§ 501. Form. 1. A rental-purchase agreement must be written in plain
English and in any other language used by the merchant in an
advertisement related to the rental-purchase agreement. Numerical
amounts must be stated in figures.

2. Disclosures required by this section must be printed or typed in
each rental-purchase agreement in a size equal to at least ten-point
bold-faced type.

3. A rental-purchase agreement may not contain a provision:

(a) requiring a confession of judgment;

(b) authorizing a merchant or an agent of the merchant to commit a
breach of the peace in the repossession of merchandise;

(c) waiving a defense, counterclaim, or right the consumer may have
against the merchant or an agent of the merchant;

(d) requiring the purchase of insurance from the merchant to cover the
merchandise;

(e) requiring the payment of a late charge or reinstatement fee unless
a periodic payment is delinquent for more than three days for agreements
that are renewed on week by week terms and seven days for agreements
that are renewed on month by month terms, and the charge or fee is in an
amount not more than the greater of ten percent of the delinquent amount
or three dollars for agreements that are renewed on week by week terms
and not more than the greater of ten percent of the delinquent amount or
five dollars for agreements that are renewed on month by month terms. In
the event that multiple items are leased to a consumer pursuant to more
than one rental-purchase agreement, any late fee imposed pursuant to
this section shall not exceed ten percent of the total of the periodic
payments that are delinquent.

(f) requiring a payment in addition to regular periodic payments in
order to acquire ownership of the merchandise or requiring periodic
payments totalling more than the cost to acquire ownership, as provided
in section five hundred three of this article.

4. Only one late charge or reinstatement fee may be assessed for a
delinquent periodic payment regardless of the period during which it
remains in default. No merchant shall assess a late charge for a
periodic payment made in full on its due date or within three days for
agreements that are renewed on week by week terms or seven days for
agreements that are renewed on month by month terms when the only
delinquency is attributable to late fees assessed on earlier periodic
payments. With respect to payments accepted by mail or by store deposit
box, no merchant shall assess a late fee for payments which are
post-marked or received before the expiration of the applicable
delinquency periods.

5. A rental-purchase agreement must provide that:

(a) a charge in addition to periodic payments, if any, must be
reasonably related to the cost of a service performed;

(b) a consumer who fails to make a timely payment may reinstate an
agreement without losing rights or options previously acquired and
without incurring any charges, other than rental charges for the time he
possessed the property, except for those charges provided for in
paragraph (e) of subdivision three of this section by making the
required payment before the later of seven days or half the number of
days in a regular payment period after the due date of the payment;

(c) if the merchandise is returned or voluntarily surrendered by the
consumer, other than through judicial process, during the applicable
reinstatement period set forth in paragraph (b) of this subdivision, the
consumer's right to reinstate the agreement as set forth in paragraph
(b) of this subdivision shall be extended for a period of not less than
one year after the date of the return of the merchandise.

6. This section does not prevent a merchant from attempting to
repossess merchandise during the reinstatement period provided in
paragraph (b) of subdivision five of this section. The consumer's right
to reinstate an agreement does not expire because of such a
repossession. If the consumer is entitled to reinstatement after
repossession, then, within fifteen days of the repossession, the
merchant shall provide written notice to the consumer of the consumer's
right to reinstate the agreement pursuant to paragraph (c) of
subdivision five of this section. On reinstatement, the merchant shall
provide the consumer with the same merchandise or substitute merchandise
of comparable quality and condition. If substitute merchandise is
provided, the merchant shall provide the consumer with the disclosures
required in subdivision seven of this section.

7. (a) Every rental-purchase agreement shall be contained in a single
document which shall set forth all of the agreements of the merchant and
the consumer with respect to the rights and obligations of each party.
Every rental-purchase agreement shall clearly and conspicuously disclose
all of the following:

(1) the names of the merchant and the consumer, the merchant's
business address and telephone number, the consumer's address, the date
on which the agreement is executed, and a description of the merchandise
sufficient to identify it;

(2) whether the merchandise subject to the rental-purchase agreement
is new or used, provided, however that it shall not be a violation of
this section to indicate that the merchandise is used if it is actually
new;

(3) the minimum period for which the consumer is obligated under the
rental-purchase agreement; the duration of the rental-purchase agreement
if all regularly scheduled periodic payments are made, designated as the
"rental period"; and the amount of each periodic payment;

(4) the total of payments and the total number of periodic payments
necessary to acquire ownership of the merchandise if the renter makes
all regularly scheduled periodic payments;

(5) the cash price of the merchandise subject to the rental purchase
agreement;

(6) the cost of rental;

(7) the amount and purpose of any other payment or fee in addition to
those specified pursuant to subparagraphs three and four of this
paragraph, including any late payment fee;

(8) a statement that the total number and dollar amount of payments
necessary to acquire ownership of the rental merchandise disclosed under
subparagraph four of this paragraph does not include other fees, such as
late payment fees, and that the consumer should read the rental-purchase
agreement for an explanation of any applicable additional fees;

(9) whether the consumer is liable for loss or damage to the
merchandise and, if so, the maximum amount for which the consumer may be
liable, which in the case of loss shall in no event be greater than the
price the consumer would have paid to exercise an early purchase option
pursuant to this article. In the case of damage to the merchandise,
other than normal wear and tear the consumer shall be liable for the
lesser of the price the consumer would have paid to exercise an early
purchase option pursuant to this article or the cost of the repair as
determined by the merchant;

(10) that the consumer does not acquire ownership rights unless the
consumer has complied with the ownership terms of the agreement;

(11) the following notice:

NOTICE

You are renting this merchandise. You will not own it until you make
all of the regularly scheduled payments or you use the early purchase
option.

You do not have the right to keep the merchandise if you do not make
required payments or do not use the early purchase option. If you miss a
payment, the merchant can repossess the merchandise, but, you may have
the right to the return of the same or similar merchandise.

See the contract for an explanation of your rights.
(12) a statement of the consumer's right to acquire ownership as
provided in section five hundred four of this article, including
substantially the following statement: "The attached chart shows the
amount required to exercise your early purchase option after each
renewal payment, assuming you make each periodic payment on time." The
rental-purchase agreement shall be accompanied by a chart showing the
amount required to exercise the consumer's early purchase option after
each periodic payment if payments are made as scheduled;

(13) a description of the consumer's reinstatement rights as provided
in subdivision five of this section;

(14) a description of the consumer's right to lower periodic payment
amounts as provided in section five hundred four-a of this article.

(15) if warranty coverage is transferable to a consumer who acquires
ownership of the merchandise, a statement that the unexpired portion of
all warranties provided by the manufacturer, distributor, or seller of
the merchandise that is the subject of the rental-purchase agreement
will be transferred by the merchant to the consumer at the time the
consumer acquires ownership of the merchandise from the merchant; and

(16) a description of the merchant's obligation to maintain the rental
merchandise and to repair or replace rental merchandise that is not
operating properly, as provided in section five hundred four-b of this
article.

(b) (1) The disclosures required by subparagraphs three, four, five,
and six of paragraph (a) of this subdivision shall be printed in at
least ten-point boldfaced type or capital letters if typed and shall be
grouped together in a box formed by a heavy line in the following form:
________________________________________________________________________
TOTAL OF COST OF RENTAL CASH PRICE
PAYMENTS
$ $ $
You must pay Amount over Merchandise available
this amount to cash at this
own the price you will price for cash from
merchandise if pay if the merchant. See
you make all you make all about your
the regular regular early purchase
payments. payments. option rights.
You can buy
the merchandise
for less
under the
early
purchase
option.
________________________________________________________________________

AMOUNT OF NUMBER RENTAL

EACH PAYMENT OF PERIOD

PAYMENTS

$

per

_______________

(insert period)
________________________________________________________________________

(2) The box described in subparagraph one of this paragraph shall
appear immediately above the space reserved for the consumer's
signature.

(c) The disclosures required by subparagraphs three, four, five, and
six of paragraph (a) of this subdivision shall be grouped together in a
box formed by a heavy line in the form prescribed in paragraph (b) of
this subdivision and shall be clearly and conspicuously placed on a tag
or sticker affixed to the merchandise available for rental-purchase. If
the merchandise available for rental-purchase is not displayed at the
merchant's place of business but appears in a photograph or catalog
shown to consumers, a tag or sticker shall be affixed to the photograph
of the merchandise or catalog shown to consumers or shall be given to
consumers. The disclosure required by subparagraph two of paragraph (a)
of this subdivision also shall be clearly and conspicuously placed on
the tag or sticker. The provisions of this paragraph shall not apply to
photographic depictions of merchandise that comply with the provisions
of section five hundred five of this article.

(d) All disclosures required by this subdivision shall be printed or
typed in a color or shade that clearly contrasts with the background.

8. (a) (1) Subject to federal law and regulation, no rental-purchase
agreement shall contain a mandatory arbitration clause. Nothing
contained herein shall be construed to prohibit a merchant from
incorporating a provision within such contract that such merchant agrees
that the decision of the arbitrator or panel of arbitrators shall be
final in its application to such merchant and not subject to court
review.

(2) The provisions of a mandatory arbitration clause shall be null and
void but shall not constitute a violation of this article. The inclusion
of such clause in a rental-purchase agreement shall not serve to impair
the enforceability of any other provision of such contract.

(b) For the purposes of this subdivision the following terms shall
have the following meaning:

(1) "mandatory arbitration clause" shall mean a term or provision
contained in a rental-purchase agreement which requires the consumer to
submit any controversy thereafter arising under such agreement to
arbitration prior to the commencement of any legal action to enforce the
provisions of such agreement and which also further provides language to
the effect that the decision of the arbitrator or panel of arbitrators
in its application to the consumer shall be final and not subject to
court review.

(2) The term "arbitration" shall mean the use of a decision making
forum conducted by an arbitrator or panel of arbitrators within the
meaning and subject to the provisions of article seventy-five of the
civil practice law and rules.