# Title 51 — Sales and Exchanges

## Chapter 51-13 — Retail Installment Sales Act

### § 51-13-01. Definitions.

In this chapter, unless the context or subject matter otherwise requires:
1. "Amount financed" or "unpaid balance" means the cash price of the personal property
which is the subject matter of the retail installment sale, plus the amounts, if any,
included in a retail installment sale for insurance and official fees, minus the amount of
the buyer's downpayment in money or goods.
2. "Cash price" means the cash price stated in a retail installment contract for which the
seller would sell to the buyer, and the buyer would buy from the seller, the personal
property which is the subject matter of the contract if the sale were a sale for cash
instead of a retail installment sale. The cash price may include any taxes and cash
prices for accessories included in a retail installment sale.
3. "Deferred payment price" means the total of the cash price and the amounts, if any,
included for insurance, official fees, and finance charge.
4. "Finance charge" means the amount which the retail buyer contracts to pay or pays for
the privilege of purchasing the personal property to be paid for by the buyer in
installments; it does not include the amounts, if any, charged for insurance premiums,
delinquency charges, attorney's fees, court costs, collection expenses, or official fees.
5. "Financing agency" means a person engaged, in whole or in part, in the business of
purchasing retail installment contracts from one or more retail sellers. The term
includes a bank, trust company, finance company, or investment company, if so
engaged. The term also includes a retail seller engaged, in whole or in part, in the
business of holding retail installment contracts acquired from retail buyers. The term
does not include the pledgee of an aggregate number of such contracts to secure a
bona fide loan thereon.
6. "Holder" means the seller of the personal property under or subject to the contract, or,
if the contract is purchased by a financing agency or other assignee, the financing
agency or other assignee.
7. "Official fees" means the filing or other fees required by law to be paid to a public
officer to perfect the interest or lien retained or taken by a seller under the retail
installment contract, and to file or record a release, satisfaction, or discharge of the
contract, and license, certificate of title, and registration fees imposed by law.
8. "Person" means an individual, partnership, corporation, limited liability company,
association, or other group, however organized.
9. "Retail buyer" or "buyer" means a person who buys personal property from a retail
seller in a retail installment sale.
10. "Retail installment contract" or "contract" means an agreement, entered into in this
state, pursuant to which the title to or a lien upon the personal property, which is the
subject matter of a retail installment sale, is retained or taken by a retail seller from a
retail buyer as security, in whole or in part, for the buyer's obligation, or a contract for
the bailment or leasing of personal property by which the bailee or lessee contracts to
pay as compensation for its use a sum substantially equivalent to or in excess of its
value and by which it is agreed that the bailee or lessee is bound to become, or has
the option of becoming, the owner of the personal property upon full compliance with
the terms of the contract.
11. "Retail installment sale" or "sale" means a sale, other than for the purpose of resale, of
personal property by a retail seller to a retail buyer for a price payable in one or more
deferred payments.
12. "Retail seller" or "seller" means a person who sells personal property to a retail buyer.
13. "Total of payments" or "time balance" means the total of the unpaid balance and the
amount of the finance charge, if any, payable by the buyer.

### § 51-13-02. Requirements as to retail installment contracts.

1. A retail installment contract must be dated and in writing, and must contain all the
agreements of the parties with respect to the cost and terms of payment for the
personal property, including any promissory notes or other evidences of indebtedness
between the parties relating to the transaction.
2. If the retail installment sale for which the retail installment contract is made is not
subject to the Truth in Lending Act [15 U.S.C. 1601-1667f], or if the retail installment
sale is subject to that Act and the seller does not comply with all the requirements of
that Act, this subsection applies.
a. The printed portion of the contract must be in at least eight-point type. The
contract must contain printed or written in a size equal to at least ten-point bold
type:
(1) Either at the top of the contract or directly above the space reserved for the
signature of the buyer, the words "RETAIL INSTALLMENT CONTRACT".
(2) A specific statement that liability insurance coverage for bodily injury and
property damage caused to others is not included, if that is the case.
(3) The following notice: "NOTICE TO THE BUYER: 1. Do not sign this contract
before you read it or if it contains any blank space. 2. You are entitled to a
completely filled-in copy of this contract when you sign it. 3. Under the law,
you have the following rights, among others: (a) to pay off in advance the full
amount due and to obtain a partial refund of the finance charge; (b) to
redeem the property if repossessed for a default within the time provided by
law; (c) to require, under certain conditions, a resale of the property if
repossessed. 4. If you desire to pay off in advance the full amount due, the
amount of the refund you are entitled to, if any, will be furnished upon
request."
b. The seller shall deliver to the buyer a legible copy of the contract or any other
document the seller has required or requested the buyer to sign. Until the seller
does so, a buyer who has not received delivery of the personal property has an
unconditional right to cancel the contract and to receive immediate refund of all
payments made and redelivery of all goods traded in to the seller on account of or
in contemplation of the contract. Any acknowledgment by the buyer of delivery of
a copy of the contract must be printed or written in a size equal to at least
ten-point bold type and, if contained in the contract, must also appear directly
above the space reserved for the buyer's signature. The buyer's written
acknowledgment of delivery of a copy of a contract is conclusive proof of such
delivery and of compliance with this subdivision in any action or proceeding by or
against an assignee of the contract without knowledge to the contrary when the
assignee purchases the contract.
c. The contract must contain:
(1) 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 personal property including its make, year model,
model and identification numbers or marks, if any, and whether it is new or
used.
(2) The cash price of the personal property which is the subject matter of the
retail installment sale.
(3) 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.
(4) The difference between paragraphs 2 and 3, which is the unpaid balance of
cash price.
(5) The amount, if any, included for insurance, specifying the coverages.
(6) The amount, if any, of official fees.
(7) The amount financed, which is the sum of paragraphs 4, 5, and 6.
(8) The amount of the finance charge, if any.

(9) The total of payments, which is the sum of paragraphs 7 and 8, payable by
the buyer to the seller, the number of installments required, the amount of
each installment expressed in dollars, and the due date or period thereof.
(10) The deferred payment price, which is the sum of the amounts determined in
paragraphs 2, 5, 6, and 8.
(11) If any installment substantially exceeds in amount any prior installment other
than the downpayment, the following legend printed in at least ten-point bold
type or typewritten: "THIS CONTRACT IS NOT PAYABLE IN
INSTALLMENTS OF EQUAL AMOUNTS", followed, if there be but one
larger installment, by: "AN INSTALLMENT OF $_______ WILL BE DUE ON
_____", or, if there be more than one larger installment, by: "LARGER
INSTALLMENTS WILL BE DUE AS FOLLOWS: _____", in such latter case
inserting the amount of every larger installment and its due date.
(12) Any balloon payments. If any payment under a contract is more than twice
the amount of an otherwise regularly scheduled equal payment, the seller
shall identify the amount of such payment by the term "balloon payment".
The items need not be stated in the sequence or order set forth above; additional
items may be included to explain the calculations involved in determining the
amount to be paid by the buyer.
d. If the cost of any insurance is included in the contract and a separate charge is
made to the buyer for the insurance:
(1) The contract must state whether the insurance is to be procured by the
buyer or the seller.
(2) If the insurance is to be procured by the seller or holder, the seller or holder
shall within thirty days after execution of the retail installment contract send
or cause to be sent to the buyer a policy or policies or certificate of
insurance, written by an insurance company authorized to do business in
this state and sold by a licensed insurance agent.
If any such policy or certificate is canceled, the unearned insurance premium
refund received by the holder of the contract must be credited to the final
maturing installments of the retail installment contract except to the extent applied
toward payment for similar insurance protecting the interests of the buyer and
holder of the contract or either of them.
e. A contract may provide for the payment by the buyer of a delinquency and
collection charge on each installment in default for a period of more than ten days
in an amount equal to ten percent of the delinquent installment payment or ten
dollars, whichever is less; provided, that only one such delinquency and collection
charge may be collected on each installment in addition to interest accruing
thereon.
f. No retail installment contract may be signed by any party thereto when it contains
blank spaces to be filled in after it has been signed except that, if delivery of the
personal property is not made at the time of the execution of the contract, the
identifying numbers or marks of the property or similar information and the due
date of the first installment may be inserted in the contract after its execution.
3. If a retail installment sale is also subject to the Truth in Lending Act [15 U.S.C.
1601-1667e], the seller may, instead of complying with the disclosure requirements of
subsection 2, comply with all requirements of the Truth in Lending Act. A seller who
complies with the Truth in Lending Act still must comply with the provisions of this
section governing matters other than disclosure.
### § 51-13-02.1. Retail installment contracts - Prohibited provisions.

No contract may contain any provision by which:
1. In the absence of the buyer's default, the holder may, arbitrarily and without
reasonable cause, accelerate the maturity of any part or all of the time balance owing
thereunder.

2. A power of attorney is given to confess judgment in this state, or an assignment of
wages is given.
3. The buyer waives any claim for relief against the seller or holder of the contract, or
other person acting on the seller's or holder's behalf, for any illegal act committed in
the collection of payments under the contract or in the repossession of the personal
property.
4. The buyer executes a power of attorney appointing the seller or holder of the contract,
or other person acting on the seller's or holder's behalf, as the buyer's agent in
collection of payments under the contract or in the repossession of the personal
property.
5. The buyer relieves the seller from liability for any legal remedies which the buyer may
have against the seller under the contract or any separate instrument executed in
connection therewith.
6. The buyer may subsequently include the title to or a lien upon any goods, other than
the personal property which is the subject matter of the retail installment sale and any
accessories or special or auxiliary equipment used in connection therewith, or in
substitution, in whole or in part, for any thereof, as security for payment of the deferred
payment price.
### § 51-13-03. Finance charge limitation.

1. A retail seller may contract for in a retail installment contract and charge, receive, and
collect the finance charge computed on the principal balance of the contract or
obligation from the date thereof until paid. A retail seller who complies with the
disclosure provisions of this chapter is deemed a regulated lender under section
47-14-09.
2. The finance charge must be computed on the amount financed as determined under
subdivision c of subsection 2 of section 51-13-02. This finance charge may be
precomputed on the amount financed calculated on the assumption that all scheduled
payments will be paid when due and the effect of prepayment is governed by the
provisions on rebate upon prepayment.
3. When a retail installment contract provides for unequal or irregular installments, the
finance charge must be at the effective rate provided in subsection 1, having due
regard for the schedule of installments.
4. The finance charge must be inclusive of all charges incident to investigating and
making the contract, and for the extension of the credit provided for in the contract and
no fee, expense, or other charge whatsoever may be taken, received, reserved, or
contracted for except as provided in this section and in subdivision e of subsection 2 of
section 51-13-02 and for those items expressly provided for in the retail installment
contract as set forth in subdivision c of subsection 2 of section 51-13-02.
### § 51-13-03.1. Payment to last-known holder.

Unless the buyer has notice of actual or intended assignment of a retail installment contract,
payment made by the buyer to the last-known holder of the contract is binding upon all
subsequent holders or assignees.
### § 51-13-03.2. Statement of unpaid balance.

Upon written request from the buyer, the holder of a retail installment contract shall give or
forward to the buyer a written statement of the dates and amounts of payments and the total
amount unpaid under the contract. A buyer must be given a written receipt for any payment
when made in cash.
### § 51-13-04. Cancellation of contract.

After the payment of all sums for which the buyer is obligated under a retail installment
contract, and upon written demand made by the buyer, the holder of such contract shall mail to

the buyer at the buyer's last-known address, good and sufficient instruments to indicate
payment in full and to release all security in the personal property.
### § 51-13-05. Prepayment of retail installment contract.

1. At any time before maturity, a buyer may pay in full the remaining principal due on a
retail installment contract and is entitled to a refund of finance charges as follows:
a. The refund must be at least the finance charge paid in excess of that computed
under the simple interest method, using the annual percentage rate disclosed
under federal law to the nearest one-fourth of one percent.
b. For a retail installment contract in which the amount financed is not more than ten
thousand dollars, an acquisition cost of at most fifteen dollars may be deducted
from the refund.
c. For all retail installment contracts, a refund is not required if it is less than one
dollar.
2. Notwithstanding section 51-13-06.2, this section applies to retail installment contracts
for agricultural purposes and to retail installment contracts for more than twenty-five
thousand dollars.
### § 51-13-06. Refinancing retail installment contracts.

Repealed by S.L. 1981, ch. 498, § 2.
### § 51-13-06.1. Authority to purchase retail installment contracts.

Notwithstanding any contrary provision of law:
1. A financing agency may purchase a retail installment contract from a seller on such
terms and conditions and for such price as may be mutually agreed upon.
2. No filing of the assignment, no notice to the buyer of the assignment, and no
requirement that the seller be deprived of dominion over payments upon the contract
or over the personal property if repossessed by the seller, shall be necessary to the
validity of a written assignment of a retail installment contract as against creditors,
subsequent purchasers, pledgees, mortgagees, or encumbrancers of the seller.
### § 51-13-06.2. Applicability.

No provision of this chapter applies to a retail installment sale of personal property if:
1. The cash price of the personal property exceeds twenty-five thousand dollars; or
2. The personal property is to be used primarily for a business, commercial, or
agricultural purpose, not a personal, family, or household purpose.
### § 51-13-07. Enforcement - Powers - Remedies - Penalties.

Any person who willfully violates this chapter is guilty of a class A misdemeanor. A willful
violation of section 51-13-02 or 51-13-03 by any person bars that person's recovery of any
finance charge or delinquency or collection charge on the retail installment contract involved. A
state's attorney or the attorney general may enforce this chapter. The attorney general in
enforcing this chapter has all the powers provided in this chapter and chapter 51-15 and may
seek all remedies in this chapter and chapter 51-15. A violation of this chapter constitutes a
violation of chapter 51-15. The remedies, duties, prohibitions, and penalties of this chapter are
not exclusive and are in addition to all other causes of action, remedies, and penalties in
chapter 51-15, or otherwise provided by law.
### § 51-13-08. Waiver.

Any waiver of the provisions of this chapter is unenforceable and void.
