The modern instalment credit sale may be justly compared to in intricate piece of machinery. Its legal structure is composed in part of legal rules, in part of contractual provisions. But a study of the machine's design will not suffice to reveal its everyday operation, for legal devices contain many tools intended only for emergency use. For an understanding of the operation of the mechanism which has been created for instalment sale credit, it is necessary to examine it with reference to the business practices which have developed in its employment. This article, accordingly, seeks to depict not only the legal structure of the instalment credit sale but also its operation, chiefly as it is revealed in the retail sale of automobiles.' The diversity in both the fields of law and practice 2 is such that generalization has been compelled, with the consequent sacrifice of those qualifications essential to complete accuracy. Detailed portrayal, however, would require a corpulent treatise. Instalment selling in the average retail sale where the seller himself assumes the burden of carrying the credit is characterized by relatively simple agreements 3 usually 0 A.B., 1932, Washington and Lee University. Member of the Virginia Bar. Now a member of the third year class in the Duke University School of Law and Current Decisions Editor of the Duke Bar Assoclation Journal. The retailing of automobiles has been selected in part because the volume of automobile sales on instalment credit constitutes, it has been estimated, over 5o per cent of all retail instalment sales, Lynd, The People as Consumers, 2 RECENT SOCIAL TRENDS (1933) 857, 862, and in part because the legal mechanism seems to have been most completely developed in this field. Concentration on the normal automobile transaction has eliminated the consideration of those abuses which are encountered most frequently in the sale of other commodities. For a discussion of sharp practices encountered in instalment credit sales, see Greene, Better Business Bureau Activities in Aid of the Time Purchaser, infra, p. 254. Considerations of space have precluded a treatment of the credit mechanism created for automobile wholesaling. 'A business national in scope will undoubtedly reveal variation in practices not only from region to region but also from company to company. As representative of the contracts of the standard, reputable finance company, contracts used by the four national companies, Commercial Credit Company, Commercial Invest Trust, Inc., General Motors Acceptance Corporation, and Universal Credit Company, have been selected for study. Although one set of contracts covering the nation was secured, most of those examined were prepared for use in North Carolina and adjacent states. Study of the contracts was supplemented by interviews with dealers and finance company representatives and reference to the works hereinafter cited. ' These more simply phrased contracts, as used by companies doing their own financing to a large extent, such as Montgomery Ward and Sears, R...
