Retail Installment Contract or Agreement
What this document covers
A Retail Installment Contract or Agreement is a legal document that outlines the terms of a purchase made with financing. This form is used when a seller provides credit for the sale of goods or services to the purchaser. Unlike typical consumer credit agreements, this form is tailored for casual sellers who do not frequently extend consumer credit, though it may also apply in commercial settings. The agreement also ensures that the seller retains a security interest in the item being purchased, which allows them to reclaim the item if payments are not made.
Key components of this form
- Purchase Price: The total amount for the goods or services.
- Interest Rate: Specifies the annual simple interest on the financed amount.
- Payment Terms: Details the number and due dates of monthly installments.
- Late Fees: Outlines penalties for failure to pay on time.
- Purchase Money Security Interest: Grants the seller a claim against the purchased item until full payment is made.
- Events of Default: Lists conditions under which the purchaser may be considered in default.
- Remedies: Describes the seller's legal options if the purchaser defaults.
- Complete Understanding: Indicates that the agreement is the full understanding between parties.
- Governing Law: States the applicable law governing the contract.
Common use cases
This form is appropriate to use in situations where a seller agrees to extend credit to a purchaser for buying goods or services. It is commonly utilized by businesses making sales to customers who require financing but may not have access to traditional credit sources. Ideal scenarios include selling appliances, furniture, vehicles, or other significant items where installment payment is necessary.
Intended users of this form
This Retail Installment Contract is designed for:
- Casual sellers who do not regularly extend credit.
- Businesses selling products on an installment basis.
- Individuals offering financing for goods or services to another party.
How to complete this form
- Identify the parties involved by entering the names of the seller and purchaser.
- Specify the total purchase price of the goods or services being financed.
- Enter the applicable interest rate and outline the payment terms, including number of installments and due dates.
- Clearly state any late fees applicable for missed payments.
- Detail the collateral being financed, granting the seller a security interest.
- Obtain signatures from both the seller and purchaser on the designated lines.
Does this form need to be notarized?
This form does not typically require notarization to be legally valid. However, some jurisdictions or document types may still require it. US Legal Forms provides secure online notarization powered by Notarize, available 24/7 for added convenience.
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Avoid these common issues
- Not clearly defining late fees or payment terms, leading to potential disputes.
- Failing to properly identify collateral, which may undermine security interests.
- Not including signatures from both parties, which renders the agreement unenforceable.
- Neglecting to review state-specific regulations that may apply to installment agreements.
Benefits of completing this form online
- Convenient access: Download and complete the form from anywhere at any time.
- Editability: Customize the agreement to suit the specific terms of your transaction.
- Reliability: Forms are drafted by licensed attorneys, ensuring legal compliance and accuracy.
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FAQ
Understanding a Purchase Contract. A retail installment sale is a transaction between you and a dealer to purchase a vehicle where, you agree to pay the dealer over time, paying both the value of the vehicle plus interest. A dealer can sell the retail installment contract to a lender or other party.
The greatest benefit of the installment sale method is lowering your capital gain tax rate, by breaking up the gain you receive from one year to several years. Selling this way can lower your adjusted gross income and applicable federal tax rate, equating to significant tax savings over time.
The seller retains legal title to the real property until the purchaser fully pays off the loan, at which point the seller records a deed transferring legal title to the purchaser. A purchaser under an installment land contract is usually not protected by foreclosure statutes as with a mortgage or deed of trust.
A retail installment sale,on the other hand, is a transaction between you and the dealer to purchase a vehicle where you agree to pay the dealer over time, paying both the value of the vehicle plus interest. A dealer could sell the retail installment sales contract to a lender or other party.
Buyer's Order or Bill of Sale: Just as with a new vehicle, a used car Buyer's Order or Bill of Sale is the basic sales contract between the buyer and the seller.Finance Agreement or Retail Installment Contract: Just as with new cars, used cars are often financed through the dealership.
In an installment sale contract sometimes called a contract for deed generally the owner agrees to sell the real estate to the buyer for periodic payments to be applied to the purchase price in some fashion.The buyer usually receives possession of the real estate during the term of the contract.
An installment purchase agreement is a contract used to finance the acquisition of assets. Under the terms of such an agreement, the buyer pays the seller the full purchase price by making a series of partial payments over time. The payments include stated or imputed interest.
With installment sales, the buyer makes payments to the seller over time, rather than handing over a lump sum at closing. The buyer's obligation to make future payments to the seller may be spelled out in a deed of trust, note, land contract, mortgage or other evidence of debt.
