Cal. Codes » Civil Code / DIVISION 3. OBLIGATIONS / PART 4. OBLIGATIONS ARISING FROM PARTICULAR TRANSACTIONS / TITLE 2. CREDIT SALES / CHAPTER 1. Retail Installment Sales / ARTICLE 4. Restrictions on Retail Installment Contracts
California Codes

Cal. Civil Code § 1804.1 (2026)

Restrictions on Retail Installment Contracts

✓ current as of May 2026
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No contract or obligation shall contain any provision by which:

(a)The buyer agrees not to assert against a seller a claim or defense arising out of the sale or agrees not to assert against an assignee such a claim or defense other than as provided in Section 1804.2.

(b)In the absence of the buyer’s default in the performance of any of his or her obligations, the holder may accelerate the maturity of any part or all of the amount owing thereunder.

(c)A power of attorney is given to confess judgment in this state, or an assignment of wages is given; provided, that nothing herein contained shall prohibit the giving of an assignment of wages contained in a separate instrument, executed pursuant to Section 300 of the Labor Code.

(d)The seller or holder of the contract or other person acting on his or her behalf is given authority to enter upon the buyer’s premises unlawfully or to commit any breach of the peace in the repossession of goods.

(e)The buyer waives any right of action against the seller or holder of the contract or other person acting on his or her behalf, for any illegal act committed in the collection of payments under the contract or in the repossession of goods.

(f)The buyer executes a power of attorney appointing the seller or holder of the contract, or other person acting on his or her behalf, as the buyer’s agent in collection of payments under the contract or in the repossession of goods.

(g)The buyer relieves the seller from liability for any legal remedies which the buyer may have against the seller under the contract or any separate instrument executed in connection therewith.

(h)The buyer agrees to the payment of any charge by reason of the exercise of his or her right to rescind or void the contract.

(i)The seller or holder of the contract is given the right to commence an action on a contract under the provisions of this chapter in a county other than the county in which the contract was in fact signed by the buyer, the county in which the buyer resides at the commencement of the action, the county in which the buyer resided at the time that the contract was entered into, or in the county in which the goods purchased pursuant to the contract have been so affixed to real property as to become a part of such real property.

(j)The seller takes a security interest, other than a mechanics’ lien, in the buyer’s real property which is the buyer’s primary residence where the buyer is a person who is 65 years of age or older and the contract is for a home improvement, as defined in Section 7151.2 of the Business and Professions Code.

Notes of Decisions
Cited in 5 cases (3 in the last 5 years), 1968–2025 · leading case: Isbell v. Cnty. of Sonoma, 577 P.2d 188 (Cal. 1978).
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Isbell v. Cnty. of Sonoma, 577 P.2d 188 (Cal. 1978). · cites it 2× “If it be for the purpose of securing the plaintiff against a contingent liability, it must state concisely the facts constituting the liability, and show that the sum confessed therefor does not exceed the same.”
James Talcott, Inc. v. Gee, 266 Cal. App. 2d 384 (Cal. Ct. App. 1968). “2 Thus, Civil Code section 1804.1 3 prohibits a seller from exacting a contractual waiver of defenses from a buyer, whereas Commercial Code section 9206 permits a seller to do so, and the amended official comment to such section makes it clear that “such clauses .”
Morgan v. Ygrene Energy Fund, Inc., No. D079364 (Cal. Ct. App. Nov. 1, 2022). · cites it 2× “Plaintiffs allege that defendants engaged in unfair and deceptive business practices by violating consumer protection laws, including 3 Civil Code section 1804.1 subdivision (j), which prohibits taking a security interest in a senior citizen’s residence to secure a home…”
Morgan v. Ygrene Energy Fund, Inc., No. D079364M (Cal. Ct. App. Nov. 21, 2022). · cites it 2× “Plaintiffs allege that defendants engaged in unfair and deceptive business practices by violating consumer protection laws, including 3 Civil Code section 1804.1 subdivision (j), which prohibits taking a security interest in a senior citizen’s residence to secure a home…”
Morgan v. Ygrene Energy Fund, Inc., 18 Cal. 5th 1061 (Cal. 2025). “Their first cause of action, for example, alleges a violation of the prohibition on taking a security interest in a senior’s residence (Civ. Code, § 1804.1, subd. (j)), which would 20 MORGAN v.”
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