Holder notice

Definition

The paragraph a lesson agreement must carry when it is paid in more than four installments.

Why It Matters

The program agreement is the paper and this is what the paper legally is. Where a school takes payment by written agreement in more than four installments, the federal rule makes the agreement a consumer credit contract. It must then carry a notice in bold saying that any holder of it takes the student's claims and defenses against the school, capped at what the student has paid. Read the boundary before assuming it applies: a month-to-month membership with no fixed term is not payable in more than four installments and sits outside. A twelve or twenty-four month program agreement sits inside. Two ways it takes money. Selling a consumer credit contract without the notice is itself an unfair practice, so a school missing it has been in breach on every one signed. And where it is present, undelivered lessons follow the paper to whoever collects it.