Illinois Compiled Statutes
815 ILCS 405/19 (2026)
Each person, other than a seller or holder, who signs a retail installment contract, retail charge agreement, or any other agreement or instrument in a retail installment transaction may be held liable only to the extent that he actually receives the goods sold or services furnished in the retail installment transaction, except that a parent or spouse who co-signs such contract, agreement or instrument may be held liable to the full extent of the deferred payment price notwithstanding such parent or spouse has not actually received the goods sold or services furnished under such retail installment transaction 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 405/19)
(from Ch. 121 1/2, par. 519)
Sec. 19.
Each person, other than a seller or holder, who signs a retail
installment contract, retail charge agreement, or any other agreement or
instrument
in a retail installment transaction may be held liable only to the extent
that he actually receives
the goods sold or services furnished in the retail installment transaction,
except that a parent
or spouse who co-signs such contract, agreement or instrument may be held
liable to the full extent of the deferred payment price notwithstanding such
parent or
spouse has not actually received the goods sold or services furnished under
such retail
installment transaction 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 reduced his claim against the
primary obligor and
execution has been returned unsatisfied, or after the primary obligor
has become insolvent or it is otherwise apparent that it is useless
to proceed against him.
No provision in a retail installment contract obligating such guarantor is 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) unless 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, and 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 shall give the
co-signer a copy of the retail installment contract and a copy of the
co-signer statement.
A person actually receives the goods sold or services furnished in a
retail installment transaction when he or she physically possesses the goods or
benefits from the goods or services or when someone authorized by the person
physically possesses the goods or benefits from the goods or services.
A person's separately signed written authorization is conclusive proof of that
person actually receiving the goods sold or services furnished in any action by
or against an assignee of the contract. Notwithstanding the provisions of
this paragraph, a person signing a retail installment contract as a guarantor
is
liable only pursuant to the provisions in this Act relating to guarantors.
(Source: P.A. 89-650, eff. 1-1-97.)
Notes of Decisions
Cited in 1
case, 1994–1994 · leading case: Taylor v. Trans Acceptance Corp., 641 N.E.2d 907 (Ill. App. Ct. 1994).
Taylor v. Trans Acceptance Corp., 641 N.E.2d 907 (Ill. App. Ct. 1994). “” (815 ILCS 405/19 (West 1992) (formerly Ill.”
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