In Salvagne v. Fairfield Ford, Inc., 2010 WL 3292967 (S.D.Ohio 2010), the District Court found that use of a “Spot Delivery” contract addendum allowing rescission in the event financing was not secured violated TILA.  The Court denied the dealer’s motion for summary judgment, explaining:


Here, the parties do not dispute that the disclosures made in the RISC satisfy TILA’s requirements for content. Instead, the dispute is whether the Spot Delivery Agreement renders those disclosures meaningless. Plaintiffs argue that the transaction was consummated when they signed RISC 1 and that the change in terms effected by RISC 2 renders the disclosures made in RISC 1 meaningless and illusory. Defendant argues that the terms in RISC 1 were not illusory because Plaintiffs were bound by the terms of RISC 1 until RISC 1 was cancelled by Defendant. Then, Plaintiffs were bound by the terms of RISC 2, a separate contract. Defendant’s position is that a RISC, when merged with the Spot Delivery Agreement, creates a contract subject to a condition subsequent: if financing is secured or the RISC assigned, then the contract is binding on both parties; if not, either party may cancel, and the contract is void. A contract subject to a condition subsequent, Defendant contends, is perfectly permissible under TILA (doc. 54, citing, inter alia, Janikowski v. Lynch Ford, Inc., 210 F.3d 765 (7th Cir.2000); Leguillou v. Lynch Ford, 2000 WL 198796 (N.D.Ill.2000); Chastain v. N.S.S. Acquisition Corp., 2009 WL 1971621 (S.D.Fla.2009)).. . .¶  The Court has reviewed the cases to which Defendant cites and is not persuaded by them.FN1 Instead, the Court finds persuasive the reasoning of the court in Patton v. Jeff Wyler Eastgate, Inc., 608 F.Supp.2d 907 (S.D.Ohio 2007). In Patton, the plaintiffs put forth arguments similar to those present here, that the TILA disclosures in the installment contract they signed were rendered illusory by the spot delivery agreement they signed at the same time. 608 F.Supp.2d at 914. The Patton court noted that the installment contract at issue was a “fully integrated contract that by its own terms was binding upon the parties … at the time it was signed” and that nothing in the installment contact made it contingent on approval or assignment to a third party. Id. at 914-15. In contrast, the spot delivery agreement in Patton allowed the dealership to undo the contract and reclaim the car if the contract was not assigned or financing was not approved by a third party. Id. at 915. In essence, the Patton court found that the installment contract and the spot delivery agreement contradicted each other, and the cancellation right in the spot delivery agreement rendered the disclosures made in the installment contract meaningless. Id.  . . . ¶  At the hearing before the Court, counsel for Defendant expressed frustration with the Court’s questions regarding Defendant’s position that the two documents were merged into one contract and asked, “How could Ford have merged them? Stapled them together?” Clearly, making the documents physically touch would not solve the defects here. Instead, the point is that the RISC itself must, in some meaningful and unequivocal way, alert the consumer that the deal is not final and binding on either party until a lender has agreed to finance the transaction, and, therefore, the terms on the RISC should not be construed as the final terms of the deal. In short, if Ford wishes to impose a condition subsequent on its deals, the RISC must clearly reach out and incorporate the Spot Delivery Agreement, not the other way around.  . . .¶  Finally, the Court finds that the use of the Spot Delivery Agreement to impose a condition subsequent on the deal as outlined in the RISC violates the purpose of TILA because consumers cannot, under this arrangement, ever meaningfully compare credit offers since they cannot know what the actual offer is. In other words, the RISC, standing alone, in no way conditions the sale on financing. On the contrary, it expressly binds the consumer to the purchase of the car on the terms disclosed. The Spot Delivery Agreement, on the other hand, if seen to “modify” the RISC, modifies it by completely undermining it and conditioning the sale on financing. With one hand, the dealership goes through all of the machinations of creating a binding sales contract: securing personal information from the consumer in order to conduct a credit check and to ascertain what terms would be acceptable to the consumer, shopping the package around in a process that can take hours until the moment when the representative emerges from the back room saying, “We have a deal,” then having the consumer sign the RISC with the terms from the “deal.” But with the other hand, the dealership undoes that deal with the Spot Delivery Agreement. TILA was expressly designed to promote the informed use of credit by ensuring that creditors make meaningful disclosures of the terms upon which they will extend credit, which purpose requires that courts liberally construe the statute in favor of the consumer. Baker, 349 F.3d at 864. This purpose is, in short, frustrated by using a Spot Delivery Agreement in the manner present here to rescind the terms of and undermine the disclosures made in the RISC.