Contracts, Termination, Repudiation and Rescission

[toomanycalls]

Re: Contracts, Termination, Repudiation and Rescission

So with the High Court judgment on Monday confirming that a bad notice can lead to no enforcement, such as termination, and three lower courts all holding the same view point, it seems that the repudiation argument is not likely to succeed.

I'm confused as to exactly what that means, what happens then when the creditor gives a duff DN, terminates( even though not allowed) and then starts proceedings for enforcement.

Is this what will become clear on Monday?

[basa48]

Re: Contracts, Termination, Repudiation and Rescission

Is there *anything* the creditors can't get away with?

[pt2537]

Re: Contracts, Termination, Repudiation and Rescission

Just a heads up, but today i learned of three cases, all running the Repudiation arguments that went to trial.

All three were lost, and two incurred substantial costs orders.

So with the High Court judgment on Monday confirming that a bad notice can lead to no enforcement, such as termination, and three lower courts all holding the same view point, it seems that the repudiation argument is not likely to succeed.

[New_Age_Biker]

Re: Contracts, Termination, Repudiation and Rescission

It was the use of the word lawfully in my scenario that I am keen to investigate.
If the creditor can't lawfully terminate because he has not served a valid Dn in a default situation.
It surely follows that he has acted unlawfully.
This then makes the creditor the first party to break the law, the debtor has merely breached the contract.
IMO

[Lord_Alcohol]

Re: Contracts, Termination, Repudiation and Rescission

Yes, I'm finding it hard to understand what the position is when the OC really has terminated the contract (by repossessing goods, winning the balance in court, notifying the entire UK consumer finance industry that the debtor is a risk and to be avoided, etc).

Will this judgement open up a swathe of litigation from former debtors who have had their contracts "terminated"?

Applying some kind of logic to S87, it has always seemed to me that the OC loses entitlements if he terminates incorrectly. But we have seen that there is no loss of entitlement through slips of the pen (ie, why should a bad DN result in losses for the OC?).

I find this hard to understand. The contract was a contract, and regulated by an Act of Parliament. If the OC chooses to mess about with the regulations, then my view is that he deserves all he gets. We've had several recent cases where the judge took the view that the regulations were not set in stone and that, as long as no "prejudice" was shown to the debtor through the creditor's mistakes, then all is well and the creditor will win. This isn't what the Act provides for. There is no Section 87(5) "The above shall apply only where no prejudice is shown to the debtor".

I'm truly amazed that the courts have been taking this approach. It seems to allow creditors to effectively block remedy under S89 so that they can claim everything in court.

I'm also looking forward to seeing how my two creditors are going to deal with reinstating the contract once we see PT's judgement...:tinysmile_aha_t:

[New_Age_Biker]

Re: Contracts, Termination, Repudiation and Rescission

I have heard (well read actually) the argument rumbling on in many places.
Is there such a thing as repudiation of a regulated agreement due to service of a Tn on the back of a faulty Dn

I see thrust in both sides of the argument, however.
If the creditor cannot lawfully terminate in a default situation without a valid Dn
Has he acted unlawfully in serving the Tn, and worse litigating?
If the creditor has acted in such a way then there must be a sanction or penalty.

I am not allowed to drive at a speed exceeding the speed limit unless I am an officer of the law responding to a call & have blues & twos going.
This does not stop me from exceeding the speed limit (I have the points to prove it) but there is a sanction.
Additionally the sanction should act as a warning to me to behave, if I continue my unlawful behaviour I face losing my license completely

Can't the same logic be applied to the CCA

[toomanycalls]

Re: Contracts, Termination, Repudiation and Rescission

Interesting, the notice of default under section 87(1) is what a bank is taking me to court with at the moment which puts a foot on both bases?

[diddydicky]

Re: Contracts, Termination, Repudiation and Rescission

I think I am, can you expand on that a bit, I thought a default notice or notice of default was the same thing? The default on the credit file is separate and unrelated.

no a default notice served under s87(1) is an opportunity given in prescribed form by a creditor to the debtor alleging that he has breached the agreement and stating what the alleged breaches are and what the debtor must do to remedy the situation and the prescribed minimum time he has to do so

if the debtor fails to remedy a valid DN then the creditor is "entitled" to take the next step- which is to terminate the agreement/demand immediate payment of sums that were otherwise not due under the agreement

a notice of default has no legal significance - it is merely a notification

[diddydicky]

Re: Contracts, Termination, Repudiation and Rescission

LA
I believe you may have missed a point that Pt made
The OC cannot terminate on the back of a faulty Dn therefore I suggest he is saying by ommission that the contract endures
He has also stated that the arrears due are what is required to correct the default situation at the point in time the Dn is issued (ie 2 yrs worth in my example)
Maybe FallenAngel has hope in the argument about an assigned debt which I broached earlier in the thread
However we have a date from Pt now so then we can start to read and learn our fate...

looking at the creditors "termination" from a different aspect (and using the amex v brandon school of "changing the term on which one is suing on when it is clear you are losing scenario).........

the creditor (for whatever reason- and lets agree that if even HE does not realise he is acting unlawfully- the debtor cannot be deemed to know) sends a letter to the debtor terminating the agreement

the debtor responds accepting the creditors termination...


so, the creditor has just in effect "varied the agreement"- which he is entitled to do under the terms of the agreement

i believe under most agreements the debtor then has the option of accepting the variation to the terms of the agreement or of declining and ending the agreement


so- in this case the debtor says okay dokay i accept the variation- the agreement is terminated

two parties to the agreement both in agreement to terminate the agreement!!


(ps i still believe there is mileage in the unlawful repudiation route - where the performing party has a duty to mitigate his losses and may - at the receipt of the creditors termination of the agreement and withdrawal of the credit facility- have now forced the performing party to borrow money from his aunt/uncle/butcher /baker in order to finance that which he was previously expecting to finance using the now unlawfully terminated credit agreement

no prejudice to the debtor ......my ar*e

[toomanycalls]

Re: Contracts, Termination, Repudiation and Rescission

i think you may be confusing between a default notice (unders s87(1) -and which the creditor may serve when he wants to) and a notice of default-

I think I am, can you expand on that a bit, I thought a default notice or notice of default was the same thing? The default on the credit file is separate and unrelated.

[diddydicky]

Re: Contracts, Termination, Repudiation and Rescission

But a default notice is a notice of being in default and occurs when you are two or more payments in arrears, in fact I'm sure you are supposed to be sent one on the second month. It is not that a default is being registered on your credit file, in fact its probably just that the account has late payments at this stage. That default marker might happen later but is not directly connected to the default notice.

i think you may be confusing between a default notice (unders s87(1) -and which the creditor may serve when he wants to) and a notice of default-

[New_Age_Biker]

Re: Contracts, Termination, Repudiation and Rescission

A simple approach, sorry i don't know the case law inside out,

If the Act is not followed to the letter, the arrears are all that is enforceable through the courts. The balance is still owing but the options are limited as to how collection occurs

Re: Contracts, Termination, Repudiation and Rescission

Hi
I would like again to challenge the percieved view of the Woodchester case in relation to the creditor’s repudiation, and authority that only the arrears are due on an invalid notice. I know it has been going on for some time on here but I just cannot see it. Never could
As far as I can see the pleadings, in the case they where in two parts the recovery of the arrears, which was also the amount to remedy and the sum amounting to the future loss of income under the agreement.
The arrears where admitted but the amount was in question.
Also in question was if the breach by the debtor was a repudiatory breach under common law
(mentioned in the report as item 4)this was not ruled on because the judgement on the invalid notice settled the question.
This is important is because, if the breach was contractual(not repuiatory) then the estimate of future losses would be a penalty and not recoverable under common law.
This is in essence what happened when the default notice was judged to be defective, obviously the arrears which where actual liabilities were payable but the future earnings were not.
This was a hire agreement.
If it were a loan the total amount would be due and payable, if the default is defective then the creditor can just re issue the default for the corrected amount of arrears, but the full balance still owes whatever happens.
Actual liabilities under a contract cannot just disappear. This would contravene the creditors human rights an any way the act will not allow such a sanction.
In woodchester the appellant was found not to owe future costs under the agreement, and the arrears only were due.
Unless the debtor continued to hire no further actual costs would accrue, the creditor cannot claim further repudiation because the account would be up to date. This would not be the case with a loan as there would still be a balance of liabilities on the agreement.
If of course the creditor remedies the breach then he is entitled to continue repaying those liabilities as per the contract
Peter

[New_Age_Biker]

Re: Contracts, Termination, Repudiation and Rescission

I am unsure as to the meaning of contempt, my definition may not align with the court
For instance I hold many DCA's in contempt, in fact my ex wife as well...

But not sure if continuing along a path when it has been pointed out it is wrong constitues contempt
I do think though if I kept interjecting in court, the judge would warn me.
If I continued, he may call it contempt then he may let me have an hour in the cells to think about my actions ..

[pt2537]

Re: Contracts, Termination, Repudiation and Rescission

I understand you have enlightened me that common law remedies are not possibel, ie repudiation/ recession
The point was, I told them the Dn was faulty in my letter accepting, in fact one bank wrote back & said ballcocks, our Dn is fine

but, that is a matter for the judge to decide at the end of the day, isnt it,