Victorian Consolidated Legislation

Credit Act 1984 - SECT 70

Variation of credit sale contracts and loan contracts

70. Variation of credit sale contracts and loan contracts



(1) The credit provider and the debtor under a credit sale contract or a loan
contract may agree to vary the terms of the contract in relation to, or to
payment of, the amount owing under the contract if-

   (a)  the outstanding balance of the amount financed at the date of the
        variation is not increased by the variation or is increased by the
        variation by reason only of the addition of an amount referred to in
        subsection (3);

   (b)  the annual percentage rate applicable to the contract as varied does
        not exceed the lesser of-

   (i)  the annual percentage rate applicable to the contract immediately
        before the variation; and

   (ii) the annual percentage rate prescribed by the regulations for the
        purposes of this subparagraph;

   (c)  a deferral charge is not made in respect of the variation; and

   (d)  the agreement is in writing signed by the credit provider and the
        debtor and specifies (where applicable)-

   (i)  the varied terms of repayment;

   (ii) the amount by which the amount financed is increased;

   (iii) the amount by which the credit charge is increased by reason of the
        variation;

   (iv) the amount of default charges and deferral charges outstanding at the
        date of the variation;

   (v)  the amount of stamp duty and legal fees payable to a legal
        practitioner (not being the credit provider or an employee of the
        credit provider) for preparation of the agreement;

   (vi) the additional amount payable under the contract by reason of the
        variation; and

   (vii) such other matters as may be prescribed.

(2) The regulations may prescribe the manner in which matters required by
paragraph (d) of subsection (1) to be specified in an agreement are to be so
specified, whether by the use of a prescribed form or otherwise.





(3) The following are the amounts by which the outstanding balance of the
amount financed under a credit sale contract or a loan contract may be
increased by a variation under subsection (1)-

   (a)  where, under the credit sale contract, or loan contract, the premium
        under a contract of insurance or compulsory insurance entered into in
        relation to the credit sale contract or loan contract or a regulated
        mortgage relating to the contract was included in the amount financed
        under the credit sale contract or loan contract-a premium payable
        under that contract of insurance or compulsory insurance in relation
        to a subsequent period not exceeding twelve months;

   (b)  where, under the credit sale contract or loan contract, registration
        fees relating to goods and in respect of a particular period were
        included in the amount financed under the credit sale contract or loan
        contract-registration fees relating to those goods in respect of a
        subsequent period;

   (c)  such other amounts as may be prescribed.

(4) Where a credit provider enters into an agreement referred to in subsection
(1) he shall, not later than fourteen days after the agreement is entered
into, give the debtor a copy of the agreement.

(5) Notwithstanding any other provision of this Act, an agreement to vary a
contract in accordance with this section is not a loan contract.





(6) Where a variation to which this section applies is made to the terms of a
credit sale contract or a loan contract, a guarantor under a contract of
guarantee in respect of the obligations of the debtor under the contract is
not liable in respect of the contract for an amount exceeding the amount for
which, but for the variation, he would have been liable unless the credit
provider, not later than fourteen days after the variation was made, gave the
guarantor a notice in writing of the variation.

(7) This section does not apply to or in respect of a variation-

   (a)  if section 37, 69 or 71 applies to or in respect of the variation; or

   (b)  by reason only that, as a result of a variation, the amount due to a
        credit provider is satisfied or reduced.