Notwithstanding any agreement to the contrary, the holder of a conditional sale contract for which Regulation Z disclosures are required pursuant to Section 18036.5 is subject to all equities and defenses of the buyer against the seller, except as provided by Section 18036.5. However, the assignee’s liability may not exceed the amount of the debt owing to the assignee at the time of assignment. The assignee shall have recourse against the seller to the extent of any liability incurred by the assignee pursuant to this section whether the assignment was with or without recourse except to the extent of any written agreement between the seller and assignee which expressly references this section and modifies its effect.

(Amended by Stats. 1983, Ch. 1124, Sec. 23. Operative July 1, 1984, by Sec. 57 of Ch. 1124.)

Terms Used In California Health and Safety Code 18037

  • Contract: A legal written agreement that becomes binding when signed.
  • Recourse: An arrangement in which a bank retains, in form or in substance, any credit risk directly or indirectly associated with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the bank's claim on the asset. If a bank has no claim on an asset it has sold, then the retention of any credit risk is recourse. Source: FDIC
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