## Facts

- Rent-A-Center leased household goods to consumers on short-term, renewable periods with an option to acquire ownership through continued payments or an early purchase option.
- A customer entered a Massachusetts “consumer lease agreement” to rent a used laptop for a weekly charge, renewable each week.
- The agreement stated the customer did not own the laptop unless and until the customer made the total payments required for ownership.
- The customer could terminate at the end of any week by returning the laptop and paying only amounts then due; the contract imposed no obligation to renew or to pay the full value of the laptop.
- The agreement included a purchase option, including an early purchase price tied to a percentage of remaining scheduled rental payments.
- Plaintiffs, on behalf of a putative class, alleged the agreements were disguised credit sales regulated by the Massachusetts Retail Installment Sales Act (RISA); Rent-A-Center contended they were consumer leases regulated by the Massachusetts Consumer Lease Act (CLA).
- A federal district court certified to the Massachusetts Supreme Judicial Court (SJC) the question of which statute governed the described agreement.

## Issues

1. Whether a rent-to-own “consumer lease agreement” that is renewable weekly and freely terminable by the consumer is governed by RISA as a retail installment sale/contract or by the CLA as a consumer lease.
2. Whether an option-to-purchase feature converts such a terminable lease into a transaction imposing the type of deferred-payment indebtedness that triggers RISA.

## Decision

- The SJC answered the certified question that RISA does not apply to the described Rent-A-Center agreement.
- Assuming the statutory predicates are met (consumer-purpose goods and a lessor in the business of leasing), the agreement is governed by the Massachusetts Consumer Lease Act.
- The court emphasized the absence of any contractual obligation to continue payments beyond each short renewal period and the consumer’s ability to return the goods without liability for remaining payments.

## Legal Principles

- RISA targets credit sale transactions in which the consumer is committed to pay a purchase price over time (typically with a finance charge or time-price differential) and is obligated for amounts substantially equivalent to the value of the goods.
- A short-term lease that the consumer may terminate at each renewal point by returning the goods and paying only accrued charges is not a retail installment sale merely because it offers a path to ownership.
- An option to purchase within an otherwise terminable consumer lease does not, by itself, convert the transaction into a RISA-covered retail installment contract.
- When a transaction does not qualify as a retail installment sale under RISA, and it otherwise fits the statutory definition of a consumer lease, the CLA provides the governing regulatory framework.

## Conclusion

The Massachusetts Supreme Judicial Court classified the described rent-to-own contract as a consumer lease, not a disguised retail installment sale, because the consumer was not obligated to continue payments and could terminate weekly by returning the goods with no further liability beyond amounts then due.


Silva v. Rent-A-Center, Inc., 454 Mass. 667, 912 N.E.2d 945 (2009)