Expert: Creditwrench - 6/27/2008

Question
QUESTION: Everything seems to say the SOL in OK is 3 years for credit cards.  I see the court calls credit card agreements "revolving lines of credit".  However I have seen some stuff that suggests creditors will try to assert a 5 year SOL as a written contract.  Which is accurate and what is the argument to make in court if the creditor asserts a 5 year SOL?  Thanks in advance.

ANSWER: The statute that governs is 12 OS 95 Subsection 1. It just so happens that I have at least two cases here in Oklahoma that hinge on that very question so I went down to the law library at the state capital Tuesday  afternoon and researched the matter a bit more.

The law was first passed in 1910 and has been modified two or three times since then. Don't remember the exact years in which modifications were made but that's not really important since section 1 has never been changed in any way.

I've seen lots of references to the supposed 3 year statute so if it exists I sure would like to know what other statute says 3 years. Title 12 states that it applies to all contracts and agreements written or verbal.

If some other law changes that I sure would appreciate knowing what statute does that.

Bill Bauer
405-684-9297
405-227-9423

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---------- FOLLOW-UP ----------

QUESTION: In looking at case law, it appears to me that to be cosidered a true "contract", all of the terms must be contained in the four corners of the contract document, or in the oral agreement.  Open ended/revolving accounts are referred to as having a three year SOL, however I have not found a true credit card case on point.  

There are a couple cases involving Discover Card that the credit arrangement is not called a contract but is specifically identified as an open ended/revolving account.  Then in other cases this type of account is said to have a 3 year SOL.  However those cases involve a credit account at a store, or a card from a store like Sears.  The 3 year SOL was to apply, but did not because the was agreement was used to purchase goods directly from the creditor, therefore it fell over into another category governing SOL on where purchasing goods from the creditor has a longer SOL.  But on a general credit card, there is no privity between the creditor and the debtor and any goods.  And obviously it is used for all types of things in addition to just goods.  Therefore it would seem to be controlled by the 3 year SOL.

Additionally, I would say that the specific federal definitions (TILA and what not), and state definitions were specifically made to differentiate open ended/revolving credit agreements from true contracts, and that it's disengenious to go back and try to now call open ended credit accounts contracts, especially if ALL of the terms and provisions in perpetuity are not spelled out. What do you think?

Answer
I can see that you are a pretty good researcher and have covered just about all the bases except one and that is that even under OS 14a it still comes back to the fact that every definition I can find in Oklahoma Statutes says that the 3 year statute of limitations applies to oral contracts. I can't find any place where a credit card agreement is considered to be an oral contract or agreement.

I seriously doubt that they can be considered oral agreements since a written agreement is sent to each and every card holder.

I really, really hate disagreeing with you and I dearly wish you would or could prove me wrong. (LOL)

I want to prove a 3 year statute of limitations applies to credit cards in Oklahoma just as much as you obviously want to. So please, please prove me wrong if you can.