• 18
  • November
    2011

In our personal and well as professional lives most of us expect to generally have the freedom to enter into contracts so long as we determine the agreement to be fair. Of course, there are many caveats to this general rule, deals should not be a result of fraud or misrepresentation, children do not have the capacity to enter into binding contracts, and that the purpose of the contracts should not be illegal.

But as you know, there are often many other layers of government regulations that attempt to control the ways in which individuals enter into contracts, particularly those with financial institutions. These regulations are generally well intended, but some people may question whether they are actually an attempt to put the government's judgment about what is in our best interest ahead of our own.

Yesterday, the Atlanta Journal Constitution reported on a situation in which a borrower has brought a lawsuit against a lender after the borrower fell behind on the loan and his vehicle was repossessed. The lawsuit claims that the loan was void from the outset as a violation of the Military Lending Act.

There is no indication in the news reports on this lawsuit that the borrower ever requested a lower rate based on his status, or that he found the terms of the $3,000 loan otherwise unacceptable. Of course, regardless of the willingness of both parties to enter into an agreement for a loan, financial institutions must take care to ensure that their activities and procedures are compliant with all applicable laws and regulations.

Source: The Atlanta Journal Constitution "Soldier sues title lender, claiming abusive practices," Nov. 17, 2011