                     United States Court of Appeals,

                              Fifth Circuit.

                              No. 94-60754.

               Juanita B. FAIRLEY, Plaintiff-Appellant,

                                       v.

     TURAN-FOLEY IMPORTS, INC., d/b/a Turan-Foley Mitsubishi,
Defendant-Appellee.

                              Oct. 3, 1995.

Appeal from the United States District Court for the Southern
District of Mississippi.

Before E. GRADY JOLLY and              BENAVIDES,        Circuit    Judges,    and
FITZWATER*, District Judge.

      E. GRADY JOLLY, Circuit Judge:

          Congress designed the Truth-in-Lending Act ("TILA"), 15

U.S.C. § 1601 et seq., to protect consumers from inaccurate and

unfair credit practices. Juanita Fairley took advantage of the Act

and   sued   Turan-Foley    Imports,       Inc.    ("Turan-Foley"),     alleging

violations of the TILA and state law against misrepresentation

related to Fairley's purchase of a car.                 Her financing agreement

listed 8.5 percent as the annual percentage rate, when the actual

rate was 11.75 percent annually.            When she took possession of the

car, she was also under the impression that she had obtained credit

life and disability insurance, as well as an extended warranty.

After     denying   Turan-Foley's   motion        for   summary    judgment,   the

district court, acting on a motion for reconsideration, found that

because no contract existed between the parties, it lacked subject

      *
      District Judge for the Northern District of Texas, sitting
by designation.

                                       1
matter jurisdiction over the case, and subsequently dismissed the

case.   Fairley appealed.   Contrary to the district court's action,

we believe this is the type of case for which Congress tailored the

TILA.   For the reasons explained below, we hold that the district

court erred when it determined that a contract between the parties

did not exist under Mississippi law, and, thus, the district court

erred when it dismissed the case for lack of subject matter

jurisdiction.      Accordingly, we reverse and remand for further

consideration.

                                  I

     This case comes to us in a rather unusual posture.   A thorough

discussion of the facts and procedural history therefore will help

to explain the result we reach today.

     On July 24, 1992, Juanita Fairley went to Turan-Foley to shop

for a new automobile. Finding a 1992 Mitsubishi Eclipse sports car

that she liked, Fairley completed and signed a credit application

form from General Motors Acceptance Corporation ("GMAC") that had

been given to her by a Turan-Foley finance and insurance manager,

Thomas Matherne.    Matherne promised Fairley a competitive interest

rate of 8.5 percent.      Wishing to check her credit union for a

better interest rate, Fairley left the dealership.        Matherne,

however, called Fairley before she had time to check other rates

and convinced her to return to Turan-Foley to see what he could

offer her through GMAC.

     On July 27, 1992, Fairley returned to Turan-Foley and spoke

with Matherne and Jimmy Yelverton, the general manager of the


                                  2
dealership.    Fairley told them that she wanted her payments to be

between $250 and $267 per month for sixty months, and that she

wanted credit life and disability insurance, as well as an extended

warranty.    She took the Eclipse for a test drive, and signed forms

for credit life and disability insurance, an application for a

certificate of title, and a sheet stating that Turan-Foley would

install air conditioning and provide other services (the "We owe"

document).      The   record   also   indicates   that   Fairley   made   a

downpayment on the car in the amount of $1,000, which was received

by the dealership on July 29.         Fairley did not take the car home

after the July 27 visit, but instead arranged to pick it up on

Friday, July 31.

     When Fairley arrived to claim the car on Friday, she spoke

with Matherne and reminded him that they still had to complete an

agreement regarding financing.        Matherne told her that it was all

taken care of and that a copy was in the glove compartment.          When

Fairley examined the supposed agreement, she found that it was not

satisfactory for several reasons.         First, the piece of paper that

was called an agreement by Matherne was actually a partial copy of

a finance agreement;     that is, the lower portion of the page was

missing.     Second, this lone piece of paper was not what Fairley

anticipated as a contract for the sale of the car.          She expected

the contract to be in a "pack" of documents.        Third, the space on

the agreement where the annual percentage rate and the finance

charge were located was completely covered by a white sticker, so

that the area was blank.       When Fairley confronted Matherne with


                                      3
these shortcomings and demanded a complete agreement, Matherne

first told her that he could not give her the contract because, as

it was late on a Friday afternoon, everything was already locked

for the evening.      When this information did not appease her, he

agreed to write in the area reserved for the annual percentage rate

and the finance charge that the annual percentage rate was 8.5

percent for 60 months, he noted on the paper that the original

contract could be obtained on Monday, August 3, and he signed this

notation.   Despite Matherne's assurances that everything was okay,

Fairley was bothered by the fact that she had not actually signed

what she considered to be a contract, the financing agreement.

     On Monday, August 3, 1992, Fairley tried repeatedly by phone

to contact Matherne, but he could not be reached.                        She did,

however, leave a message that she wanted her contract.                      After

several unsuccessful attempts to reach Matherne that week, Fairley

was phoned by a representative of the dealership on Saturday,

August 8, about returning to Turan-Foley to sign papers.                  Fairley

could not go to the dealership at that time because she was about

to travel out of town for the remainder of the weekend, but she

told the representative that she wanted the papers so that she

could   consult   a   lawyer    about       the    transaction.     During    the

conversation, the representative said that he did not want to give

the papers to her if she planned to visit a lawyer, but that she

should still come to the dealership to sign everything.

     While Fairley was away for the weekend, representatives of

Turan-Foley   paid    several    visits       to    her   family   and   friends,


                                        4
harassing them and demanding that Fairley sign the papers.                           On

Monday, August 10, after returning from her trip, Fairley consulted

a lawyer about the situation. The attorney recommended that she go

to the dealership and obtain copies of all the documents in her

file so that the attorney could examine them before Fairley signed

the documents. When Fairley and a neighbor visited the dealership,

Yelverton, the general manager of the dealership, told Fairley that

everything was okay because Turan-Foley had her signature on a

financing    contract    with    Mitsubishi,           dated   July      27.   Fairley

immediately protested that she had never signed a contract with

Mitsubishi, and declared the signature a forgery when Yelverton let

her look at the contract.        Yelverton refused to give Fairley a copy

of the signed contract, and he asked her to leave.1

     In August, the first payment on the car became due.                       Fairley

hand-delivered    to    Yelverton      a       check    payable     to    Turan-Foley.

Yelverton first accepted the check, but when he noticed that the

payee was Turan-Foley, he returned the check to Fairley's attorney.

Fairley   sent   the    check    and   all          future   payments     directly   to

Mitsubishi    Credit     Corporation           in    Casselberry,     Florida,    and,

according to the record, has never missed a payment.                           Fairley

eventually    obtained     a    copy   of        the    financing     contract    from

Mitsubishi, and learned that she was being charged the annual

percentage rate of 11.75 percent rather than 8.5 percent, that she


     1
      The record indicates that the retail installment contract
was assigned to Mitsubishi Credit Corporation as early as July 30
because Turan-Foley received payment for the car from Mitsubishi
on that date.

                                           5
had no disability nor credit life insurance coverage, and that she

had not received an extended warranty on the car.

       Fairley soon filed a complaint in federal district court

alleging violations under the Truth-in-Lending Act, and a state

claim of fraudulent inducement into the transaction.                   After some

discovery, Turan-Foley filed a motion for summary judgment.                     The

district court denied the motion, finding that genuine issues of

material      fact    existed.      Turan-Foley    then    filed   a   motion    to

reconsider the denial of summary judgment or, in the alternative,

to    dismiss    for    lack   of   subject     matter    jurisdiction.        Upon

reconsideration, the district court found that, because Fairley

never signed a contract, she was not contractually obligated to

purchase the vehicle under Mississippi law. Fairley v. Turan-Foley

Imports, Inc., 864 F.Supp. 4, 6 (S.D.Miss.1994). Relying on Jensen

v. Ray Kim Ford, Inc., 920 F.2d 3 (7th Cir.1990), the district

court found that, because there was no contract under state law,

the    TILA     was    inapplicable.          Fairley,    864   F.Supp.   at     7.

Accordingly, the district court found that there remained no basis

for jurisdiction over the state claim of misrepresentation and

dismissed the suit.        Id.

       On appeal, Fairley argues that a contract was consummated

under Mississippi law.           We agree and reverse and remand for trial.

                                         II

        From the district court's memorandum order, it is unclear

whether it dismissed the case by reconsidering and granting Turan-

Foley's motion for summary judgment, or by granting the defendant's


                                         6
motion to dismiss for lack of subject matter jurisdiction.                   In any

event,   we   review   de   novo   the       district   court's    action.     See

Musslewhite v. State Bar of Texas, 32 F.3d 942, 945 (5th Cir.1994),

cert. denied, --- U.S. ----, 115 S.Ct. 2248, 132 L.Ed.2d 256 (1995)

(de novo review of Fed.R.Civ.P. 12(b)(1) motion); Little v. Liquid

Air Corp., 37 F.3d 1069 (5th Cir.1994) (en banc) (de novo review of

Fed.R.Civ.P. 56 motion for summary judgment).

                                         A

                                     (1)

       The purpose of the TILA is to protect the consumer from

inaccurate and unfair credit practices, and "to assure a meaningful

disclosure of credit terms so that the consumer will be able to

compare more readily the various credit terms available to him and

avoid the uninformed use of credit."              15 U.S.C. § 1601(a).        "The

TILA   reflects   a    transition    in       congressional       policy   from   a

philosophy of "Let the buyer beware' to one of "Let the seller

disclose.'     By erecting a barrier between the seller and the

prospective purchaser in the form of hard facts, Congress expressly

sought "to ... avoid the uninformed use of credit.' "                 Mourning v.

Family Publications Serv. Inc., 411 U.S. 356, 377, 93 S.Ct. 1652,

1664, 36 L.Ed.2d 318 (1973).         To that end, Congress, through the

Act, gave the Federal Reserve Board the "authority normally given

to administrative agencies to promulgate regulations designed to

"carry out the purposes of the Act.' "             Mourning, 411 U.S. at 365,

93 S.Ct. at 1659.      The language of the Act's enabling provision

also emphasized the Board's authority to prevent evasion of the


                                         7
rules.   Id. at 371, 93 S.Ct. at 1661.    Congress has, therefore,

"delegated expansive authority to the Federal Reserve Board to

elaborate and expand the legal framework governing commerce in

credit." Ford Motor Credit Co. v. Milhollin, 444 U.S. 555, 559-60,

100 S.Ct. 790, 794, 63 L.Ed.2d 22 (1980).

     Accordingly, the Board of Governors of the Federal Reserve

System promulgated Regulation Z to implement the TILA.    12 C.F.R.

§ 226.1(a).   A creditor is required by Regulation Z to make certain

disclosures to the consumer, "clearly and conspicuously in writing,

in a form that the consumer may keep."    12 C.F.R. § 226.17(a)(1).

Regulation Z sets out certain guidelines for creditors to follow

when disclosing the amount financed, the finance charge, and the

annual percentage rate to the consumer and demands that these

disclosures be accurate.   12 C.F.R. §§ 226.18, 226.22.

     To promote the Act's purpose of protecting consumers, our

court has made clear that creditors must comply strictly with the

mandates of the TILA and Regulation Z.

     Only adherence to the strict compliance standard will promote
     standardization of terms which will permit consumers readily
     to   make  meaningful    comparisons  of   available   credit
     alternatives.   Strict compliance does not necessarily mean
     punctilious compliance if, with minor deviations from the
     language described in the Act, there is still a substantial,
     clear disclosure of the fact or information demanded by the
     applicable statute or regulation.

Smith v. Chapman, 614 F.2d 968, 971 (5th Cir.1980) (citations

omitted).   Consistent with its purpose, the statute is meant to be

construed liberally in favor of the consumer.     Cody v. Community

Loan Corp., 606 F.2d 499, 505 (5th Cir.1979), cert. denied, 446

U.S. 988, 100 S.Ct. 2973, 64 L.Ed.2d 846 (1980).       Even so, the

                                  8
"remedial    scheme        of    TILA    is        designed    to      deter   generally

illegalities which are only rarely uncovered and punished, and not

just to compensate borrowers for their actual injuries in any

particular case."       Williams v. Public Finance Corp., 598 F.2d 349,

356 (5th Cir.1979).

                                          (2)

        We look to Regulation Z to determine whether Fairley's claim

is one to which the TILA should apply.                        "Regulation Z obliges

creditors to make the statutorily-mandated disclosures before the

transaction is consummated."              Davis v. Werne, 673 F.2d 866, 869

(5th    Cir.1982)     (internal         quotation        and     footnote      omitted).

Consummation is defined under Regulation Z as "the time that a

consumer becomes contractually obligated on a credit transaction."

Clark   v.   Troy    and    Nichols,      Inc.,       864     F.2d    1261,    1264    (5th

Cir.1989);    12 C.F.R. § 226.2(a)(13).                State law determines when a

contractual obligation is created that binds the consumer to the

credit terms.       Clark, 864 F.2d at 1264;             12 C.F.R. § 226, Supp. 1,

Official Staff Interpretations, Section 226.2(a)(13).

                                              B

        Because "consummation" is defined by Regulation Z as the

point under     state      law   when    a        "contractual       obligation   on   the

consumer's part is created," our focus in this analysis is on

Fairley. Thus, "[w]e must examine the transaction through the eyes

of the consumer."           Cody, 606 F.2d at 505.                     The question of

consummation    of    a     contract     in        Mississippi       is   determined    by

statutory and common law.               Mississippi has adopted the Uniform


                                              9
Commercial Code, and whether there is an enforceable contract that

satisfies the statute of frauds is governed by Miss.Code Ann. § 75-

2-201 (1981).   Generally, a contract for the sale of goods for $500

or more is not enforceable unless there is some writing. Miss.Code

Ann. § 75-2-201(1).      "A writing must meet three requirements to

satisfy the statute of frauds:        1) the writing must be sufficient

to indicate that a contract for sale has been made between the

parties, 2) the writing must be signed by the party against whom

enforcement is sought, and 3) the writing must specify a quantity."

Migerobe, Inc. v. Certina USA, Inc., 924 F.2d 1330, 1333 (5th

Cir.1991)    (internal   quotations    and   citations   omitted).   "The

statute of frauds can be met through the integration of several

documents, each of which alone might not be sufficient to meet

these three requirements."     Id.    A contract that does not meet the

three requirements but is valid in other respects is enforceable

"if the party against whom enforcement is sought admits in his

pleading, testimony or otherwise that a contract for sale was

made."   Miss.Code Ann. § 75-2-201(3)(b).       Further, a contract that

does not satisfy the statute of frauds is nevertheless enforceable

"with respect to goods for which payment has been made and accepted

or which have been received and accepted."        Miss.Code Ann. § 75-2-

201(3)(c).

     In making the determination that Fairley, the consumer, had

become contractually obligated, we find that additional sections of

the Mississippi Code are relevant to the facts in this case.

Section 75-2-204 states that "a contract for the sale of goods may


                                      10
be made in any manner sufficient to show agreement, including

conduct by both parties which recognizes the existence of such a

contract."    Additionally, section 75-2-607 states that the effect

of acceptance of goods is that the buyer must pay at the contract

rate for any goods accepted and acceptance precludes rejection of

the goods accepted.        Miss.Code Ann. § 75-2-607 (1972).        Finally,

"Acceptance of goods occurs when the buyer (a) after reasonable

opportunity to inspect the goods, signifies to the seller that the

goods are conforming or that he will take or retain them in spite

of their nonconformity;         ... or (c) does any act inconsistent with

the seller's ownership."         Miss.Code Ann. § 75-2-606.

     Whether an enforceable contract exists and whether defenses to

the enforceability of that contract exist should not be confused.

"Questions of the validity, enforceability, and construction of

contracts—whether the parties have satisfied the law's formal

requisites—are committed to the court as distinguished from the

trier of facts."     Leach v. Tingle, 586 So.2d 799, 801 (Miss.1991).

While in     this   case   we   must   determine   whether   an   enforceable

contract exists, we pass no judgment on whether any defenses may

exist to the contract.

                                        C

                                       (1)

      Turning to the case before us, we first examine whether the

integration of the writings is sufficient to meet the requirements

of the statute of frauds, and thus sufficient to constitute a

contract between the parties.          To make this determination, we look


                                        11
to the various documents of record:           Fairley's signed check for

$1,000 accepted by Turan-Foley as a downpayment;                  the extended

warranty agreement with Turan-Foley signed by Fairley, requiring

her to pay $300 for coverage on a 1992 Eclipse with a specified

vehicle number;          the application for a certificate of title,

describing the buyer, seller, and specific automobile, signed by

Fairley and Matherne;       the Turan-Foley "We owe" document signed by

Fairley     and   a   dealer    representative;       and    the    record    of

Mitsubishi's payment of the balance due on the car, indicating that

the financing agreement had been assigned to Mitsubishi Credit

Corporation. Finally, Matherne signed the first retail installment

contract that Fairley received the day she picked up the car.                 On

this document, Matherne noted that Fairley would receive an 8.5

annual percentage rate, when the figures on the document are, in

fact, consistent with financing at an 11.75 annual percentage rate.

In sum, because the dealer accepted Fairley's downpayment on the

car, and because the integration of the documents, various of which

the parties executed jointly or individually, indicate there was

agreement on the specific vehicle for sale, the car's retail price,

the   interest    rate    and   various   coverages   in    the   eyes   of   the

consumer,2 we hold that the parties had entered into an enforceable

contract.

                                      (2)


      2
      See Cody v. Community Loan Corp., 606 F.2d 499, 505 (5th
Cir.1979), cert. denied, 446 U.S. 988, 100 S.Ct. 2973, 64 L.Ed.2d
846 (1980) ("[W]e must examine the transaction through the eyes
of the consumer.").

                                      12
          Furthermore, the parties' actions in this particular case

support     our    conclusion         that    Fairley      had    incurred         contractual

obligations.        "A contract for sale of goods may be made in any

manner sufficient to show agreement, including conduct by both

parties     which       recognizes      the    existence         of   such     a    contract."

Miss.Code Ann. § 75-2-204 (1972).                     Such a contract, though not

satisfying        the    requirements         of     the    statute       of       frauds,     is

nonetheless enforceable with respect to those goods for which

payment has been made and accepted.                         Miss.Code Ann. § 75-2-

201(3)(c). Fairley and Matherne had discussed financing the car at

an 8.5 annual percentage rate along with insurance and warranty

coverages and had arrived at an oral contract.                        The car and initial

payments on        it    were    delivered      and     accepted,        and       Fairley     has

continued     to    make        monthly      payments      on     her    car       faithfully.

Furthermore,        Turan-Foley's            quick    assignment         of        the    retail

installment       contract       to    Mitsubishi       Credit        Corporation         before

Fairley even picked up the car is an act inconsistent with the

dealership's argument that it did not enter into a contract for the

sale of the car.            Turan-Foley's argument, that the absence of

Fairley's signature on either financing agreement indicates there

was   no    consummation,         is   fully       inconsistent         with   its       conduct

indicating the sale of the car at a specified interest rate, and is

not well     taken.3        Thus,      the    conduct      of     the    parties         in   this

      3
      Turan-Foley, furthermore, asserted for the first time at
oral argument that because Fairley did not sign the contract, no
contract exists under Mississippi's Motor Vehicle Sales Finance
Act. Miss.Code Ann. §§ 63-19-1 et seq., 63-19-31(1)(a). Because
Turan-Foley did not make this argument at the district court, we

                                              13
particular case, indicating intent and understanding, viewed in

combination with the various writings between the parties, fully

satisfies us that the jurisdictional requirements of the Act and

its implementing regulations have been met.

                                          III

         Because we hold that a contract between the parties for the

sale of the car was consummated, the district court erred in

finding to the contrary.       The district court, moreover, erred when

it found that it did not have subject matter jurisdiction to

consider    the    TILA   claims,    and,       therefore,   we   reverse.4   See

Williamson v. Tucker, 645 F.2d 404, 415 (5th Cir.), cert. denied,

454 U.S. 897, 102 S.Ct. 396, 70 L.Ed.2d 212 (1981) ("Where the

defendant's       challenge   to    the   court's     jurisdiction    is   also   a

challenge to the existence of a federal cause of action, the proper



will not consider it on appeal. Earvin v. Lynaugh, 860 F.2d 623,
627-28 (5th Cir.1988), cert. denied, 489 U.S. 1091, 109 S.Ct.
1558, 103 L.Ed.2d 861 (1989).
     4
      The district court's reliance on Jensen v. Ray Kim Ford,
Inc., 920 F.2d 3 (7th Cir.1990), was misplaced. The enforceable
contract in the case before us is the contract created by the
integration of the several documents discussed in section II,
infra. Fairley relies on this transaction for creation of her
obligation, not on the second, allegedly forged retail sales
document. In Jensen, the plaintiffs relied upon a second, forged
document as a basis for their allegations of TILA violations.
Because a forged note under the applicable state law, Illinois,
was void, the Jensen Court found that the plaintiffs were not
obligated under the contract. Thus, because the Jensens were not
"obligated" under the second contract, the Seventh Circuit,
relying on 15 U.S.C. § 1631, reasoned that the TILA's disclosure
requirements were inapplicable. The case at bar can be plainly
distinguished from Jensen, because Fairley does not rely on the
allegedly forged, second retail sales contract as a basis for her
claim that Turan-Foley violated the TILA. Instead, she relies on
the integration of documents that do not contain a forgery.

                                          14
course of action for the district court ... is to find that

jurisdiction exists and deal with the objection as a direct attack

on the merits of the plaintiff's case.").   Because we hold that the

district court had subject matter jurisdiction to consider the TILA

claims, on remand it necessarily can consider the pending state

claims. See 28 U.S.C. § 1367.   The TILA is to be enforced strictly

against creditors and construed liberally in favor of consumers,

and, thus, we REMAND for disposition not inconsistent with this

opinion.

     REVERSED and REMANDED.




                                15
