CHAPTER 342

AN ACT TO AMEND TITLE 6 DELAWARE CODE ENTITLED "COMMERCE AND TRADE" BY PROVIDING FOR A NEW CHAPTER 43 RELATING TO RETAIL INSTALLMENT SALES.

Be it enacted by the General Assembly of the State of Delaware:

Section 1. Title 6, Delaware Code is hereby amended by adding thereto a new Chapter 43 to read as follows:

CHAPTER 43 RETAIL INSTALLMENT SALES

Sub-Chapter I--General Provisions

Section 4301. Unless the context or subject matter otherwise requires, the definitions given in this article govern the construction of this chapter.

"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 act 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.

"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.

"Retail seller" or "seller" means a person engaged in the business of selling goods or furnishing services to retail buyers.

"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.

"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.

"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.

"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, his 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.

"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.

"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.

"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.

"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.

"Time balance" means the total of the unpaid balance and the amount of the service charge, if any.

"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 his pledgee's rights after default by his pledger.

"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.

"Person" means an individual, partnership, corporation, association or other group, however organized.

"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 one or more retail sellers. The term includes but is not limited to a bank, trust company, private banker, or investment company, if so engaged.

Section 4302. Any waiver of the buyer of the provisions of this chapter shall be deemed contrary to public policy and shall be unenforceable and void.

If any provision of 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.

Except as provided in Section 4315, the provisions of this chapter shall not apply to any retail installment sale which is made for a cash sale price of seventy-five dollars ($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 Sections 4334-4343 of this chapter.

Sub-Chapter II--Provisions of Retail Installment Contracts

Section 4303. A retail installment contract shall be dated and in writing; the printed portion thereof shall be in at least eight-point type.

Section 4304. Every retail installment contract shall contain:

(a) 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.

(b) 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 ten-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 ten-point bold type where security is not obtained by the seller for the goods or services purchased.

(c) A notice in at least eight-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."

Section 4305. Except as provided in Sections 4327-4332 of this chapter, a contract shall contain 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 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.

(b) The cash sale price of the goods, services and accessories which are the subject matter of the retail installment sale.

(c) 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.

(d) The difference between item (b) and item (c).

(e) The amount, if any, included for insurance, specifying the coverages and the cost of each type of coverage.

(f) The amount, if any, of official fees.

(g) The unpaid balance, which is the sum of items (d), (e), and (f).

(h) The amount of the service charge, if any.

() The time balance, which is the sum of items (g) and (h), 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.

(d) The time sale price.

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.

Section 4306. 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.

Section 4307. If the cost of any insurance is included in the contract and a separate charge is made to the buyer for such insurance:

(a) The contract shall state whether the insurance is to be procured by the buyer or the seller.

(b) The amount, included for the insurance, shall not exceed the premiums chargeable in accordance with rate fixed for such insurance by the insurer.

(c) If the insurance is to be procured by the seller or holder, he 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 his 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.

Section 4308. 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 five dollars ($5.00), whichever is less, but a minimum charge of one dollar ($1.00) may be made. Only one 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.

Section 4309. The seller shall deliver to the buyer, or mail to him, at his 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 ten-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 acknowledgment, 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 Section 4306, in any action of proceeding by or against an assignee of the contract without knowledge to the contrary when he purchases the contract.

Section 4310. Retail installment sale negotiated and entered into by mail or telephone without personal solicitation by a salesman 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 Section 4309, 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 Section 4309, 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.

Sub-Chapter III--Restrictions on Retail Installment Contracts

Section 4311. No contract or obligation shall contain any provision by which:

(a) 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 Section 4312.

(b) In the absence of the buyer's default in the performance of any of his obligations, the holder may, arbitrarily and without reasonable cause, accelerate the maturity of any part or all of the amount owing thereunder.

(c) The seller or holder of the contract or other person acting on his behalf is given authority to enter upon the buyer's premises unlawfully or to commit any breach of the peace in the reposession of goods.

(d) The buyer waives any right of action against the seller or holder of the contract or other person acting on his behalf, for any illegal act committed in the collection of payments under the contract or in the repossession of goods.

(e) The buyer executes a power of attorney appointing the seller or holder of the contract, or other person acting on his behalf, as the buyer's agent in the repossession of goods.

(f) 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.

Section 4312. 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 he 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 inform the buyer that he 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 he 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."

Section 4313. No contract other than one for services shall provide for a lien on any goods theretofore fully paid for or which have not been sold by the seller.

Section 4314. Any provision in a contract which is prohibited by this chapter shall be void but shall not otherwise affect the validity of the contract.

Sub-Chapter IV--Service Charge Limitations

Section 4315. A seller may, in a retail installment contract, contract for, and if so contracted for, the holder thereof may charge, receive and collect a service charge which shall not exceed the following rates multiplied by the number of months, including any fraction in excess of more than 15 days as one month, elapsing between the date of such contract and the due date of the last installment:

(a) On so much of the unpaid balance as does not exceed one thousand dollars ($1,000.00), five-sixths of 1 percent.

(b) If the unpaid balance exceeds one thousand dollars ($1,000.00), on so much of the unpaid balance as exceeds one thousand dollars ($1,000.00), two-thirds of 1 percent.

(c) Twelve dollars ($12.00) if the service charge so computed is less than twelve dollars ($12.00), but if the due date of the last installment of the contract is eight months or less after its effective date, ten dollars ($10.00).

Section 4316. Contracts may be payable in successive monthly, semi-monthly or weekly installments.

Section 4317. When a retail installment contract provides for unequal or irregular installments, the service charge shall be at the effective rate provided for in Section 4315 having due regard for the schedule of installments.

Section 4318. 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.

Section 4319. No seller shall induce or permit any buyer to split up or divide any sales transaction for the purpose of contracting for or receiving a higher rate of time price differential than would otherwise be permitted by this article or to obtain the exemption permitted by Section 4302 of this chapter.

Sub-Chapter V--Payments

Section 4320. 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.

Section 4321. At any time after its execution, but not later than one 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 one dollar ($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.

Section 4322. Notwithstanding the provisions of any contract to the contrary, any buyer may pay the contract in full at any time before maturity and in so paying it shall receive a refund credit thereon for such anticipation. The amount of any such refund credit shall be determined by the "sum of digits" method and shall represent at least as great a proportion of the service charge or, if the contract has been extended, deferred or refinanced, of the additional charge therefor, as the sum of the periodic monthly time balances not yet due bears to the sum of all the periodic monthly time balances under the schedule of installments in the contract or, if the contract has been extended, deferred or refinanced, as so extended, deferred or refinanced. Where the amount of the credit for anticipation of payment is less than one dollar ($1.00) no refund need be made. Where the earned service charge amounts to less than the minimum service charge, there may be retained an amount equal to the minimum service charge applicable under Section 4315 (c).

Section 4323. 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 at his last known address, such one 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.

Sub-Chapter VI--Refinancing and Consolidation

Section 4324. The holder of a retail installment contract may, upon agreement with the buyer, extend the scheduled due date or defer the scheduled payment of all or of any part of any installment or installments payable thereunder. The holder may charge and contract for the payment of an extension or deferral charge by the buyer and collect and receive the same, but such charge may not exceed an amount equal to 1 percent per month simple interest on the amount of the installment or installments, or part thereof, extended or deferred for the period of extension or deferral. Such period shall not exceed the period from the date when such extended or deferred installment, or part thereof would have been payable in the absence of such extension or deferral, to the date when such installment or installments, or part thereof, are made payable under the agreement of extension or deferment; except that a minimum charge of one dollar ($1.00) for the period of extension or deferral charge, be made in any case where the extension or deferral charge, when computed at such rate, amounts to less than one dollar ($1.00). Such agreement may also provide for the payment by the buyer of the additional cost to the holder of the contract or premiums for continuing in force, until the end of such period of extension or deferral, any insurance coverages provided for in the contract, subject to the provisions of Section 4305.

Section 4325. 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 Section 4322 if he has prepaid in full his 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 Section 4315-4319 of this chapter. 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 the provisions of Section 4305. 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 two or more contracts then the provisions of Section 4327 and 4328 shall apply.

Section 4326. 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.

Sub-Chapter VII--Add-On Sales

Section 4327. 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 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.

Section 4328. 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.

Section 4329. 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:

(d) 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.

(e) The cash sale price of the goods, services and accessories which are the subject matter of the new retail installment sale.

(f) 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.

(g) The difference between item (b) and item (c).

(h) The amount, if any, included for insurance, specifying the coverages and the cost of each type of coverage.

(f) The amount, if any, of official fees.

(g) The unpaid balance, which is the sum of items (d), (e) and (f).

(h) The unpaid time balance of the prior contract or contracts.

(i) The new unpaid balance, which is the sum of items (g) and (h).

(j) The amount of the service charge computed in conformity with Section 4315.

(k) The consolidated time balance, which is the sum of items (i) and (j), payable by the buyer to the seller, the number of installments required, the amount of each installment expressed in dollars and the due date of period thereof.

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.

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.

Section 4330. Until the seller delivers to the buyer the memorandum as provided in Section 4329, the buyer shall be obligated to pay only the cash sale price of the subsequent purchase.

Section 4331. Subject to the other provisions of Section 4315-4319, 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:

(a) 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 provided for in Section 4320-4323 of this chapter (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

(b) 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.

Section 4332. The minimum service charge as provided in sub-section (c) of Section 4315 may be used but once in any series of add-on transactions.

Sub-Chapter VIII--Terms of Purchase by Financing Agency

Section 4333. 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 encumbrances of the seller, except as may otherwise be required by law.

Sub-Chapter IX--Retail Installment Accounts

Section 4334. 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 eight-point in every application form used by the seller and shall be stated to the applicant when such installment accounts are negotiated by telephone.

Section 4335. At the time a seller accepts the credit of the buyer and establishes a retail installment account for his 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 Section 4337, 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 his entire balance.

(a) The confirmation shall be in type no smaller than elite typewriter characters.

(b) If no copy of the confirmation is retained by the seller, a notation in his permanent record showing that such confirmation was mailed, and the date of mailing, shall serve as prima facie evidence of such mailing.

Section 4336. Each retail seller, before he can avail himself of the service charges permitted by this article, shall display prominently in his main place of business and in each branch thereof, a statement outlining the service charge rates which will conform to Section 4337 of this chapter.

Section 4337. Subject to the other provisions of this article the seller or holder of a retail installment account may charge, receive and collect the service charge authorized by this chapter. The service charge shall not exceed the following rates computed on the outstanding balances from month to month:

(c) On so much of the outstanding balance as does not exceed one thousand dollars ($1,000.00) 13/2 percent per month.

(d) If the outstanding balance is more than one thousand dollars ($1,000.00), 1 percent per month on the excess over one thousand dollars ($1,000.00) of the outstanding balance.

(c) If the service charge so computed is less than one dollar ($1.00) for any month, one dollar ($1.00).

(d) The service charge may be computed on a schedule of fixed amounts if as so computed it is applied to all amounts of outstanding balances equal to the fixed amount minus a differential of not more than five dollars ($5.00), provided that it is also applied to all amounts of outstanding balances equal to the fixed amount plus at least the same differential.

Section 4338. 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:

(a) The balance due to the seller or holder from the buyer at the beginning of the monthly period.

(b) 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.

(c) The payments made by the buyer to the seller or holder and any other credits to the buyer during the monthly period.

(d) The amount of the service charge.

(e) The total balance in the account at the end of the monthly period.

(f) A legend to the effect that the buyer may at any time pay his total balance.

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.

Section 4339. 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 Section 4345 of this chapter.

Section 4340. If the cost of any insurance is to be separately charged to the buyer, there shall be an agreement to this 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 Section 4307.

Section 4341. Nothing in this article 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. The provisions of Section 4328 are applicable to goods sold under such an agreement.

Section 4342. 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.

Section 4343. The provisions of Section 4320 and 4323 shall be applicable to retail installment accounts.

Sub-Chapter X--Attorney's Fees and Court Costs

Section 4344. 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 his answer that he tendered to the plaintiff the full amount to which he 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 article:

Sub-Chapter XI--Attachment

Section 4345. 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 chapter.

Sub-Chapter XII--Repossession and Resale

Section 4346. In the event of any default by the buyer in the performance of his 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 he may retake the goods and proceed as provided for in Title 6, Chapter 9, Delaware Code Annotated.

Sub-Chapter XIII--Penalties

Section 4347. Any person who shall willfully violate any provision of this chapter shall be guilty of a misdemeanor.

Section 4348. 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.

Section 4349. 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 article.

Section 4350. Section 4349 shall not apply to any person who willfully 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 two or more contracts under the provisions of Section 43274332 of this chapter, and the buyer may recover from such person an amount equal to three 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.

Section 4351. This Act shall become effective one hundred twenty (120) days after the date of its passage and approval.

Approved July 9, 1960.