“TILA does not prohibit, restrict, or otherwise control the parties [sic] right to freedom of contract.” No, You Can’t Backdate. District Court for the Eastern District of Virginia ruled on a “novel question” under the federal Truth in Lending Act.This opinion deals with a motion to alter or amend a judgment. The case involved a sale and spot delivery of an automobile.If you publish using our single story import, migration tool, Word Press plugin or via the API and the original publish date is found in the meta-data it will be auto-backdated.
“TILA does not prohibit, restrict, or otherwise control the parties [sic] right to freedom of contract.” No, You Can’t Backdate. District Court for the Eastern District of Virginia ruled on a “novel question” under the federal Truth in Lending Act.This opinion deals with a motion to alter or amend a judgment. The case involved a sale and spot delivery of an automobile.If you publish using our single story import, migration tool, Word Press plugin or via the API and the original publish date is found in the meta-data it will be auto-backdated.Tags: dating co inhank azaria datingChat random women freewho has chelsea kane datingdavid arquette dating entertainment reporteronline dating sites new yorkdating for americans exclusivelyregina king on dating white menquestions ask first email online dating
The court notes that as a matter of Florida law, no transaction in which a TILA violation occurred was ever consummated, and this is why the court dismissed the TILA claim.
The court states: “Bill Heard had no obligation to provide TILA disclosures prior to obtaining financing approval.” It then goes on to explain that TILA requires certain disclosures “before credit is extended” and that Regulation Z interprets the phrase “before credit is extended” to mean prior to consummation of the transaction.
by calculating the annual percentage rate of interest on the basis of the date on the backdated agreement rather than the date the transaction was consummated.” The court ruled that the auto dealer violated TILA.
By its terms, the first retail installment contract became void when the dealer was unable to obtain financing on the terms reflected in the agreement within five days.
Bill Heard moved to dismiss the TILA claim, arguing that the plaintiffs never consummated a transaction with the dealership in which a TILA violation occurred.
One plaintiff conceded that he returned the vehicle he tried to buy and received his down payment and trade-in back from the dealer.And to say it’s up to the bean-counters to catch this situation is silly, because the whole reason you’re using phony dates is so that the bean-counters won’t know what you really did.And this is why defenses to backdating sometimes get hard for me to understand.The court disagreed, once again concluding that the date of consummation was April 13. The court rejected the notion that the dealer’s argument changed its analysis under TILA and Regulation Z. “The official commentary on the definition of consummation indicates,” the court continues, “that state law, not Regulation Z, determines when a consumer becomes contractually obligated.” The court then indicated that spot delivery contract clauses – like the one in this case (no contract language provided) – have been construed under Florida contract law to create a condition precedent to contract formation. Note: Presumably, the dealer’s spot delivery documents make financing a condition precedent to contract formation, whereas many dealers make it a condition subsequent, in which case their documents allow them to unwind the deal.).Since much of the case law relied on by the plaintiffs seemed to involve spot delivery scenarios set up with financing as a condition subsequent to contract formation, the court found that those cases did not change its analysis – that any TILA violation in the plaintiffs’ unfunded contracts was not actionable since those contracts were never consummated under Florida law because the condition precedent to contract formation, financing, never came about.Whenever I write about backdating, many people write in to tell me that backdating’s not illegal; you just have to account for it correctly.Since so many people think this is an important point, I thought I’d do a post addressing just that contention. What I assume people mean is that granting in-the-money options is not illegal, so long as you account for it properly. But the whole point of backdating is to pretend that you’re not granting in-the-money options when in fact you are.The court noted in its prior opinion that the dealer indicated that, “it is industry practice for car dealers to use the date of delivery of the vehicle on subsequent agreements reached in spot delivery transactions, and banks will only accept buyer’s orders containing the date of delivery of the vehicle.” The court responded: “According to Regulation Z, consummation occurs not when the consumer takes possession of the product, but at the ‘time that a consumer becomes contractually obligated on a credit transaction.’” Although the required disclosures were timely, the court found that they were inaccurate.The APR figure on the second agreement was inaccurate because “Regulation Z does not permit calculation of the APR based on an interest accrual date which is earlier than the consummation date.” In its argument to the court to amend or alter the judgment, the dealer argued that the second contract “related back” to an “effective date” of April 3 by agreement of the parties and that the relation back made the disclosed APR accurate.