SECTIONS 1808.1-1808.5 - California Statutes

CIVIL CODE

SECTION 1808.1-1808.5

1808.1. A retail installment contract, which otherwise conforms to
the requirements of this chapter, may contain the provision that the
seller may at his option add subsequent purchases made by the buyer
to the contract, and that the total price of the goods or services
covered by the contract shall be increased by the price of such
additional goods or services, and that all finance charges and
installment payments may at the seller's option be increased
proportionately, and that all terms and conditions of the contract
shall apply equally to such additional goods or services. The
contract may also provide that the goods purchased under the previous
contract or contracts shall be security for the goods purchased
under the subsequent contract but only until such time as the total
of payments under the previous contract or contracts is fully paid.

1808.2. When a subsequent purchase is made, the entire amount of
all payments made previous thereto shall be deemed to have been
applied toward the payment of the previous deferred payment price or
deferred payment prices. Each payment thereafter received shall be
deemed to be allocated to all of the various deferred payment prices
in the same proportion or ratio as the original cash sale prices of
the various purchases bear to one another; where the amount of each
installment payment is increased in connection with the subsequent
purchase, the subsequent payments (at the seller's election) may be
deemed to be allocated as follows: an amount equal to the original
payment to the previous deferred payment price, and an amount equal
to the increase, to the subsequent deferred payment price. However,
the amount of any initial or downpayment on the subsequent purchase
shall be deemed to be allocated in its entirety to such purchase.
When a subsequent purchase under this section is made the seller
shall deliver to the buyer, prior to the due date of the first
installment, a memorandum which shall set forth the following:
(a) The names of the seller and the buyer, the place of business
of the seller, the residence or place of business of the buyer as
specified by the buyer and a description of the goods and services
sufficient to identify them. Services or multiple items of goods may
be described in general terms and may be described in detail in a
separate writing.
(b) The cash price of the goods, services and accessories which
are the subject matter of the new retail installment sale.
(c) The amount of the buyer's downpayment, itemizing the amounts
paid in money and in goods and containing a brief description of the
goods, if any, traded in.
(d) The difference between item (b) and item (c) which is the
unpaid balance of cash price.
(e) The amount of the existing outstanding balance to be
consolidated, which consists of the unpaid time balance or balances
of the prior contract or contracts to be consolidated.
(f) The amount of any unearned finance charge, determined by
deducting from the amount of item (e) any then unearned finance
charge in an amount not less than the refund credit provided for in
Article 6 (commencing with Section 1806.1) of this chapter (computed,
however, without the allowance of any minimum earned finance
charge).
(g) The difference between items (e) and (f), which is the net
outstanding balance to be consolidated.
(h) The amount, if any, included for insurance, specifying the
coverages.
(i) The amount, if any, of official fees.
(j) The unpaid balance, which is the sum of items (d), (g), (h)
and (i).
(k) The finance charge (1) expressed as the annual percentage rate
as defined in Regulation Z and (2) expressed in dollars, and
computed in conformity with Section 1808.5.
(l) The number, amount, and due dates or periods of payment
scheduled to repay the indebtedness and the sum of such payments.
(m) Any "balloon payments" as described in Section 1807.3.
The items need not be stated in the sequence or order set forth
above; additional items may be included to explain the computations
made in determining the amount to be paid by the buyer. If the
finance charge or any portion thereof is calculated on the 365-day
basis, the amount of the finance charge shown pursuant to item (k)
shall be that amount which will be incurred by the buyer if all
payments are received by the seller on their respective due dates.

1808.3. If a credit sale is one of a series of transactions made
pursuant to an agreement providing for the addition of the amount
financed plus the finance charge for the current sale to an existing
outstanding balance, and the disclosures required under this article
for the initial sale and each subsequent sale are delayed until some
date prior to the date the first payment for that particular sale is
due; and
(1) The customer has approved in writing both the annual
percentage rate or rates and the method of treating any unearned
finance charge on an existing outstanding balance in computing the
finance charge or charges; and
(2) The seller retains no security interest in any property as to
which he has received payments aggregating the amount of the sale
price including any finance charges attributable thereto; then, for
the purposes of this section, in the case of items purchased on
different dates, the first purchased shall be deemed first paid for,
and in the case of items purchased on the same date the lowest priced
shall be deemed first paid for.
When a credit sale under this section is made, the seller shall
deliver to the buyer, prior to the due date of the first installment,
a memorandum which shall set forth the following:
(a) The names of the seller and the buyer, the place of business
of the seller, the residence or place of business of the buyer as
specified by the buyer and a description of the goods and services
sufficient to identify them. Services or multiple items of goods may
be described in general terms and may be described in detail in a
separate writing.
(b) The cash price of the goods, services and accessories which
are the subject matter of the new retail installment sale.
(c) The amount of the buyer's downpayment, itemizing the amounts
paid in money and in goods and containing a brief description of the
goods, if any, traded in.
(d) The difference between item (b) and item (c), which is the
unpaid balance of cash price.
(e) The amount, if any, included for insurance, specifying the
coverages.
(f) The amount, if any, of official fees.
(g) The amount financed, which is the sum of items (d), (e) and
(f).
(h) The amount of the finance charge (1) expressed as the annual
percentage rate as defined in Regulation Z and (2) expressed in
dollars, which is to be computed in accordance with this chapter.
(i) The deferred payment price, which is the sum of the amounts
determined under items (b), (e), (f) and (h).
(j) The previous balance, which is the amount owing on prior
purchases.
(k) The number, amount, and due dates or periods of payments
scheduled to repay the indebtedness and the sum of such payments.
(l) Any "balloon payments," as described in Section 1807.3.
The items need not be stated in the sequence or order set forth
above; additional items may be included to explain the computations
made in determining the amount to be paid by the buyer. If the
finance charge or any portion thereof is calculated on the 365-day
basis, the amount of the finance charge shown pursuant to item (h)
shall be that amount which will be incurred by the buyer if all
payments are received by the seller on their respective due dates.

1808.4. Until the seller delivers to the buyer the memorandum as
provided in Sections 1808.2 and 1808.3, the buyer shall be obligated
to pay only the cash price of the subsequent purchase.

1808.5. Subject to the other provisions of Article 5 (commencing
with Section 1805.1), the finance charge to be included in a
consolidated total of payments under subdivision (l) of Section
1808.2 shall be determined by applying the finance charge at the
applicable rate to the unpaid balance under subdivision (j) of
Section 1808.2, for the period from the date of the consolidation to
and including the date when the final installment of the consolidated
total is payable.