Back | WP 6.1 Version |
 ASCII  Version | PDF
Version
     
 

Date: March 30, 1999

To: Uniform Consumer Leases Act Drafting Committee & Observers

From: Ralph J. Rohner, Reporter

Re: Draft sent to Style Committee

Enclosed is a copy of the draft Uniform Consumer Leases Act as it is being forwarded to the NCCUSL Style Committee for review. I have stripped out all the "Reporter's Notes" and "Proposed Comments," so the Style Committee can focus on statutory language. When I receive the Style Committee's comments, I will reconstruct the draft, with Proposed Comments, for the first reading before the Conference in July.

This draft reflects changes agreed to at our Indianapolis meeting on March 19-20. It also contains some new language that tries to capture a Committee consensus on several difficult sections, specifically:

§ 205 "Notice to Guarantor": Per discussion, this whole section is rewritten to track UCCC 3-208 rather than FTC cosigner rule. I attempted a definition of "secondary obligor" that tries to separate out mere co-lessees.

§ 307 Open-End Lease: This draft tracks the federal CLA § 183(a), imposing identical restraints on end-of-term liability, but covering leases up to $150,000 (instead of the $25,000 cap in the federal law.

§ 310 re Substitute Insurance: Moved from Part 4 (§ 401), and picks up limitation on insurance charges previously contained in § 204(e) of March draft. [This results in renumbering the sections in Part 4.]

§ 401 "Gap amount" exclusions clarified.

§ 404 "Realized value" adjusted to use higher of "best offer" or "fair market value" as benchmark.

§ 405 "Early Termination Liability" modified somewhat in light of discussion. Might §405(d)(3) be recast to state this component as "the total of remaining periodic lease payments, reduced to present value by application of the actuarial rate implicit in the lease." This would eliminate the need for lengthy definition and reference to "constant yield method."

§ 406 "Excess wear and tear": Pursuant to Committee suggestion, 406(c) provides a general rule, while 406(d) sets out a special rule for motor vehicle leases.

§ 501 "Private Remedies" is modified to allow lessee to recover:

-- Actual damages in all cases (and injunctive/declaratory relief);

-- Statutory damages in a fixed amount ($500 suggested) for violations of disclosure provisions;

-- Statutory damages on a sliding scale ($50 to $2,000 suggested) for violations of certain other sections, with enumerated "factors" for the court to consider.

-- For each of these latter measures, I've included for discussion an "Option B" which would limit recovery to the higher of actual or statutory damages, but not both.

§ 502 re "Effect of Violation...": I've deleted subsection (a)(2) concerning rescission. If we want to retain a cancellation right for referral abuses, we can put it in § 309.

As always, your thoughts and suggestions are welcome.