Disclaimer: The State Law Library is unable to give legal advice, legal opinions or any interpretation of the law. General Information. About This Guide A statutory right to cancel a contract or return a purchase because you change your mind is not the norm in Texas. Texas Laws Below is a list of Texas laws that govern the right to cancel certain consumer contracts. Texas Business and Commerce Code, Chapter Door-to-door sales or sales made at a place other than the seller's place of business.
Section These sales are generally between the retail buyer and seller. Installment sales are between the retail buyer and seller and do not apply to third-party loan providers.
Sections Section 5. Notice provisions and the time frame for cancellation are covered. Texas Constitution art. Federal Regulations Below are some of the federal laws that govern common consumer purchases. These contracts may be used in connection with Chapter retail installment transactions. Accepted non-standard motor vehicle retail installment contracts that may currently be used by retail sellers. For current transactions, retail sellers may not use outdated or previously submitted motor vehicle retail installment contracts.
Older motor vehicle retail installment contracts do not comply with current provisions of federal and state law. J the amount financed under the retail installment contract;. An assignee of a retail installment contract may not be held responsible for a retail seller's failure to comply with the requirements of this section.
The commissioner has exclusive jurisdiction to enforce this section. Information not required by this chapter may be included in a retail installment contract. Items required by this chapter to be in a retail installment contract are not required to be stated in the order set forth in this chapter.
Chapter , Insurance Code, does not apply to a retail installment transaction. If the commissioner determines that the retail seller in fact owes the prospective retail buyer a certain amount under Subsection g , the commissioner may order the retail seller to pay the amount to the prospective retail buyer.
If the trade-in motor vehicle is not returned by the retail seller in accordance with this section and the retail seller does not pay the prospective retail buyer an amount equal to the agreed value of the trade-in motor vehicle within the period prescribed by this section, the commissioner may assess an administrative penalty against the retail seller in an amount that is reasonable in relation to the value of the trade-in motor vehicle.
The commissioner shall provide notice to the retail seller and the prospective retail buyer of the commissioner's determination under this subsection. A hearing under this subsection is governed by Chapter , Government Code.
After the hearing, based on the findings of fact, conclusions of law, and recommendations of the hearings officer, the commissioner shall enter a final order. The entire deposit must be refunded to the person if the person prevails in the hearing. If the person does not prevail, any portion of the deposit in excess of the costs of the hearing assessed against the person is refundable.
Added by Acts , 85th Leg. A retail installment contract may be more than one document. This subsection does not affect the validity of other provisions of the contract that may be given effect without the voided provision, and to that extent those provisions are severable. A retail installment contract may provide for:. As an alternative to the maximum rate or amount authorized for a time price differential under Section A retail installment contract that is payable other than in substantially equal successive monthly installments or the first installment of which is not payable one month from the date of the contract may provide for a time price differential that does not exceed an amount that, having due regard for the schedule of payments, provides the same effective return as if the contract were payable in substantially equal successive monthly installments beginning one month from the date of the contract.
Amended by Acts , 77th Leg. A retail installment contract may provide for the payment of:. A retail installment contract may not authorize the holder to accelerate the maturity of all or a part of the amount owed under the contract unless:. A retail seller shall:. Until the retail seller complies with Section On request by a retail buyer, the holder may agree to one or more amendments to the retail installment contract to:.
A premiums for continuing in force any insurance coverages provided for by the contract; and. B the cost of any insurance incidental to the amendment;. C the amount of each additional necessary official fee; and. D the amount of each accrued delinquency or collection charge; and.
An amendment to a retail installment contract must be confirmed in a writing signed by the retail buyer. The holder shall:. After amendment the retail installment contract is the original contract and each amendment to the original contract.
A retail buyer may prepay a retail installment contract in full at any time before maturity. This section prevails over a conflicting provision of the contract. If a retail buyer prepays a retail installment contract in full or if the holder of the contract demands payment of the unpaid balance of the contract in full before the contract's final installment is due, the buyer is entitled to receive a refund credit as provided by Section A on the first day, after the date of the prepayment or demand for payment in full, that is the date of a month that corresponds to the date of the month that the first installment is due under the contract; or.
B if the prepayment or demand for payment in full is made before the first installment date under the contract, one month after the next monthly anniversary date of the contract occurring after the prepayment or demand.
The minimum amount of the refund credit on a retail installment contract to which Section After a demand for payment in full under a retail installment contract, the retail buyer and holder of the contract may:. A the seller is a franchised dealer licensed under Chapter , Occupations Code; and. B the buyer is entitled, at the end of the term of the retail installment contract, to choose one of the following:.
If the retail installment transaction requires insurance coverage as part of the retail buyer's responsibility to the holder, the debt cancellation agreement, guaranteed asset protection waiver, or similarly named agreement must be offered under Chapter The retail seller may not require that the purchase of a debt cancellation agreement by the retail buyer be made in order to enter into a retail installment transaction.
A trade-in credit agreement may not require the retail buyer to provide any other documentation in order to obtain the credit. A retail seller must provide any credit required under a trade-in credit agreement at the time of the purchase or lease of a subsequent motor vehicle. June 18, ; Acts , 77th Leg. A an existing policy of insurance owned or controlled by the buyer; or. B an insurance policy obtained through an insurance company authorized to do business in this state. If liability insurance coverage for bodily injury and property damage caused to others is not included in a retail installment contract, the retail installment contract or a separate writing must contain, in at least point type that is bold-faced, capitalized, underlined, or otherwise conspicuously set out from the surrounding written material, a specific statement that liability insurance coverage for bodily injury and property damage caused to others is not included.
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