The California Attorney General’s office has released a long-awaited opinion on a form of contract question. Cal. Op. Atty. Gen. No. 08-804, Dec. 31, 2009. The long-held, informal position of the AG that a “single document” rule meant that all the terms of a consumer agreement had to appear on a “single piece of paper” has been abandoned and a new, official position takes its place.
The “single document” rule actually appears in three separate statutes in California: the Automobile Sales Finance Act (also called Rees-Levering) (Cal. Civ. Code § 2981.9), the Unruh Act (for installment sales of goods and services) (Cal. Civ. Code § 1803.2), and the Vehicle Leasing Act (Cal. Civ. Code § 2985.8(a)).
The nearly 50-year-old requirement that the form of contract to document a consumer-purpose retail installment sale must be a single piece of paper has been dissolved, and in its place we have a legal opinion that recognizes the modernity of today’s credit transactions. Citing a Ninth Circuit Court of Appeals decision about credit disclosures and a California Supreme Court decision about the filing of documents under procedural rules of court, the Opinion states:
It is apparent that these authorities deem the purpose of the single document rule to be the facilitation of the consumer’s review of all of the parties’ agreements before the consumer signs the sale or lease contract, so that the consumer has complete and accurate information. The rule also helps to avert later disputes about the terms of the parties’ final agreement. While a single-sheet document, which forecloses the possibility of pages becoming detached, may serve these objectives well, the single document rule does not require that the document consist of only one sheet of paper.
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Accordingly, we conclude that the single document requirement for automobile sales contracts is satisfied if the document consists of multiple pages that are attached to each other and integrated by means such as inclusive sequential page numbering (e.g., “1 of 4”, “2 of 4” etc.).
Please note that the sequential numbering of pages and physical attachment of pages are not the only considerations; care should be given to also integrate addenda or attachments that change the terms of the parties’ agreement into the “single document” that constitutes the consumer contract.
Elizabeth (“Liz”) Huber is a partner in the California office of Hudson Cook, LLP. Basis Points readers can reach Liz at 310-686-5050, or by e-mail at eahuber@hudco.com.