'Four Corners' Rule

[charitynjw]

I've been scouring the web to get a definitive on this, particularly re CCA (but not necessarily confined to it).

The short answer is something like

"Four Corners Of An Instrument
The principle that a document's meaning should be derived from the document itself, without reference to anything outside of the document (extrinsic evidence), such as the circumstances surrounding its writing or the history of the party signing it."

I have seen, however, that in certain instances, the "matrix" surrounding the agreement may be taken into account in court.

Can anyone point me in the direction of an up-to-date rationale of the current position?

[labman]

Re: 'Four Corners' Rule

After reading around, I can only come up with much the same as you, though four corners must not be taken literally, it could be multiples of four as long as they're all CLEARLY part of the same document.

I touched on something from a Manchester judgment or something, but was unclear as to its impact, if any, on this rule.

[Guest]

Re: 'Four Corners' Rule

HI
I only really know about this in respect to CCA agreements, it originates from this judgment
In Wilson and another v Hurstanger Ltd (2007) it was stated “In my judgment the objective of Schedule 6 is to ensure that, as an inflexible condition of enforceability, certain basic minimum terms are included which the parties … and/or the court can identify within the four corners of the agreement. Those minimum provisions combined with the requirement under s.61 that all the terms should be in a single document, and backed up by the provisions of section 127(3), ensure that these core terms are expressly set out in the agreement itself: they cannot be orally agreed; they cannot be found in another document; they cannot be implied; and above all they cannot be in the slightest mis-stated. As a matter of policy, the lender is denied any room for manoeuvre in respect of them. On the other hand, they are basic provisions, and the only question for the court is whether they are, on a true construction, included in the agreement.
This quotation has been used in probably thousands of defence statements and POCs , in the early days it seemed to be quite effective , then came the Rankin case and later the Carey hearing in Manchester referred to earlier.
Until May 2005 the CCA didn’t require terms to be on the same page as the signature, only in the same document, so the important definition here is the one that says what a document is.
There is no denying that the provisions of Part 5 of the CCA (Section 61etc.) were designed to ensure that the lender must be aware of the terms of the agreement when signing, and the sanctions for breaching these requirements are that the agreement will be unenforceable. Initially courts were willing to accept this argument, however when people started to use these measures as loopholes to avoid payment and the CMCs started to present cases in their thousands in county courts up and down the land, something had to be done. In my opinion what was done was that the meaning of the word document was re interpreted. The final death to the four corners argument came in Wakesman when a document was said to be defined by its content rather than its form. In other words it didn’t matter if the signature was on a piece of A4 and the terms and conditions were on a glossy leaflet as long as the content where interdependent then they could be said to be contained within the same document or within its four corners.
Peter

[Bill-K]

Re: 'Four Corners' Rule

The simian take on this:

Sure, Waksman had the right idea, I reckon, in that he was saying that the signatories to any agreement could only be seen as signatories to that which they were able to see. So - any agreement to which a signature is applied MUST be 'bounded' by that which the signature is applied to. The signature is the 'bottom line,' and any addition thereafter (or 'heretobefore - whatevva) is NOT 'within the four corners.'

LOL - Direct Debits get up my nostrils for that VERY reason !!! WHAT was wrong with Standing Orders ? !!!

BUT - we have the problem that the agreement may refer to T&C's, and perhaps other pertinent conditions, and this has become a problem. I believe that the 'four corners' argument is perhaps a misnomer, in that it should be seen as a 'six corners' argument. It is still a 'box,' - but it is a 3-dimensional box. It is NOT just a 2-sided piece of paper, but a multi-faceted structure. Personally, I don't like that idea, but I can see the logic of it.

What seems to now need clarifying - by Lord Waksman, or his descendants in this game, is what limitations there are on these facets. If it is now opened beyond a 2-dimensional document, then how many further dimensions can it have ?

If the Law is to allow thinking beyond 2 dimensions, then Limitation MUST be applied, methinks. Reasonableness is the essence of our law, here, innit ? Limitation must be a part of that, say I.

[Guest]

Re: 'Four Corners' Rule

HI
It is worth remembering that this problem only occurs in pre May2005 CCA agreements, after that time the form of the agreement is stipulated by the 2004 regulation SI. The new ones have the key information format where certain terms must be placed together and undispersed within the document.
The earlier regulations (pre2004) did not have the same restrictions regarding form and the signature could be anywhere within the document(Reg 1983/1553).
The prescribed terms, (that is usually the interest and total credit etc) had to be within the signature document but there was no stipulation as to where. The rest of the terms can be on an attached document.
I would argue that they really must be within the same document but courts have ruled otherwise.
The difference as far as the cca is concerned derives from the use of the words, “contained” and “embodied”.(section 189 definitions)
Contained means that the information contained within the act must be within the same document whereas embodies means that the information can be in different documents but must be presented together with any other documents at the timed of signing.
So when section 60 says that the agreement must contain the signature and the prescribed terms it means that those particular terms must be within the document or within its four corners.
However when section61 says that the rest of the information must be embodies in the agreement it means that they can be in other documents related to the execution of the agreement.
Peter

[TUTTSI]

Re: 'Four Corners' Rule

Judge Judy mentioned this recently in the TV programe that a written contract within the four corners, if it is not written on that contract then it does not form part of the contract.

I've been scouring the web to get a definitive on this, particularly re CCA (but not necessarily confined to it).

The short answer is something like

"Four Corners Of An Instrument
The principle that a document's meaning should be derived from the document itself, without reference to anything outside of the document (extrinsic evidence), such as the circumstances surrounding its writing or the history of the party signing it."

I have seen, however, that in certain instances, the "matrix" surrounding the agreement may be taken into account in court.

Can anyone point me in the direction of an up-to-date rationale of the current position?

[labman]

Re: 'Four Corners' Rule

I read an interesting thread on this last night on a site forum for lawyers.

The OP had stated that he initially tries to work to the four corner rule, (4 meaning 4,8,12,16 etc.... however many pages there are), but if there remain unanswered points, then any other evidence available is taken into account.

Now to me this says if he can't draw a conclusion from an original document he'd look at anything else available.

What then is the point of having this rule if that is the attitude taken by the professionals?


Found it!

"In my practice I receive a lot of questions regarding how a court deals with a breach of contract case. Whether its a non-compete agreement or a simple sales contract, the Court will always first turn to the Contract. This is universally known as the "Four Corners Rule".

Basically, the "Four Corners Rule" means literally that the language inside the four corners of the contract will control the outcome of the dispute and outside evidence will generally not be considered. Now, there are exemptions, as there is in every aspect of the law, but when dealing with a breach of contract case, one should always turn to what the contract says to the controversy at hand.

The next practical question I receive is what if my contract doesn't cover the dispute I am having with the other party. If the Court feels the dispute cannot be resolved by the language in the Contract, or it is ambiguous, then the Court will allow outside evidence to show what terms were agreed upon by the parties, or what the intent of the parties were to cover the situation. Such evidence may be correspondence between the parties before the contract was formed, or testimony of witnesses who were present to the negotiations etc."
(with thanks to The Lawyers Forum)

[charitynjw]

Re: 'Four Corners' Rule

The Parol Evidence Rule

http://www.gillhams.com/dictionary/433.cfm

parol evidence rule

1.

The parol evidence rule that disallows parol evidence (that is, oral or verbal evidence) to be admitted to 'contradict, vary, add, to or subtract from the terms of a written contract' or a part of a contract that has been completely recorded in writing.
The rule is intended preserve the integrity of a written agreement and allow it to be interpreted using principles of contractual construction that promotes certainty, without interference from pre-contractual negotiations, draft contracts and other extrinsic matter.

There are a number of exceptions to the parol evidence rules under English law which include situations where:

1. the written document does not record the entire agreement between the parties, that is, where the agreement is partly verbal and partly written such as a oral term that is not recorded in the agreement, but was intended by the party to continue in force concurrently with the written terms.
2. a contract is alleged to exist which is collateral to the agreement. See collateral contract.
3. the formation of the contract is vitiated by mistake.
4. the document itself is not a contract.
5. the contract is conditional on some event taking place.
6. the evidence relates to the date the contract was entered into.
7. the contract has been varied.
8. the contract is tainted by fraud or some illegality.

Usage: The application of the parol evidence rule rendered the evidence of the oral representations irrelevant, and as such were excluded from evidence.

[Bill-K]

Re: 'Four Corners' Rule

"...Basically, the "Four Corners Rule" means literally that the language inside the four corners of the contract will control the outcome of the dispute and outside evidence will generally not be considered. Now, there are exemptions, as there is in every aspect of the law, but when dealing with a breach of contract case, one should always turn to what the contract says to the controversy at hand."

That makes sense to my tiny mind, in that WITHIN those 4 corners lies the key. If that key is not to be found, then there are no further facets or dimensions. That key is the portal to the further dimensions of any agreement, and its' absence should be significant.

Its' presence should, though, IMHO, NOT be treated as a 'Get Out of Jail Free' card !!! This is where 'reasonableness' - and limitation - must be applied, IMO.

"Hold very tight, now...Ting, ting...!!!"

[MIKE770]

Re: 'Four Corners' Rule

Judge Judy mentioned this recently in the TV programe that a written contract within the four corners, if it is not written on that contact then it does not form part of the contract.

You watch that to!!

[TUTTSI]

Re: 'Four Corners' Rule

I certainly do, I pick up lots of useful stuff regarding the law and she a tough cookie too.

You watch that to!!

[labman]

Re: 'Four Corners' Rule

That makes sense to my tiny mind, in that WITHIN those 4 corners lies the key. If that key is not to be found, then there are no further facets or dimensions. That key is the portal to the further dimensions of any agreement, and its' absence should be significant.

Its' presence should, though, IMHO, NOT be treated as a 'Get Out of Jail Free' card !!! This is where 'reasonableness' - and limitation - must be applied, IMO.

"Hold very tight, now...Ting, ting...!!!"

So, in relation to a CCA agreement what are we saying here? Are the T&C's part of the contract? I think what would be argued is the contract is 'within the four corners' and the T&C's are not part of the formal contract, but the T&C's governing the contract which is contained within the four corners.

Thus Bill's reasonableness. I hate being reasonable!

[Guest]

Re: 'Four Corners' Rule

So, in relation to a CCA agreement what are we saying here? Are the T&C's part of the contract? I think what would be argued is the contract is 'within the four corners' and the T&C's are not part of the formal contract, but the T&C's governing the contract which is contained within the four corners.

Thus Bill's reasonableness. I hate being reasonable!

Hi

I think that perhaps the word contract is too wide. Anything (virtually) can be considered to be a contract, from agreeing to meet your mate in the pub to Virgin buying northern rock.
The important thing is can the contract can be enforced; if it is breached by one of the parties can the other use the contract to obtain redress.
The consumer credit act sets out to define what is and is not an enforceable agreement.
Firstly it says that all terms of an agreement must be reduced to writing, so there can be no binding verbal or implied agreement.
Next it defines the essential elements of the terms of a credit agreement, the prescribed terms. It says that unless these are in the same document as the signature (thereby ensuring that the lender would have had sight of them at execution) the agreement would not be enforceable.
Lastly it says that the rest of the terms and conditions must have been available for the lender to see, but they do not necessarily have to be in the signed document. If these other terms are not then the creditor will have to get the permission of the court before they can enforce. This will depend on the amount of prejudice cause to the lender by the omission.

Peter

[labman]

Re: 'Four Corners' Rule

It makes it sound so simple doesn't it!

[Bill-K]

Re: 'Four Corners' Rule

Sure, the T&C's are an ESSENTIAL PART of the agreement/contract. They are the Terms and Conditions of that Contract. As Peter says, they do NOT have to be physically written on the same document which is signed by all parties to the contract - but I believe that they MUST be clearly - and PRECISELY - referred to within that contract - within 'the four corners' of it.

So, a vague reference to 'all other Terms & Conditions' is not clear or precise enough. There MUST IMO be a clear reference to another 'four-cornered' document containing those T&C's. For example "as stated in our T&C's" is clearly not precise enough. Something on the lines of "as stated in Anybank's Terms and Conditions pertaining to loan agreements, dated XX/XX/XXXX, document ref. XXXXXX." There is then NO ambiguity as to what these T&C's are - nor where the 'four corners' lie.