On February 12, a federal judge in the U.S. District Court for the Eastern District of California held that a financing contingency clause in a retail installment contract (contract) did not violate the Truth in Lending Act (TILA). The clause provided that the dealership (defendant) could cancel the contract if it could not assign it to a financial institution on terms acceptable to the seller. According to the opinion, the plaintiff signed the contract with the defendant to purchase a car after being told she was approved for financing; however, the defendant later contacted the plaintiff and informed her that it was unable to assign her loan to a third party bank and demanded that she “return to the dealership with a co-signor or surrender the [v]ehicle.” The plaintiff asserted that “she never received a written notice explaining why [the] defendant [had] revoked its extension of credit” or why it had cancelled the contract. Among other things, the plaintiff argued that the defendant’s actions violated (i) TILA when it inserted a seller’s right to cancel provision in the contract, and (ii) a “breach of ‘good faith and fair dealing obligation.’” However, with respect to TILA, the judge found no violation, holding that while TILA requires certain disclosures for the purpose of avoiding the “uninformed use of credit,” it does not prohibit the inclusion of financing contingencies. Here, the contract included all required elements under TILA and the properly disclosed credit terms were not rendered meaningless or invalid just because the dealership reserved a unilateral right to rescind the contract. The judge further dismissed the breach of good faith claim, noting that the defendant was acting within the allowed terms of the right to cancel provision.