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Repossessions: 14.1.2.4 Where a State Statute Defines a Lease as a Security Interest

A Nevada statute requires that dealers provide consumer vehicle lessees with a special disclosure statement. If the dealer does not obtain the consumer’s signature on that disclosure statement, the lease shall be deemed a retail installment contract for the sale of the vehicle.38 In that case, not only the state installment sales statute, but UCC Article 9 should apply to the transaction.

Consumer Bankruptcy Law and Practice: 11.6 Using Chapter 13 to Deal with Secured Creditors

11.6.1 Modification of Secured Creditors’ Rights in Claims Not Secured Only by Real Estate That Is the Debtor’s Principal Residence11.6.1.1 Generally

Perhaps the greatest powers to affect the rights of secured creditors are found in the provisions of chapter 13. Bankruptcy Code section 1322 provides that the debtor’s plan may modify the rights of holders of most secured claims, other than some claims secured only by a security interest in real property that is the debtor’s principal residence.

Consumer Bankruptcy Law and Practice: 15.4.3.8.2.1 Loans related to government units and nonprofit institutions: § 523(a)(8)(A)(i)

The exception has had several different wordings and, as amended in 1990,528 covers an “educational benefit, overpayment or loan”529 that is “made, insured, or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or a nonprofit institution.”530 This language covers most, if not all, student loans made or insured by nonprofit institutions or governmental units.

Consumer Bankruptcy Law and Practice: 15.4.3.8.2.2 Funds received as educational benefits, scholarships, or stipends; § 523(a)(8)(A)(ii)

The exception also applies to “an obligation to repay funds received as an educational benefit, scholarship, or stipend.”535 This language in subpart (A)(ii) is applicable to certain educational benefit grants involving funds received by the debtor or advanced on the debtor’s behalf.536 However, subpart (A)(ii) is not a “catch-all” provision designed to include every type of transaction that creates an educational benefit for a debtor.537 Important

Consumer Bankruptcy Law and Practice: 15.4.3.8.2.3 Private student loans; § 523(a)(8)(B)

The exception was broadened in 2005 to also include, in subpart (B), any other education loans from for-profit lenders if they are qualified education loans as defined in section 221(d)(1) of the Internal Revenue Code.541 The term “qualified education loan” is defined in section 221(d)(1) of the Internal Revenue Code to mean any indebtedness incurred by the taxpayer solely to pay qualified higher education expenses.542 Debtors who have incurred debt for education and other purposes may

Consumer Arbitration Agreements: 4.4.1 Overview

Other than express assent, a party’s assent to a contract may be implied, as manifested through conduct that is consistent with an agreement to be bound by contractual terms. Before finding implied assent, two conditions must be satisfied. First, there must be sufficient evidence that the offer was communicated; that the party was adequately notified of the terms of the agreement. Second, the party must have taken action that is sufficient to indicate assent. The burden is on the party seeking to enforce arbitration to show that the term was communicated and accepted.

Consumer Arbitration Agreements: 4.4.2.1 General

Implied assent does not apply unless the party attempting to enforce the arbitration clause demonstrates that the other party received actual or constructive notice of the arbitration clause.128 Courts look at two factors when determining whether notice was sufficient: whether notice of the arbitration clause was delivered to the consumer or worker, and whether the nature of the notice was sufficient to make an average person aware that they would become bound by the clause through the conduct alleged to constitute assent.

Consumer Arbitration Agreements: 4.4.2.3 Proof of Notice’s Delivery

When the consumer or worker resisting arbitration alleges never having received notice of an arbitration requirement, the party seeking to enforce the arbitration agreement based on implied assent bears the burden of proving sufficient delivery of notice of the arbitration terms.141 When the facts are in dispute, the worker or consumer may be entitled to a jury trial.142

Consumer Arbitration Agreements: 4.4.2.4 Notice Must Be Conspicuous

The party seeking to enforce an arbitration clause must demonstrate not only that the notice was received, but that the form of the notice was sufficient to make an average person aware that they would become bound by the clause.158 While notice sent via email is not necessarily ineffective, courts have refused to enforce arbitration agreements imposed via email when the arbitration clause was downplayed or easy to miss.159

Consumer Arbitration Agreements: 4.4.3.1 General

Even if the party seeking to enforce arbitration can demonstrate that the offer of arbitration was received, there is no assent unless the other party signifies acceptance. The question of what type of action (or inaction) is sufficient to manifest assent must be resolved on a fact-specific basis.

Consumer Arbitration Agreements: 4.4.3.2 Continued Use of Card or Continued Employment

In some states arbitration clauses imposed unilaterally on card holders through the sending of bill stuffers are invalid as a matter of law, regardless of whether the card holder continued to use the card.172 As one federal court analyzed the situation, under the general law of contracts “an offeror has no power to cause the silence of the offeree to operate as an acceptance when the offeree does not intend it to do so.”173

Consumer Arbitration Agreements: 4.4.3.4 Contract Performance As Acceptance

Performance under the contract can manifest intent to be bound by its terms.183 Courts have enforced arbitration clauses contained in nursing home admission contracts, despite the failure of a nursing home representative to sign the admission contract, when the nursing home indicated its assent by admitting the resident and performing the contract terms.184 In a case in which this doctrine bound the business, the Alabama Supreme Court found that the business accepted an amendment sharply limitin

Consumer Arbitration Agreements: 4.5.3 Company Delivers Product But Claims Transaction Not Final

Sellers often argue that an arbitration agreement has been formed when a product is delivered to the consumer and there is a notice that the purchase is not final unless the consumer accepts the terms of the purchase included inside the product’s box. The sellers characterize the transaction as unconsummated until the buyer reviews the product and the terms of the sale, and accepts the product. The sellers argue that, if the terms are not agreeable, the consumer should return the product.

Consumer Arbitration Agreements: 4.5.4.1 Change-in-Terms Provisions Do Not Allow the Addition of an Arbitration Clause

Credit card agreements may contain a provision allowing the card issuer to change the terms of the agreement (but not to add a new term): for example, to increase the interest rate or other fees over time. Card issuers use such provisions to justify sending consumers an arbitration agreement as part of a bill stuffer, arguing that the arbitration agreement is just another change in terms.

Consumer Arbitration Agreements: 4.5.4.3 Delaware Statute Seeks to Allow Addition of New Terms

A Delaware statute attempts to make any added or changed terms found in a bill stuffer binding.214 The statute states that banks can amend their agreements “in any respect” whether the change was originally contemplated by the parties or is integral to their relationship, as long as the agreement does not otherwise provide. New terms may be added. It explicitly allows the addition of an arbitration requirement or “other matters of any kind whatsoever.”