A retail installment contract allows consumers to pay for a product or service over a period of time in fixed monthly installments. There are federal and individual state laws that regulate retail installment contracts.
Retail installment contracts include: health or country club memberships, cosmetic or elective medical procedures, jewelry purchases, and dating service memberships.
Generally, for a retail installment contract to be legally binding, the following terms and conditions must be included:
- Total amount due
- Interest rate
- Duration of contract
- Amount of monthly payment
- Fees, such as late fees or payoff charges
- Down payment received
- Cancellation or refund clauses, if applicable
If you are a consumer who entered into a retail installment contract which you believe is unfair or illegal, or you are a retailer wishing to draft a retail installment contract, a contract attorney experienced in consumer credit can review the document and advise you of the laws in your area.