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CONTRACTS

Installment Loan Contracts and Cure Notices

It is important to have a basic knowledge of the requirements of a legal contract, if for no
other reason than to have the ability to communicate with your client or to solicit additional
prospects. Your client or your prospect will appreciate your knowledge of their duties
and responsibilities related to the financing of collateral, which will further enhance your
image as a professional business person.

It is critically important that you are familiar with the Additional Terms and
Agreements on the reverse side of the contract, part of which gives you the right to
repossess the collateral. We will briefly mention the elements that make up a legal
contract and suggest you obtain a contract from one of your clients for a complete review.
As to the Additional Terms and Agreements, we will discuss these in more detail.

A legal contract should include:
qq the names of the seller and the buyer;
qq the place of business of the seller;
qq the residence or the place of business of the buyer as specified by the buyer;
qq a description of the motor vehicle, including its make, year model, and model
and identification number or marks,

The contract should also contain the following:

1. Amount Financed: The “amount financed,” using that term, and a brief description
such as “the amount of credit provided to you or on your behalf.”

2. Finance Charge: The “finance charge,” using that term, and a brief description such
as “the dollar amount the credit will cost you.”

3. Total of Payments: The “total of payments,” using that term, and a descriptive
explanation such as “the amount you will have paid when you have made all scheduled
payments.”

4. Total Sale Price: In a credit sale (installment contract), the “total sale price,” using
that term, and a descriptive explanation, including the amount of any down
payment, such as “the total price of your purchase on credit, including your down
payment of $ .”