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General Motors Acceptance Corp. v. Cahill

375 N.J. Super. 553, 868 a.2d 1078 (App. Div. 2005)

LEASES; AUTOMOBILE—The one day review period that New Jersey law requires be given to automobile lessees may be waived by the lessee.

An automobile lessee sued its leasing company, contending that the lease was void because it did not provide the right to a one-day-review required by New Jersey statute. It sought costs, attorney’s fees, and treble damages against the original lessor. The lessor countered that the lease was valid because it contained the allegedly missing one-day-review right as well as an option to waive that one-day-review, which the lessee had signed.

The lease had a boldface notice next to the signature line saying that the lessee had the right to review the lease for one business day before signing it. The lessee had also signed and initialed a waiver form which acknowledged that the lease terms had been explained, that it was aware of its right to review the lease one business day before signing it, and that it chose to waive that right and sign the lease immediately. In its complaint, the lessee argued that the waiver was invalid because it was not consistent with the one-day right to review.

The Appellate Division held that the waiver option was not inconsistent with the right to review and actually advanced that right. It contained conditions and circumstances by which a lessee could waive the right without violating its purpose since an explanation and notice of vital lease terms were provided. The Court further held that the waiver did not violate the purpose of the right to review. That purpose is to provide consumers with adequate information of the lease’s terms before signing so as to avoid being subjected to a “now or never” tactic by the dealer.

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