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vehicle without your written permission. If I do sell or transfer
the motor vehicle, this will not release me from my obligations under
this contract, and you may charge me a transfer of equity fee of $25
($50 for a heavy commercial vehicle). I will promptly tell you in
writing if I change my address or the address where I keep the motor
vehicle. I will not remove the motor vehicle (Optional: motor vehicle
or other collateral) from Texas for more than 30 days unless I first
get your written permission."
(33) Care of motor vehicle. The contract may obligate
the buyer to keep the motor vehicle free of liens and encumbrances,
require the buyer to keep the motor vehicle in good working order
and repair, or prohibit the buyer from allowing the motor vehicle
to be exposed to seizure, confiscation, or other involuntary transfer.
The model clause regarding care of the motor vehicle reads: "I agree
to keep the motor vehicle free from all liens and claims except those
that secure this contract. I will timely pay all taxes, fines, or
charges pertaining to the motor vehicle. I will keep the motor vehicle
in good repair. I will not allow the motor vehicle to be seized or
placed in jeopardy, or use it illegally. I must pay all I owe even
if the motor vehicle is lost, damaged or destroyed. If a third party
takes a lien or claim against or possession of the motor vehicle,
you may pay the third party any cost required to free the motor vehicle
from all liens or claims. You may immediately demand that I pay you
the amount paid to the third party for the motor vehicle. If I do
not pay this amount, you may repossess the motor vehicle and add that
amount to the amount I owe. If you do not repossess the motor vehicle,
you may still demand that I pay you, but you cannot compute a finance
charge on this amount."
(34) Default rights and repossession provisions. This
paragraph details agreements allowing acceleration of the buyer's
obligation upon the buyer's default or upon the creditor's determination
of insecurity as permitted by Texas Business and Commerce Code, §1.309.
The following provisions are samples of model clauses regarding some
of the default rights and remedies of a creditor in a typical motor
vehicle installment sale transaction:
(A) Acceleration and default. The model clause regarding
acceleration and default reads:
Attached Graphic
(B) Late charge. The model clause regarding late charge
reads: "I will pay you a late charge as agreed to in this contract
when it accrues."
(C) Repossession. At the creditor's option, a creditor
may choose one of the following model provisions pertaining to repossession.
The model clauses regarding repossession read:
(i) "If I default, you may repossess the motor vehicle
from me if you do so peacefully. If any personal items are in the
motor vehicle, you can store them for me and give me written notice
at my last address shown on your records within 15 days of discovering
that you have my personal items. If I do not ask for these items back
within 31 days from the day you mail or deliver the notice to me,
you may dispose of them as applicable law allows. Any accessory, equipment,
or replacement part stays with the motor vehicle." In this provision,
the term "peacefully" is intended to have the same meaning as "without
breaching the peace," as determined by the Texas courts, and as found
under clause (ii) of this subparagraph. Or
(ii) "If I default, you may repossess the motor vehicle
from me if you do so without breaching the peace. If any personal
items are in the motor vehicle, you can store them for me and give
me written notice at my last address shown on your records within
15 days of discovering that you have my personal items. If I do not
ask for these items back within 31 days from the day you mail or deliver
the notice to me, you may dispose of them as applicable law allows.
Any accessory, equipment, or replacement part stays with the motor
vehicle."
(D) Buyer's right to redeem. The model clause regarding
buyer's right to redeem reads: "If you take my motor vehicle, you
will tell me how much I have to pay to get it back. If I do not pay
you to get the motor vehicle back, you can sell it or take other action
allowed by law. My right to redeem ends when the motor vehicle is
sold or you have entered into a contract for sale or accepted the
collateral as full or partial satisfaction of a contract."
(E) Disposition of motor vehicle. The model clause
regarding disposition of the motor vehicle reads: "If I don't pay
you to get the motor vehicle back, you can sell it or take other action
allowed by law. If you sell the motor vehicle in a public or private
sale, you will send me notice at least 10 days before you sell it.
You can use the money you get from selling it to pay allowed expenses
and to reduce the amount I owe. Allowed expenses are expenses you
pay as a direct result of taking the motor vehicle, holding it, preparing
it for sale, and selling it. If any money is left, you will pay it
to me unless you must pay it to someone else. If the money from the
sale is not enough to pay all I owe, I must pay the rest of what I
owe you plus interest. If you take or sell the motor vehicle, I will
give you the certificate of title and any other document required
by state law to record transfer of title."
(F) Collection costs. The model clause regarding collection
costs reads: "If you hire an attorney who is not your employee to
enforce this contract, I will pay reasonable attorney's fees and court
costs as the applicable law allows."
(G) Cancellation of optional insurance or service contracts.
The model clause regarding cancellation of optional insurance or service
contracts reads: "This contract may contain charges for insurance
or service contracts or for services included in the cash price. If
I default, I agree that you can claim benefits under these contracts
to the extent allowable, and terminate them to obtain refunds of unearned
charges to reduce what I owe or repair the motor vehicle."
(35) Acceleration, waiver of notice of intent to accelerate,
and notice of acceleration. A model clause regarding the holder's
right to accelerate maturity of the contract and to waive the buyer's
or co-buyer's common law right to notice of intent to accelerate,
notice of acceleration, or both reads: "If I default, or you believe
in good faith that I am not going to keep any of my promises, you
can demand that I immediately pay all that I owe. You don't have to
give me notice that you are demanding or intend to demand immediate
payment of all that I owe."
(36) Refund upon acceleration. For contracts using
the sum of the periodic balances or scheduled installment earnings
methods, the model clause regarding the buyer's right to a finance
charge refund upon acceleration of the contract reads: "If you demand
that I pay you all that I owe, you will give me a credit of part of
the Finance Charge as if I had prepaid in full."
(37) Servicing and collection contact. The Telephone
Consumer Protection Act, 47 U.S.C. §227(b)(1)(A) - (B), generally
prohibits creditors and other persons from calling a residential telephone
line using an automatic telephone dialing system or an artificial
or prerecorded message without the prior express consent of the called
party. The model clause for servicing and collection contact reads:
"You may try to contact me at any mailing address, e-mail address,
or phone number I give you, as the law allows. You may try to contact
me in writing (including mail, e-mail, and text messages) and by phone
(including prerecorded or artificial voice messages and automatic
telephone dialing systems)."
(38) Dishonored check fee. Under Texas Business and
Commerce Code, §3.506, the holder of a payment device (including
a check) may charge a processing fee up to $30 if the payment device
is dishonored. The model clause for a dishonored check fee reads:
"I agree to pay you a fee of up to $30 for a returned check. You can
add the fee to the amount I owe or collect it separately."
(39) Integration and severability.
(A) The contract may include an integration clause
indicating that the parties to the contract intend it to be the final
written expression of their agreement. The model clause regarding
integration reads: "This contract contains the entire agreement between
you and me relating to the sale and financing of the motor vehicle."
(B) The contract may also include a severability clause
providing that the invalidity of any portion of the contract does
not render invalid other parts of the contract that would otherwise
be valid. The model clause regarding severability reads: "If any part
of this contract is not valid, all other parts stay valid."
(40) No waiver and limitations on creditor's rights
and usury savings.
(A) A model clause to prevent a creditor's delay in
enforcing rights under the contract from affecting a waiver of those
rights reads: "If you don't enforce your rights every time, you can
still enforce them later."
(B) A provision establishing limitations on the creditor's
rights reads: "You will exercise all of your rights in a lawful way."
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