35.72. FORM. (a) A rental-purchase agreement must be
written in plain English and in any other language used by the
merchant in an advertisement related to the rental-purchase
agreement. Numerical amounts must be stated in figures.
(b) Disclosures required by this subchapter must be printed
or typed in each rental-purchase agreement in a size equal to at
least 10-point bold-faced type. The attorney general shall provide
a form agreement that may be used to satisfy the requirements of an
agreement under this subchapter.
(c) A rental-purchase agreement may not contain a
provision:
(1) requiring a confession of judgment;
(2) authorizing a merchant or an agent of the merchant
to commit a breach of the peace in the repossession of merchandise;
(3) waiving a defense, counterclaim, or right the
consumer may have against the merchant or an agent of the merchant;
(4) requiring the purchase of insurance or a loss
damage waiver from the merchant to cover the merchandise;
(5) requiring the payment of a late charge or
reinstatement fee unless a periodic payment is delinquent for more
than seven days if the payment is due monthly, or is delinquent for
more than three days if the payment is due more frequently than
monthly, and the charge or fee is in an amount equal to not more than
the lesser of 10 percent of the delinquent payment or $10, and not
less than $5; or
(6) requiring a payment at the end of the scheduled
rental-purchase term in excess of or in addition to a regular
periodic payment in order to acquire ownership of the merchandise.
In no event shall the consumer be required to pay a sum greater than
the total amount to be paid to acquire ownership, as disclosed in
Subsection (g)(3) of this section.
(d) Only one late charge or reinstatement fee may be
collected on a payment regardless of the period during which it
remains in default.
(e) A rental-purchase agreement must provide that:
(1) a charge in addition to periodic payments, if any,
must be reasonably related to the service performed; and
(2) a consumer who fails to make a timely payment may
reinstate an agreement, without losing rights or options previously
acquired, by taking the required action before the later of one week
or half of the number of days in a regular payment period after the
due date of the payment.
(f) Notice of the right to reinstate an agreement must be
disclosed in the agreement. This subchapter does not prevent a
merchant from attempting repossession of merchandise during the
reinstatement period, and the consumer's right to reinstate an
agreement does not expire because of such a repossession. If the
merchandise is returned during the applicable reinstatement
period, other than through judicial process, the right to reinstate
the agreement shall be extended for a period of not less than 30
days after the date of the return of the merchandise. On
reinstatement, the merchant shall provide the consumer with the
same merchandise or substitute merchandise of comparable quality
and condition. If substitute merchandise is provided, the merchant
shall provide the consumer with the disclosures required in
Subsection (g) of this section.
(g) A rental-purchase agreement must disclose:
(1) whether the merchandise is new or used;
(2) the amount and timing of payments;
(3) the total number of payments necessary and the
total amount to be paid to acquire ownership of the merchandise;
(4) the amount and purpose of any payment, charge, or
fee in addition to the regular periodic payments;
(5) whether the consumer is liable for loss or damage
to the merchandise, and if so the maximum amount for which the
consumer may be liable;
(6) that the consumer does not acquire ownership
rights unless the consumer has complied with the ownership terms of
the agreement; and
(7) the cash price of the merchandise.
Added by Acts 1985, 69th Leg., ch. 209, § 1, eff. Sept. 1, 1985.
Amended by Acts 2003, 78th Leg., ch. 816, § 24.002, eff. Sept. 1,
2003; Acts 2005, 79th Leg., ch. 1346, § 1, eff. June 18, 2005.
Section: 35.585 35.59 35.591 35.60 35.61 35.62 35.71 35.72 35.721 35.722 35.73 35.74 35.81 35.82 35.83
Last modified: August 10, 2007
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