Michigan Collections Manager License Practice Test

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Prepare for the Michigan Collections Manager License Test with flashcards and multiple choice questions. Each question is equipped with hints and detailed explanations to enhance your understanding and readiness.

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What is prohibited in an installment sales contract concerning the seller?

Provisions limiting seller's liability
Clauses waiving buyer's rights against the seller
Conditions for buyer's early payoff
Fees for late payments

The correct answer is: Clauses waiving buyer's rights against the seller

In an installment sales contract, clauses waiving a buyer's rights against the seller are prohibited because such provisions can undermine the legal protections afforded to buyers. The law recognizes that buyers should have certain rights when entering into a sales agreement, including the right to seek recourse if the seller fails to meet their obligations or if there are issues with the quality or delivery of the goods. Allowing a seller to completely waive these rights could create an imbalance in the transaction, heavily favoring the seller and leaving the buyer without adequate protections. Such waivers could also be seen as unfair or deceptive, potentially leading to abuses in contract negotiations. Legally, consumer protection laws exist to ensure that buyers are treated fairly and that they possess recourse in situations of breach or fraud. Because of this reasoning, including clauses that completely eliminate a buyer's rights is against the governing principles that support fair trade and commerce.