Michigan Collections Manager License Practice Test

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What type of information must an installment sales contract provide to buyers?

Seller's business history
Buyer's credit score information
Summary of terms and conditions
Seller's market share data

The correct answer is: Summary of terms and conditions

An installment sales contract must provide a summary of terms and conditions to buyers, as this information is crucial for ensuring that both parties understand their rights and obligations under the agreement. This summary typically includes details such as the purchase price, payment schedule, interest rates, any applicable fees, and the consequences of default. Providing clear terms helps protect the buyer by ensuring that they are fully aware of their responsibilities and what they can expect from the seller. It also aids in compliance with various consumer protection laws, which aim to make sure that all necessary information is presented clearly and transparently. In contrast, including details like the seller's business history, the buyer's credit score, or the seller's market share data would not be relevant to the contractual agreement itself and could distract from the essential aspects of the sales terms that the buyer needs to understand to make an informed decision. Therefore, the focus on summarizing terms and conditions is essential for fairness and clarity in the transaction.