Retail Installment Sales

Del. Code tit. 6, ch. 43
in effect

Del. Code tit. 6, § 4301 Definitions.

Unless the context or subject matter otherwise requires, the definitions given in this section govern the construction of this chapter. (1) “Cash sale price” means the cash sale price stated in a retail installment contract for which the seller would sell or furnish to the buyer and the buyer would buy or obtain from the seller the goods or services which are the subject matter of a retail installment contract if the sale were a sale for cash instead of a retail installment sale. The cash sale price may include any taxes and cash sale prices for accessories and services, if any, included in a retail installment sale. (2) “Financing agency” means a person engaged in this State in whole or in part in the business of purchasing retail installment contracts, or installment accounts from 1 or more retail sellers. The term includes, but is not limited, to a bank, trust company, private banker, or investment company, if so engaged. (3) “Goods” mean tangible chattels bought for use primarily for personal, family or household purposes, as distinguished from commercial or agricultural purposes, including certificates or coupons exchangeable for such goods, and including goods which, at the time of the sale or subsequently are to be affixed to real property as to become a part of such real property whether or not severable therefrom, but does not include any motor vehicle which for the purposes of this chapter shall mean any device propelled or drawn by any power other than muscular power, in, upon, or by which any person or property is, or may be transported or drawn upon a highway. (4) “Holder” means the retail seller who acquires a retail installment contract or installment account executed, incurred or entered into by a retail buyer, or if the contract or installment account is purchased by a financing agency or other assignee, the financing agency or other assignee. The term does not include the pledgee of or the holder of a security interest in an aggregate number of such contracts or installment accounts to secure a bona fide loan thereon, unless the pledgee shall have perfected the pledgee’s rights after default by his or her pledgor. (5) “Official fees” means the fees required by law and actually to be paid to the appropriate public officer to perfect a lien or other security interest, on or in goods, retained or taken by a seller under a retail installment contract or installment account. (6) “Person” means an individual, partnership, corporation, association or other group, however organized. (7) “Retail buyer” or “buyer” means a person who buys goods or obtains services from a retail seller in a retail installment sale and not principally for the purpose of resale. (8) “Retail installment account” or “installment account” or “revolving account” means an account established by an agreement entered into in this State, pursuant to which the buyer promises to pay, in installments, to a retail seller, the outstanding balance incurred in retail installment sales, whether or not a security interest in the goods sold is retained by the seller, and which provides for a service charge which is expressed as a percent of the periodic balances to accrue thereafter providing such charge is not capitalized or stated as a dollar amount in such agreement and includes those accounts established with banks or others operating a credit card system pursuant to which a cardholder purchases goods or services from participating merchants and others. (9) “Retail installment contract” or “contract” means any contract for a retail installment sale between a buyer and seller, entered into or performed in this State, which provides for repayment in installments, whether or not such contract contains a title retention provision, and in which a time price differential is computed upon and added to the unpaid balance at the time of sale or where no time price differential is added but the goods or services are available at a lesser price if paid by cash. When taken or given in connection with a retail installment sale, the term includes but is not limited to a chattel mortgage, a conditional sales contract and a contract for the bailment or leasing of goods by which the bailee or lessee contracts to pay as compensation for their use a sum substantially equivalent to or in excess of their 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 goods upon full compliance with the terms of the contract. (10) “Retail installment sale” or “sale” means the sale of goods or the furnishing of services by a retail seller to a retail buyer for a time sale price payable in installments. (11) “Retail seller” or “seller” means a person engaged in the business of selling goods or furnishing services to retail buyers and, as used in subchapter IX of this chapter dealing with retail installment accounts, includes a bank or others operating a credit card system pursuant to which a cardholder purchases goods or services from participating merchants and others. (12) “Services” mean work, labor and services, for other than a commercial or business use, including services furnished in connection with the improvement of real property but does not include the services for which the tariffs, rates, charges, costs or expenses, including in each instance the time sale price, is required by law to be filed with the approval by the federal government or any official department, division, commission or agency of the United States. (13) “Time balance” means the total of the unpaid balance and the amount of the service charge, if any. (14) “Time price differential” or “service charge” means the amount however denominated or expressed which the retail buyer contracts to pay or pays for the privilege of purchasing goods or services 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. Wherever either of such terms is required to be used under the provisions of this chapter the other may be used interchangeably. (15) “Time sale price” means the total of the cash sale price of the goods or services, and the amounts, if any, included for insurance, official fees and service charge. (16) “Unpaid balance” means the cash sale price of the goods or services which are 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 down payment in money or goods.

Del. Code tit. 6, § 4302 Waiver prohibited; separability; transactions not covered.

(a) Any waiver of the buyer of this chapter shall be deemed contrary to public policy and shall be unenforceable and void. (b) If this chapter or the application thereof to any person or circumstances is held unconstitutional, the remainder of the chapter and the application of such provision to other persons or circumstances shall not be affected thereby. (c) Except as provided in § 4315 of this title, this chapter shall not apply to any retail installment sale which is made for a cash sale price of $75 or less, where no title, lien or other security interest is retained or taken by the seller. This section shall not apply to sales made pursuant to the provisions of §§ 4334-4343 of this title.

Del. Code tit. 6, § 4303 Date; size of printed type.

A retail installment contract shall be dated and in writing; the printed portion thereof shall be in at least 8-point type.

Del. Code tit. 6, § 4304 Contract to contain entire agreement; bold type headings; notice to buyer.

Every retail installment contract shall contain: (1) The entire agreement of the parties with respect to the cost and terms of payment for the goods and services, which terms of payment must coincide with those stated in any promissory notes or any other evidences of indebtedness between the parties relating to the transaction; (2) Either at the top of the contract or directly above the space reserved for the signature of the buyer, the words “conditional sale contract” or “lien contract,” as the case may be, shall appear in at least 10-point bold type where a security interest in the goods is retained or a lien on other goods or realty is obtained by the seller as security for the goods or services purchased. Either at the top of the contract or directly above the space reserved for the signature of the buyer, the words “retail installment contract” shall appear in at least 10-point bold type where security is not obtained by the seller for the goods or services purchased; (3) A notice in at least 8-point bold type reading as follows: “Notice to the buyer: (1) Do not sign this agreement before you read it or if it contains any blank space. (2) You are entitled to a completely filled-in copy of this agreement. (3) Under the law, you have the right to pay off in advance the full amount due and under certain conditions to obtain a partial refund of the service charge.”

Del. Code tit. 6, § 4305 Information required to be shown in contract.

(a) Except as provided in §§ 4327-4332 of this title, a contract shall contain the following: (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 goods or services sufficient to identify them. Services or multiple items of goods may be described in general terms and may be described in detail sufficient to identify them in a separate writing. (2) The cash sale price of the goods, services and accessories which are the subject matter of the retail installment sale. (3) The amount of the buyer’s down payment, 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 (a)(1) and (2) of this section. (5) The amount, if any, included for insurance, specifying the coverages and the cost of each type of coverage. (6) The amount, if any, of official fees. (7) The unpaid balance, which is the sum of paragraphs (a)(4), (5), and (6) of this section. (8) The amount of the service charge, if any. (9) The time balance, which is the sum of paragraphs (a)(7) and (8) of this section, 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 time sale price. (b) 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.

Del. Code tit. 6, § 4306 Blank spaces to be filled in before signing by buyer.

The seller shall not obtain the signature of the buyer to a contract when it contains blank spaces to be filled in after it has been signed.

Del. Code tit. 6, § 4307 Insurance; cost and procurance of; notice or copy of policy to be furnished to buyer.

If the cost of any insurance is included in the contract and a separate charge is made to the buyer for such insurance: (1) The contract shall state whether the insurance is to be procured by the buyer or the seller; (2) The amount included for the insurance shall not exceed the premiums chargeable in accordance with the rate fixed for such insurance by the insurer; (3) If the insurance is to be procured by the seller or holder, the seller or holder shall, within 45 days after delivery of the goods or furnishing of the services under the contract, deliver, mail or cause to be mailed to the buyer, at the seller’s or holder’s address as specified in the contract, a notice thereof or a copy of the policy or policies of insurance or a certificate or certificates of the insurance so procured.

Del. Code tit. 6, § 4308 Delinquency charges.

A contract may provide for the payment by the buyer of a delinquency charge on each installment in default for a period of not less than 10 days in an amount not in excess of 5 percent of such installment or $5.00, whichever is less, but a minimum charge of $1.00 may be made. Only 1 such delinquency charge may be collected on any such installment regardless of the period during which it remains in default. The contract may also provide for payment of any actual and reasonable costs of collection occasioned by removal of the goods from the State without written permission of the holder, or by the failure of the buyer to notify the holder of any change of residence, or by the failure of the buyer to communicate with the holder for a period of 45 days after any default in making payments due under the contract.

Del. Code tit. 6, § 4309 Copy of signed contract to be furnished to buyer; acknowledgment by buyer.

The seller shall deliver or mail to the buyer, at the address shown on the contract, a legible copy thereof completed, in accordance with the provisions of this chapter. Until the seller does so, the buyer shall be obligated to pay only the cash sale price. Any acknowledgment by the buyer of delivery of a copy of the contract shall be printed or written in a size equal to at least 10-point bold type and, if contained in the contract shall also appear directly above the space reserved for the buyer’s signature. The buyer’s written acknowledgement, conforming to the requirements of this section of delivery of a copy of a contract, shall be a conclusive presumption of such delivery and of compliance with this section and § 4306 of this title, in any action or proceeding by or against an assignee of the contract without knowledge to the contrary when the assignee purchases the contract.

Del. Code tit. 6, § 4310 Contracts made by mail or telephone without solicitation by salesperson.

Retail installment sales negotiated and entered into by mail or telephone without personal solicitation by a salesperson or other representative of the seller, where the seller’s cash and deferred payment prices and other terms are clearly set forth in a catalog or other printed solicitation of business which is generally available to the public, may be made as hereinafter provided. All the provisions of this chapter shall apply to such sales except that the seller shall not be required to deliver a copy of the contract to the buyer as provided in § 4309 of this title, and if, when the proposed retail installment sale contract is received by the seller from the buyer, there are blank spaces to be filled in, the seller may insert in the appropriate blank spaces the amounts of money and other terms which are set forth in the seller’s catalog which is then in effect. In lieu of the copy of the contract provided for in § 4309 of this title, the seller shall, within 15 days from the date of shipment of goods, furnish to the buyer a written statement of the items inserted in such blank spaces.

Del. Code tit. 6, § 4311 Provisions prohibited in contracts.

No contract or obligation shall contain any provision by which: (1) The buyer agrees not to assert against a seller a claim or defense arising out of the sale or agrees not to assert against an assignee such a claim or defense other than as provided in § 4312 of this title; (2) In the absence of the buyer’s default in the performance of any obligations, the holder may, arbitrarily and without reasonable cause, accelerate the maturity of any part or all of the amount owing thereunder; (3) The seller or holder of the contract or other person acting as agent is given authority to enter upon the buyer’s premises unlawfully or to commit any breach of the peace in the repossession of goods; (4) The buyer waives any right of action against the seller or holder of the contract or other person acting as agent, for any illegal act committed in the collection of payments under the contract or in the repossession of goods; (5) The buyer executes a power of attorney appointing the seller or holder of the contract, or other person acting as agent, as the buyer’s agent in the repossession of goods; (6) 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.

Del. Code tit. 6, § 4312 Assignment of contract; notice to buyer.

No right of action or defense arising out of a retail installment sale which the buyer has against the seller, and which would be cut off by assignment, shall be cut off by assignment of the contract to any third party whether or not the third party acquires the contract in good faith and for value unless the assignee given notice of the assignment to the buyer as provided in this section and within 15 days of the mailing of such notice receives no written notice of the facts giving rise to the claim or defense of the buyer, or unless the assignee acquires the contract or evidence of indebtedness relying in good faith upon a certificate of completion or certificate of satisfaction signed by the buyer. A notice of assignment shall be in writing addressed to the buyer at the address shown on the contract and shall identify the contract and state that the buyer must, within 15 days of the date of mailing of such notice, notify the assignee in writing of any facts giving rise to a claim or defense which the buyer may have. The notice of assignment shall state the name of the seller and buyer, a description of the goods and services, the time balance and the number and amounts of the installments. If a certificate of completion or satisfaction is relied upon, the following notation must appear at the top thereof in at least 10 point bold type: “Notice to Buyer — Do Not Sign this certificate until all services have been satisfactorily performed and materials supplied or goods received and found satisfactory.”

Del. Code tit. 6, § 4313 Prohibition of lien on goods fully paid for.

No contract other than 1 for services shall provide for a lien on any goods theretofore fully paid for or which have not been sold by the seller.

Del. Code tit. 6, § 4314 Prohibited provisions in contract as void.

Any provision in a contract which is prohibited by this chapter shall be void but shall not otherwise affect the validity of the contract.

Del. Code tit. 6, § 4315 Service charges authorized; calculation.

A retail seller or the holder of a retail installment contract may charge and collect a service charge in respect of a retail installment sale and may calculate such service charge in the manner and at the rate or rates specified in the contract governing the sale.

Del. Code tit. 6, § 4316 Period of installment payments.

Contracts may be payable in successive monthly, semimonthly or weekly installments.

Del. Code tit. 6, § 4317 Charges included in contract service charge; additional charges prohibited.

The service charge shall 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 shall be taken, received, reserved or contracted for except as otherwise provided in this chapter.

Del. Code tit. 6, § 4319 Splitting or dividing of sales transactions prohibited.

Repealed by 63 Del. Laws, c. 2, § 16, eff. June 1, 1981.

Del. Code tit. 6, § 4320 Payment to last known holder as discharge of buyer in absence of notice of assignment.

Unless the buyer has notice of actual or intended assignment of a contract or installment account, payment thereunder made by the buyer to the last known holder of such contract or installment account, shall to the extent of the payment, discharge the buyer’s obligation.

Del. Code tit. 6, § 4321 Periodic statements of account.

At any time after its execution, but not later than 1 year after the last payment made thereunder, the holder of a contract shall, upon written request of the buyer made in good faith, promptly give or forward to the buyer a detailed written statement which will state with accuracy the total amount, if any, unpaid thereunder. Such a statement shall be supplied by the holder once each year without charge; if any additional statement is requested by the buyer, the holder shall supply such statement to the buyer at a charge not exceeding $1.00 for each additional statement supplied to the buyer. The provisions of this section shall not apply to those transactions wherein, instead of periodic statements of account, the buyer is provided with a passbook, payment book or coupon book in which all payment, credits, charges and the unpaid balance are indicated.

Del. Code tit. 6, § 4322 Prepayment; refund of service charge.

(a) A buyer may prepay the debt due under a retail installment contract in full at any time. (b) If the service charge imposed pursuant to § 4315 of this title in respect of a retail installment sale has been precomputed and taken in advance, then, in the event of prepayment of the entire indebtedness, the holder shall refund to such buyer the unearned portion of the precomputed service charge. This refund shall be in an amount not less than the amount which would be refunded if the unearned precomputed service charge were calculated in accordance with the actuarial method, except that the buyer shall not be entitled to a refund which is less than $1.00. The unearned portion of the precomputed service charge is, at the option of the holder, either: (1) That portion of the precomputed service charge which is allocable to all originally scheduled or, if deferred, all deferred payment periods, or portions thereof, ending subsequent to the date of prepayment. The unearned precomputed service charge is the total of that which would have been earned for each such period, or portion thereof, had the debt due under the retail installment contract not been precomputed, by applying to unpaid balances, according to the actuarial method, an annual percentage rate based on the precomputed service charge, assuming that all payments were made as scheduled, or as deferred, if deferred. The holder, at its option, may round this annual percentage rate to the nearest 1 / 4 of 1 percent; or (2) The total precomputed service charge less the earned precomputed service charge. The earned precomputed service charge shall be determined by applying an annual percentage rate based on the total precomputed service charge, under the actuarial method, to the unpaid balances for the actual time those balances were unpaid up to the date of prepayment. (c) As used in subsection (b) of this section: (1) “Actuarial method” means the method of allocating payments made on a debt due under a retail installment contract between the outstanding balance of the indebtedness and the service charge pursuant to which a payment is applied first to the accumulated service charge and any remainder is subtracted from the outstanding balance of the indebtedness. (2) “Payment period” means the time period within which periodic installment payments of the indebtedness are due under the terms of a retail installment contract. (d) If a charge was made to a buyer for premiums for insuring such buyer in respect of a retail installment contract, then, in the event of prepayment, the holder shall refund to such buyer the excess of the charge to such buyer therefor over the premiums paid or payable to the holder, if such premiums were paid or payable by the holder periodically, or the refund for such insurance premium received or receivable by the holder if such premium was paid or payable in a lump sum by the holder, provided that no such refund shall be required if it amounts to less than $1.00. (e) In connection with any prepayment of a debt due under a retail installment contract, a holder may not impose any prepayment charge.

Del. Code tit. 6, § 4323 Acknowledgment of payment in full; release of security in goods.

After the payment of all sums for which the buyer is obligated under a contract and upon demand made by the buyer, the holder shall deliver, or mail to the buyer’s last known address, such 1 or more good and sufficient instruments as may be necessary to acknowledge payment in full and to release all security in the goods under such contract.

Del. Code tit. 6, § 4324 Deferred payments; charges.

A holder may at any time or from time to time permit a buyer to defer installment payments due under the terms of a retail installment contract and may, in connection with such deferral, charge and collect deferral charges and may also require payment by such buyer of the additional cost to the holder of premiums for continuing in force, until the end of such period of deferral, any insurance coverage provided in connection with the contract.

Del. Code tit. 6, § 4325 Refinancing of unpaid balance; charges; agreement for refinancing.

The holder of a retail installment contract or contracts may, upon agreement in writing with the buyer, refinance the payment of the unpaid time balance or balances of the contract or contracts by providing for a new schedule of installment payments. The holder may charge and contract for the payment of a refinance charge by the buyer and collect and receive the same, but such refinance charge: (1) Shall be based upon the amount refinanced, plus any additional cost of insurance and of official fees incident to such refinancing, after the deduction of a refund credit in an amount equal to that to which the buyer would have been entitled under § 4322 of this title, if the buyer has prepaid in full the buyer’s obligations under the contract or contracts, but in computing such refund credit there shall not be allowed the minimum earned service charge as authorized by such section, and (2) May not exceed the rate of service charge provided under §§ 4315-4317 of this title. Such agreement for refinancing may also provide for the payment by the buyer of the additional cost to the holder of the contract or contracts of premiums for continuing in force, until the maturity of the contract or contracts as refinanced, any insurance coverages provided for therein, subject to § 4305 of this title. The refinancing agreement shall set forth the amount of the unpaid time balance or balances to be refinanced, the amount of any refund credit, the amount to be refinanced after the deduction of the refund credit, the amount of the service charge under the refinancing agreement, any additional cost of insurance and of official fees to the buyer, the new unpaid time balance and the new schedule of installment payments. Where there is a consolidation of 2 or more contracts then §§ 4327 and 4328 of this title shall apply.

Del. Code tit. 6, § 4326 Default in payment of certain installments; buyer entitled to new payment schedule.

In the event a contract provides for the payment of any installment which is more than double the amount of the average of the preceding installment, the buyer, upon default of this installment, shall be given an absolute right to obtain a new payment schedule. Unless agreed to by the buyer, the periodic payments under the new schedule shall not be substantially greater than the average of the preceding installments.

Del. Code tit. 6, § 4327 Addition of subsequent purchases to contract.

A retail installment contract which otherwise conforms to the requirements of this chapter, may contain the provision that the seller may at the seller’s 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 service 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 time sale price under the previous contract or contracts is fully paid.

Del. Code tit. 6, § 4328 Allocation of payments made subsequent to add-on purchases.

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 time sale price or time sale prices. Each payment thereafter received shall be deemed to be allocated to all of the various time sale 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 rate, to the previous time sale price, and an amount equal to the increase, to the subsequent time sale price. However, the amount of any initial or down payment on the subsequent purchase shall be deemed to be allocated in its entirety to such purchase.

Del. Code tit. 6, § 4329 Memorandum on subsequent purchases to be furnished to buyer.

(a) When a subsequent purchase 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: (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 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. (2) The cash sale price of the goods, services and accessories which are the subject matter of the new retail installment sale. (3) The amount of the buyer’s down payment, 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 (a)(2) and (a)(3) of this section. (5) The amount, if any, included for insurance, specifying the coverages and the cost of each type of coverage. (6) The amount, if any, of official fees. (7) The unpaid balance, which is the sum of paragraphs (a)(4), (5) and (6) of this section. (8) The unpaid time balance of the prior contract or contracts. (9) The new unpaid balance, which is the sum of paragraphs (a)(7) and (8) of this section. (10) The amount of the service charge computed in conformity with § 4315 of this title. (11) The consolidated time balance, which is the sum of paragraphs (a)(9) and (10) of this section, 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. (b) 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 amounts to be paid by the buyer. (c) This memorandum shall contain the statement that the seller is adding the subsequent purchase to the buyer’s existing contract in accordance with the provisions thereof.

Del. Code tit. 6, § 4330 Obligation of buyer in absence of memorandum.

Until the seller delivers to the buyer the memorandum as provided in § 4329 of this title, the buyer shall be obligated to pay only the cash sale price of the subsequent purchase.

Del. Code tit. 6, § 4331 Service charge on consolidated time balance.

Subject to the other provisions of §§ 4315-4317 of this title, the service charge to be included in a consolidated time balance shall be determined by applying the service charge at the applicable rate specified in that article to either: (1) The total of the unpaid balance of the subsequent contract and the unpaid balance of any previous contract included in the consolidated total determined by deducting from the then unpaid time balance thereof any then unearned service charge in an amount not less than the refund credit for anticipation in §§ 4320-4323 of this title (computed, however, without the allowance of any minimum earned service charge), for the period from the date thereof to and including the date when the final installment of such consolidated total is payable; or (2) The principal balance of the subsequent contract for the period from the date thereof to and including the date when the final installment of such consolidated total is payable and, if the due date of the final installment of such consolidated total is later than the due date of the final installment of any previous contract included in the consolidated total, on the time balance then unpaid on such previous contract from the date when the final installment thereof was payable to the date when the final installment of such consolidated total is payable.

Del. Code tit. 6, § 4332 Minimum service charge in add-on transactions.

The minimum service charge as provided in paragraph (3) [repealed] of § 4315 of this title may be used but once in any series of add-on transactions.

Del. Code tit. 6, § 4333 Purchase of contract by financing agency authorized; notice of assignment not required.

Notwithstanding any contrary provision of this title, a financing agency may purchase a retail installment contract or installment account from a seller on such terms and conditions and for such price as may be mutually agreed upon. No filing of notice or 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 installment account or over the goods if repossessed by the seller, shall be necessary to the validity of a written assignment of a contract or installment account as against creditors, subsequent purchasers, pledgees, mortgagees or encumbrancers of the seller, except as may otherwise be required by law.

Del. Code tit. 6, § 4334 Establishment of retail installment account authorized; statement of service charges to be furnished to buyer.

A retail installment account may be established by the seller upon the request of a buyer or prospective buyer. The statement that “service charges not in excess of those permitted by law will be charged on the outstanding balances from month to month” shall be printed in type no smaller than 8 points in every application form used by the seller and shall be stated to the applicant when such installment accounts are negotiated by telephone.

Del. Code tit. 6, § 4335 Confirmation of account by seller; contents; proof of mailing.

(a) At the time a seller accepts the credit of the buyer and establishes a retail installment account for that buyer’s use, the seller shall confirm this fact to the buyer in writing. Such confirmation shall contain a clear and understandable statement of the rates of service charge, without regard to the variations contained in § 4337 of this title, which will be collected from the buyer, but may contain the clause that such rates are subject to change if permitted by law. This confirmation shall also contain a legend that the buyer may at any time pay the entire balance. (b) The confirmation shall be in type no smaller than elite typewriter characters. (c) If no copy of the confirmation is retained by the seller, a notation in the permanent record showing that such confirmation was mailed, and the date of mailing, shall serve as prima facie evidence of such mailing.

Del. Code tit. 6, § 4336 Display of service charge rates by seller.

Each retail seller, before the retail seller can benefit from the service charges permitted by this subchapter, shall display prominently in the retail seller’s main place of business and in each branch thereof, a statement outlining the service charge rates which will conform to § 4337 of this title.

Del. Code tit. 6, § 4337 Service charge.

Subject to the other provisions of this subchapter a retail seller or the holder of a retail installment account may charge and collect a service charge computed on the outstanding unpaid indebtedness in a buyer’s retail installment account and may calculate such service charge in the manner and at such daily, weekly, monthly, annual or other periodic percentage rate or rates as the agreement governing retail installment account provides; provided, however, that if the service charge as so computed is less than $1.00 for any month, the holder may charge $1.00 as a service charge for such month. If the applicable periodic percentage rate under the agreement governing a retail installment account is other than daily, the service charge may be calculated on an amount not in excess of the average of outstanding unpaid indebtedness for the applicable billing period, determined by dividing the total of the amounts of outstanding unpaid indebtedness for each day in the applicable billing period by the number of days in the billing period. If the applicable periodic percentage rate under the agreement governing the retail installment account is monthly, a billing period shall be deemed to be a month or monthly if the last day of each billing period is on the same day of each month or does not vary by more than 4 days therefrom.

Del. Code tit. 6, § 4338 Monthly statement of account.

(a) The seller or holder of a retail installment account shall promptly provide the buyer with a statement as of the end of each monthly period (which need not be a calendar month) setting forth the following: (1) The balance due to the seller or holder from the buyer at the beginning of the monthly period; (2) The dollar amount of each purchase by the buyer during the monthly period and (unless a sales slip or memorandum of each purchase has previously been furnished the buyer or is attached to the statement), the purchase or posting date, a brief description and the cash price of each purchase; (3) The payments made by the buyer to the seller or holder and any other credits to the buyer during the monthly period; (4) The amount of the service charge; (5) The total balance in the account at the end of the monthly period; (6) A legend to the effect that the buyer may at any time pay the total balance. (b) 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.

Del. Code tit. 6, § 4339 Charges included in installment account service charge; additional charges prohibited.

The service charge shall include all charges incident to investigating and making the retail installment account. No fee, expense, delinquency, collection or other charge whatsoever shall be taken, received, reserved or contracted by the seller or holder of a retail installment account except as provided in this section. A seller may, however, in an agreement which is signed by the buyer and of which a copy is given or furnished to the buyer provide for the payment of attorney’s fees and costs in conformity with § 4345 of this title.

Del. Code tit. 6, § 4340 Insurance; cost and procurance of.

If the cost of any insurance is to be separately charged to the buyer, there shall be an agreement to that effect, signed by both the buyer and the seller, a copy of which shall be given or furnished to the buyer. Such agreement shall state whether the insurance is to be procured by the buyer or the seller or holder. If the insurance is to be procured by the seller or holder, the seller or holder shall comply with the provisions of § 4307 of this title.

Del. Code tit. 6, § 4341 Security interest of seller in goods.

Nothing in this subchapter prohibits the execution of an agreement between a buyer and seller whereby the seller retains a security interest in goods sold to the buyer until full payment therefor has been made. Section 4328 of this title shall apply to goods sold under such an agreement.

Del. Code tit. 6, § 4342 Notes cutting off buyer’s right of action or defense against seller prohibited.

No retail installment account shall require or entail the execution of any note or series of notes by the buyer which, when separately negotiated, will cut off as to third parties, any right of action or defense which the buyer may have against the seller.

Del. Code tit. 6, § 4343 Application of other sections to retail installment accounts.

The provisions of §§ 4320 and 4323 of this title shall apply to retail installment accounts.

Del. Code tit. 6, § 4344 Award of reasonable attorney’s fees and court costs to prevailing party.

A contract or installment account may provide for the payment of reasonable attorney’s fees and actual court costs if it is referred to an attorney for collection. Reasonable attorney’s fees and costs shall be awarded to the prevailing party in any action on a contract or installment account subject to the provisions of this chapter regardless of whether such action is instituted by the seller, holder, or buyer. Where the defendant alleges in an answer that the defendant tendered to the plaintiff the full amount to which the plaintiff was entitled, and thereupon deposits in court, for the plaintiff, the amount so tendered, and the allegation is found to be true, then the defendant is deemed to be a prevailing party within the meaning of this section.

Del. Code tit. 6, § 4345 Limited exemption of salary or wages.

In addition to any existing exemption under any other provisions of law, the salary or wages of a defendant are exempt from attachment for a period of 60 days from the date of default of the contract or installment account for any claim arising out of a contract or installment account subject to the provisions of this title.

Del. Code tit. 6, § 4346 Remedies available to holder on default of buyer.

In the event of any default by the buyer in the performance of obligations under a contract or installment account, the holder, pursuant to any rights granted therein, may proceed to recover judgment for the balance due without retaking the goods, or the holder may retake the goods and proceed as provided for in Article 9 of Subtitle I of this title.

Del. Code tit. 6, § 4347 Violation as misdemeanor.

Any person who shall wilfully violate this chapter shall be guilty of a misdemeanor.

Del. Code tit. 6, § 4348 Knowledge by assignee of noncompliance with chapter as barring recovery of charges; recovery by buyer of charges paid.

In case of failure by any person to comply with the provisions of this chapter, such person or any person who acquires a contract or installment account with knowledge of such noncompliance is barred from recovery of any time price differential or service charge or of any delinquency, collection, extension, deferral or refinance charge imposed in connection with such contract or installment account and the buyer shall have the right to recover from such person an amount equal to any of such charges paid by the buyer.

Del. Code tit. 6, § 4349 Correction of failure of compliance with chapter.

Notwithstanding the provisions of this subchapter, any failure to comply with any provision of this chapter may be corrected within 10 days after the holder notices such failure or is notified thereof in writing by the buyer and, if so corrected, neither the seller nor the holder shall be subject to any penalty under this subchapter.

Del. Code tit. 6, § 4350 Wilful violations in connection with consolidated contracts as barring recovery of charges; recovery by buyer of charges paid.

Section 4349 of this title shall not apply to any person who wilfully violates any provision of this chapter in connection with the imposition, computation or disclosures of or relating to a time price differential or service charge on a consolidated total of 2 or more contracts under §§ 4327-4332 of this title, and the buyer may recover from such person an amount equal to 3 times the total of the time price differentials or service charges and any delinquency, collection, extension, deferral or refinance charges imposed, contracted for or received on all contracts included in the consolidated total and the seller shall be barred from the recovery of any such charges.

Del. Code tit. 6, § 4351 Disclosure requirements.

Notwithstanding any other provision of this chapter to the contrary, disclosures made in the terminology of the Truth in Lending Act, as amended, [15 U.S.C. § 1601 et seq.], and regulations prescribed thereunder, shall be deemed to comply with comparable, but literally inconsistent disclosure requirements of this chapter; provided, however, that any charges otherwise authorized under this chapter may be contracted for and collected in amounts and at rates consistent with the provisions of this chapter without regard to any inconsistent terminology of said Truth in Lending Act and this chapter.
Source: DE Code (Official Site)URL: https://delcode.delaware.gov/title6/c043/sc01/index.htmlFetched: 10/4/2026