California Codes

Cal. Civil Code § 1803.2 (2026)

✓ current as of May 2026

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Except as provided in Section 1808.3, every retail installment contract shall be contained in a single document that shall contain:

(a)The entire agreement of the parties with respect to the cost and terms of payment for the goods and services, including any promissory notes or any other evidences of indebtedness between the parties relating to the transaction.

(b)(1)At the top of the contract the words “Security Agreement” shall appear in at least 12-point bold type where a security interest in the goods is retained or a security interest on other goods or realty is obtained by the seller as security for the goods or services purchased.

(2)At the top of the contract the words “Retail Installment Contract” shall appear in at least 12-point bold type where a security interest is not retained or obtained by the seller as security for the goods or services purchased.

(3)Any contract for goods or services that provides for a security interest in real property shall also provide the following notice, written in the same language, e.g., Spanish, as used in the contract: “WARNING TO BUYER: IF YOU SIGN THIS CONTRACT, YOU WILL BE PUTTING UP YOUR HOME AS SECURITY. THIS MEANS THAT YOUR HOME COULD BE SOLD WITHOUT YOUR PERMISSION AND WITHOUT ANY COURT ACTION IF YOU MISS ANY PAYMENT AS REQUIRED BY THIS CONTRACT.” This notice shall be printed in at least 14-point boldface type, shall be set apart from the rest of the contract by a border, and shall appear directly above the space reserved for the signature of the buyer. A security interest created in any contract described in this paragraph that does not provide the notice as required by this paragraph shall be void and unenforceable.

As used in this subdivision, the term “security interest” refers to a contractual interest in property and not to a mechanic’s lien or other interest in property arising by operation of law.

(c)Where the contract includes a finance charge that is determined on the precomputed basis and provides that the unearned portion of the finance charge to be refunded upon full prepayment of the contract is to be determined by a method other than actuarial, a notice in at least 10-point bold type if the contract is printed reading as follows: “Notice to buyer: (1) Do not sign this agreement before you read it or if it contains any blank spaces to be filled in. (2) You are entitled to a completely filled-in copy of this agreement. (3) You can prepay the full amount due under this agreement at any time and obtain a partial refund of the finance charge if it is $1 or more. Because of the way the amount of this refund will be figured, the time when you prepay could increase the ultimate cost of credit under this agreement. (4) If you desire to pay off in advance the full amount due, the amount of the refund you are entitled to, if any, will be furnished upon request.”

(d)Where the contract includes a finance charge that is determined on the precomputed basis and provides for the actuarial method for computing the unearned portion of the finance charge upon prepayment in full, a notice in at least 10-point bold type if the contract is printed reading as follows: “Notice to buyer: (1) Do not sign this agreement before you read it or if it contains any blank spaces to be filled in. (2) You are entitled to a completely filled-in copy of this agreement. (3) You can prepay the full amount due under this agreement at any time and obtain a partial refund of the finance charge if it is $1 or more. (4) If you desire to pay off in advance the full amount due, the amount of the refund you are entitled to, if any, will be furnished upon request.”

(e)Where the contract includes a finance charge that is determined on the simple-interest basis, a notice in at least 10-point bold type if the contract is printed reading as follows: “Notice to buyer: (1) Do not sign this agreement before you read it or if it contains any blank spaces to be filled in. (2) You are entitled to a completely filled-in copy of this agreement. (3) You can prepay the full amount due under this agreement at any time. (4) If you desire to pay off in advance the full amount due, the amount which is outstanding will be furnished upon request.”

(f)This section shall become operative on October 1, 1995.

(g)The form specified in this section may be used before October 1, 1995, to comply with the provisions of this section as amended and repealed by Section 2 of Chapter 888 of the Statutes of 1994.

Notes of Decisions

Cited in 5 cases (2 in the last 5 years), 1978–2022 · leading case: Boerner v. Colwell Co., 577 P.2d 200 (Cal. 1978).

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Boerner v. Colwell Co., 577 P.2d 200 (Cal. 1978). · cites it 2× “Here, as indicated above, the property which was the subject of the transaction whether it be considered the completed vacation home or the materials and labor necessary to bring it into existence was intended to be and was in fact affixed to and made a part of the real…”

Leon v. Fam. Fitness Ctr. ( 107), Inc., 98 Cal. Daily Op. Serv. 1589 (Cal. Ct. App. 1998). “In fact, Civil Code section 1803.2 requires warnings to protect consumers’ financial interests from potential hazards in retail installment contracts by providing notice in larger, boldface type (14-, 12- or 10-point).”

Morgan v. Ygrene Energy Fund, Inc. (Cal. Ct. App. 2022). “1, subdivision (j) [prohibiting taking a security interest in a senior citizen’s home under a home improvement contract]; (2) Civil Code section 1803.2 [failing to admonish, “IF YOU SIGN THIS CONTRACT, YOU WILL BE PUTTING UP YOUR HOME AS SECURITY”]; (3) Financial Code section…”

California v. Pinnacle Sec. Ca. LP, 746 F. Supp. 2d 1129 (N.D. Cal. 2010). “Plaintiff specifically alleges violations of the following California statutes which do not mention any federal law: (1) Civil Code § 1671(d) (outlawing the use of liquidated damage provisions in contracts with consumers), (2) Civil Code § 1803.2 (rules for retail installment…”

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