§ 307.10. Effect of preapproval.
(a) A consumer contract preapproved by the Office of Attorney General is considered by this Office to comply with the PLA. Preapproval of a contract will be considered by the Office of Attorney General as a good faith effort to comply with section 8(a)(3) of the PLA (73 P. S. § 2208(a)(3)).
(b) Note the limited effect of preapproval under the PLA. Plain language approval of the wording and format of a contract, or any writing required to complete a consumer transaction, does not mean or imply that its contents are approved by the Office of Attorney General. An oral or written reference to plain language approval must be accompanied by the following statement:
‘‘In the opinion of the Office of Attorney General, a preapproved consumer contract meets the Test of Readability under 73 P. S. § 2205 of the Plain Language Consumer Contract Act. Preapproval of a consumer contract by the Office of Attorney General only means that simple, understandable and easily readable language is used. It is not an approval of the contents or legality of the contract.’’
APPENDIX A
APPLICATION FOR CONTRACT PREAPPROVAL
You must complete this Application to obtain preapproval of a consumer contract under Pennsylvania’s Plain Language Consumer Contract Act.
1. Identify the person submitting the contract for preapproval:
1. A SEPARATE APPLICATION FOR EACH CONTRACT.
2. THREE (3) COPIES OF EACH CONTRACT WITH REQUIRED LANGUAGE UNDERLINED IN RED.
TO: Office of Attorney General Bureau of Consumer Protection 14th Floor, Strawberry Square Harrisburg, Pennsylvania 17120 Attn: PLA
APPENDIX B
TEST OF READABILITY
The TEST OF READABILITY is a checklist based on section 5 of the PLA (73 P. S. § 2205). A checkmark indicates the contract cannot be preapproved under the Plain Language Consumer Contract Act. On the document you submitted, examples indicating where these problems occur are listed by number.
LANGUAGE GUIDELINES
1a. Does not use short words. b. Does not use short sentences. Guide: Sentence average 25 words or less. c. Does not use short paragraphs. Guide: Paragraph average 60 words. 2. Does not use active verbs. 3. Uses technical legal terms other than commonly understood legal terms. 4a. Does not use familiar vocabulary. b. Uses Latin and foreign words or other words which require reliance upon an obsolete meaning. c. Does not rephrase legal jargon and redundant words in simple language. 5. Does not define words by using commonly understood meanings. 6a. Does not use personal pronouns, the actual or shortened names of the parties, the terms ‘‘seller’’ and ‘‘buyer’’ or the terms ‘‘lender’’ and ‘‘borrower.’’ b. Does not use names or pronouns consistently. 7. Does not use sentences that contain only one condition. 8. Does not limit cross references to brief and clear description of item to which cross reference is made. 9a. Uses sentences with double negatives. b. Uses exceptions to exceptions. VISUAL GUIDELINES 10a. Does not use easy to read type size. b. Does not use line length that makes the contract easy to read. c. Does not use column width that makes the contract easy to read. d. Does not use margins that make the contract easy to read. e. Does not use adequate space between lines. f. Does not use adequate space between paragraphs. 11. Does not use boldface type for caption sections and subsections. 12. Does not use ink that provides a sharp contrast with the paper. CONSUMER RESTRICTIONS 13. Does not contain a general description of property that may be taken or affected because of a security interest or contract if consumer fails to meet terms of contract. 14. Does not contain contract waivers of a consumer’s rights in residential leases. 15. Statement of consumer restrictions does not appear immediately following Truth in Lending Act disclosures made on the contract.
APPENDIX C
ILLUSTRATIONS FOR TEST OF READABILITY
These illustrations provide guidance as to how the Test of Readability may apply to a contract.
I. ORGANIZATION
Use headings and subheadings to show the order in which information is presented and to identify the content of each section.
These headings provide few clues about organization and document content:
We agree to . . .
You agree to . . .
Both of us agree to . . .
You also agree to . . .
Both of us also agree to . . .
These headings identify and locate useful information:
Borrower’s promise to pay
Interest
Monthly payments
Borrower’s right to make prepayments
How much may I prepay without penalty?
What is the penalty if I pay more?
Charges for late payment
II. LANGUAGE AND STYLE
A. IDENTIFICATION OF PARTIES
Use simple names.
Define the names and pronouns.
Use names and pronouns consistently.
In the following example, the consumer is called ‘‘I’’ in one paragraph, then referred to as ‘‘borrower’’ in another paragraph, with no explanation:
B. EXPLAIN AT THE BEGINNING THAT THE FORM IS A CONTRACT BETWEEN PARTIES.
A legalese start of a contract:
This agreement, made the first day of July, 1994, between Sara Smith, the party of first part, and John Jones, the party of the second part. Witnesseth;
Clearer explanation:
July 1, 1994
This is a lease. Sara Smith is the landlord. John Jones is the tenant.
C. USE WORDS THAT CONVEY MEANINGS CLEARLY AND DIRECTLY.
USE DO NOT USE begin commence or initiate seller vendor buyer vendee cancel rescind end termination under pursuant to if in the event that give or make render before prior to after subsequent to sign execute person signing below undersigned postpone defer take back repossess responsible liable D. USE PRESENT TENSE AND ACTIVE VOICE WHENEVER POSSIBLE.
PASSIVE
If the outstanding balance is prepaid in full, the unearned finance charge will be refunded.
Buyer is obligated to make all payments hereunder.
Membership fees paid prior to the opening of the club will be placed in trust.
ACTIVE
If I pay the whole amount before the due date, you will refund the unearned portion of the finance charge.
I will make all payments as they become due.
If I pay membership fees before the club opens, the club will put the money in a trust account.
E. USE FAMILIAR VOCABULARY.
Rephrase legal jargon and redundant words into simple language.
This sentence obscures the meaning with jargon:
Purchaser certifies that no oral or written statements, promises, representations or guarantees, other than those herein contained, have been made in relation to this agreement.
This sentence clarifies:
This contract contains all the agreements between the BUYER and the SELLER. By signing this contract, both the BUYER and the SELLER agree to do what the contract says. Nothing which the BUYER has said orally to the SELLER or the SELLER has said orally to the BUYER changes the terms of this contract.
F. DEFINE TECHNICAL OR LEGAL TERMS THAT ARE NOT USED IN THE ORDINARY SENSE.
Example:
Any payment made before it is due is called a ‘‘prepayment.’’
G. CLARIFY CONDITIONS AND EXCEPTIONS.
Do not treat rights or responsibilities of the parties as conditions or exceptions.
For example, in this contract the Seller’s right to hire an attorney is treated as a condition:
If the Buyer defaults and the Seller commences collection through an attorney, the Buyer will be liable for attorney’s fees.
This language clarifies the Seller’s right to hire an attorney:
If the BUYER is behind in making payments, the SELLER may:
1. Hire an attorney to collect the money.
AND
2. Charge the BUYER for the attorney’s fees.
III. VISUAL SUGGESTIONS
A. Use margins adequate for ease of reading.
B. Use easy to read type size.
C. Use adequate space between lines and paragraphs.
D. Use boldface type for caption sections and subsections.
E. Use line length that makes the contract easy to read.
F. Use column width that makes the contract easy to read.
IV. GENERAL PRACTICE POINTERS
A. Use short words, short sentences and short paragraphs.
B. Use active voice.
C. Eliminate legalese such as: HEREBY, THEREOF, HERETOFORE, THEREAFTER.
D. Use familiar vocabulary.
E. Rephrase legal jargon into simple language.
F. Use names or pronouns consistently.
G. Define words by using commonly understood meanings.
Source The provisions of the Appendix C adopted March 31, 1995, effective April 1, 1995, 25 Pa.B. 1167.
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