Title 14. Miscellaneous Consumer Protection Provisions — Subtitle 11. Layaway Sales

In this subtitle the following words have the meanings indicated.

“Cash price” means the minimum price for which consumer goods subject to a layaway agreement, or other consumer goods of like kind and quality, may be purchased for cash from the seller by the buyer.

“C.O.D. transaction” means an agreement by which the seller requires the buyer to pay the full cash price of the consumer goods upon delivery or tender of delivery by the seller, less any down payment made by the buyer. A C.O.D. transaction does not include an agreement by which the seller requires the buyer to pay interim payments before delivery or tender of delivery of the consumer goods by the seller.

“Consumer goods” means goods bought for use primarily for personal, family, or household purposes, as distinguished from industrial, commercial, or agricultural purposes.

“Down payment” means all amounts paid in cash, credits, or the agreed value of goods, by or for a buyer and to or for the benefit of the seller at or before execution of a layaway agreement or C.O.D. transaction.

“Layaway price” means the cash price of consumer goods together with an optional service charge, not to exceed $1 if the price of the consumer goods is $500 or less or $5 if the price of the consumer goods exceeds $500.

“Retail sale” means the sale of consumer goods for use or consumption by the buyer or for the benefit or satisfaction which the buyer may derive from the use or consumption of the consumer goods by another, but not for resale by the buyer.

“Seller” means a person who sells or agrees to sell consumer goods under a layaway agreement.

“Special order transaction” means a contract for the retail sale of consumer goods, negotiated or entered into in the State, under which either:

A layaway agreement shall include:

Subsection (a)(4) through (12) of this section does not apply to any layaway sale subject to the disclosure provisions of the federal Truth in Lending Act if the seller complies with the applicable disclosure provisions of the federal act and its regulation.

At or before the time the buyer signs a layaway agreement, the seller shall give him an exact copy signed by the seller.

Upon execution of a layaway agreement, the seller shall hold for the buyer or agree to deliver to the buyer on a date mutually acceptable to both parties, the consumer goods or consumer goods that are identical to those originally selected by the buyer, as long as the buyer complies with all of the terms of the layaway agreement.

After the buyer has made all payments to the seller in accordance with the layaway agreement, the seller shall deliver to the buyer the consumer goods or consumer goods that are identical to those originally selected by the buyer.

The seller may not increase the layaway price of the consumer goods sold under a layaway agreement.

If, within 10 calendar days after the execution of a layaway agreement, the seller reduces the selling price of existing items in his stock or inventory identical to those being held for a buyer, the seller shall credit the buyer for the difference between the original layaway price and the reduced price.

The buyer is in default under a layaway agreement whenever 15 days has lapsed from the scheduled date on which the buyer failed to make a required payment.

If the buyer defaults under subsection (a) of this section, the seller may immediately cancel the layaway agreement and recover from the buyer liquidated damages under subsection (c) of this section or § 14–1107 of this subtitle, as applicable.

If the buyer defaults under a layaway agreement 8 or more calendar days after the date of its execution, the seller may retain as liquidated damages an amount not to exceed 10 percent of the layaway price or the total amount paid by the buyer to the date of default, whichever is less.

Unless otherwise provided in the layaway agreement, subsection (c) of this section does not apply if the buyer defaults under a special order transaction.

Except as provided in § 14–1104(c) of this subtitle, at any time before delivery or tender of delivery, and before default by the buyer, the layaway agreement may be canceled by the buyer. However, the seller may retain from the refund due the buyer liquidated damages in an amount which is the lesser of 10 percent of the layaway price or the total amount paid by the buyer to the date of cancellation.

If the seller fails to comply with § 14-1102, § 14-1103, or § 14-1104 of this subtitle, the buyer, before delivery by the seller and acceptance by the buyer of consumer goods purchased under a layaway agreement, may cancel the layaway agreement and receive from the seller a refund of all payments made under the layaway agreement and the return of any goods or property traded in.

Any seller who makes a layaway sale in violation of this subtitle is liable to the buyer for a penalty amount equal to three times the amount paid by the buyer under the layaway agreement, plus reasonable attorney’s fees. Any seller who demonstrates that a violation was nonwillful is not liable for the penalty or attorney’s fees. The penalty provided in this subsection is in addition to that provided in subsection (a) of this section.

If the Division of Consumer Protection, Office of the Attorney General has reason to believe that any seller has violated any provision of this subtitle, the Division may institute a proceeding under Title 13 of this article.