815 ILCS 375/18
Each person, other than a seller or holder, who signs a retail installment contract may be held liable only to the extent that he actually receives the motor vehicle described or identified in the contract, except that a parent or spouse or any other person listed as an owner of the motor vehicle on the Certificate of Title issued for the motor vehicle who co-signs such retail installment contract may be held liable to the full extent of the deferred payment price notwithstanding such parent or spouse or any other person listed as an owner has not actually received the motor vehicle described or identified in the contract and except to the extent such person other than a seller or holder, signs in the capacity of a guarantor of collection
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(815 ILCS 375/18)
(from Ch. 121 1/2, par. 578)
Sec. 18.
Each person, other than a seller or holder, who signs a retail
installment contract may be held liable only to the extent that he actually
receives the motor vehicle described or identified in the contract, except that
a parent or spouse or any other person listed as an owner of the motor vehicle
on the Certificate of Title issued for the motor vehicle who co-signs such
retail installment contract may be held liable to the full extent of the
deferred payment price notwithstanding such parent or spouse or any other
person listed as an owner has not actually received the motor vehicle
described or identified in the contract and except to the extent such person
other than a seller or holder, signs in the capacity of a guarantor of
collection.
The obligation of such guarantor is secondary, and not primary. The
obligation arises only after the seller or holder has diligently taken all
ordinary legal means to collect the debt from the primary obligor, but has not
received full payment from such primary obligor or obligors, or after the
primary obligor has become insolvent, or service of summons cannot be obtained
on the primary obligor, or it is otherwise apparent that it is useless to
proceed against the primary obligor.
No provisions in a retail installment contract obligating such guarantor
are valid unless:
(1) there appears below the signature space provided | for such guarantor the following: |
"I hereby guarantee the collection of the above | described amount upon failure of the seller named herein to collect said amount from the buyer named herein."; and |
(2) the guarantor, in addition to signing the retail | installment contract, signs a separate instrument in the following form: |
"EXPLANATION OF GUARANTOR'S OBLIGATION
You ........... (name of guarantor) by signing the | retail installment contract and this document are agreeing that you will pay $......... (total deferred payment price) for the purchase of ........... (description of goods or services) purchased by ............ (name of buyer) from ........... (name of seller). |
Your obligation arises only after the seller or | holder has attempted through the use of the court system to collect this amount from the buyer. |
If the seller cannot collect this amount from the | buyer, you will be obligated to pay even though you are not entitled to any of the goods or services furnished. The seller is entitled to sue you in court for the payment of the amount due." |
The instrument must be printed, typed, or otherwise reproduced in a size
and style equal to at least 8 point bold type, may contain no other matter
(except a union printing label) than above set forth and must bear the
signature of the co-signer and no other person. The seller must give the
co-signer a copy of the retail installment contract and a copy of the
co-signer statement.
(Source: P.A. 91-357, eff. 7-29-99.)
Notes of Decisions
Cited in 5
cases, 1994–2002 · leading case: Lee v. Nationwide Cassel, L.P.
Lee v. Nationwide Cassel, L.P. (1996)
“Lee alleged that section 18 of the Motor Vehicle Retail Installment Sales Act (815 ILCS 375/18 (West 1992)) prevents defendant from holding him liable under the contract because he did not actually receive the vehicle and he was not the parent or spouse of a person who actually…”
Taylor v. Trans Acceptance Corp. (1994)
“” 815 ILCS 375/18 (West 1992) (formerly 111.”
Lee v. Nationwide Cassel, L.P. (1995)
“of section 18 of the Illinois Motor Vehicle Retail Installment Sales Act (the Act), 815 ILCS 375/18 (West 1992). Appellants claimed that appellees participated in a scheme designed to misrepresent the extent of liability of certain consumers who sign motor vehicle retail…”
Qualkenbush v. Harris Trust & Savings Bank (2002)
“815 ILCS 375/18 (Section 18). This provision creates a general rule that only the person who-actually receives the car can be held primarily liable, while others can only sign the contract as a “guarantor of collection,” whose obligation is secondary and “arises only after the…”
Lee v. Nationwide Cassel, L.P. (1996)
“" 815 ILCS 375/18 (West 1992). Plaintiffs contend that they are exempt from liability under this section because they did not actually receive the vehicles that were the subject of the contracts, and because they are neither parents nor spouses of their friends who did actually…”
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