Contracts, Termination, Repudiation and Rescission

[Lord_Alcohol]

Re: Contracts, Termination, Repudiation and Rescission

Sorry to interject Ed
You state that you have 14 clear days (allowing for idiot Djs) to rectify the Dn
PT states that the creditor can reissue if the Dn is faulty
The debtor can never win in your world

If the Dn is not in the prescribed form the creditor should know this as a financially astute company
The act lays out what he must do if he requires to terminate the agreement and demand monies not yet due
If the rules are strictly applied that 14 days is 14 days then the creditor loses if he does not allow enough time & the debtor loses if he does not rectify.

I have accounts where the Dn is incorrect, I have not paid on these accounts for some 2 years. If the creditor gets chance to reissue the Dn what arrears will be the correct amount? Do you honestly think the agreement will endure as thought the breach had never happened?

I would say that the only amount that could ever be lawfully put on a DN is the arrears; if the DN is a replacement sent 2 years after the first, the arrears must be the original amount from 2 years prior. Why? Because the OC terminated and implied that monthly payments would no longer be acceptable. New arrears can not occur, because the word "arrears" means "behind with payments"; therefore, "arrears" can only occur where there is a "live" (ie, not terminated) agreement.

There can be no further arrears until the contract is resurrected, an event which, of course, requires your explicit agreement.

One other amusing thought I had - the only way the OC can serve a new DN is to re-open the contract, allowing the debtor to remedy and to continue as before. However, he has already marked the debtor as a risk with the CRAs. Therefore, by reinstating the contract, he immediately falls foul of the OFT's irresponsible lending rules, as the OC would be offering credit to a defaulting individual!

This, I think, is why banks are stuffed once they have terminated via a bad DN. There is just no going back.

[Lord_Alcohol]

Re: Contracts, Termination, Repudiation and Rescission

Both my credit card providers began increasing rates, to 31%, when I started having difficulties and paid just the minimum each month, with one or two lates.

At the same time they offered 14% or less to new customers, after 0% for 6 months for credit transfers.

I would say that it is routine for banks to up their rates for customers showing signs of problems, presumably so that they can maximise their profits in the short term and accumulate a bigger pot to eventually claim in court.

I would also say that moral arguments serve no purpose; banks are inherently amoral, existing to make fat profits for their staff, pension funds and investors. If they can make more by clobbering customers who are about to go belly-up, then that is understandable. The flip side, of course, is that it becomes pretty much inevitable that the customer will default as interest goes up.

Just my analysis - maybe others have experienced rate reductions when they get into difficulty :tinysmile_aha_t:

[diddydicky]

Re: Contracts, Termination, Repudiation and Rescission

Sorry to interject Ed
You state that you have 14 clear days (allowing for idiot Djs) to rectify the Dn
PT states that the creditor can reissue if the Dn is faulty
The debtor can never win in your world

If the Dn is not in the prescribed form the creditor should know this as a financially astute company
The act lays out what he must do if he requires to terminate the agreement and demand monies not yet due
If the rules are strictly applied that 14 days is 14 days then the creditor loses if he does not allow enough time & the debtor loses if he does not rectify.

I have accounts where the Dn is incorrect, I have not paid on these accounts for some 2 years. If the creditor gets chance to reissue the Dn what arrears will be the correct amount? Do you honestly think the agreement will endure as thought the breach had never happened?

quite! if the new dn just shows the arrears as they were at the time that the first DN was served- then - according to the creditor his termination never took effect- so as soon as the debtor remedies the new DN- he will then automatically be in arrears again for the payments he has not made between the first DN and the second and so his remedy of the DN will not return the account to the status quo (s89)

on the other hand, if the creditor serves a second DN - having already terminated the agreement, and includes all arrears up to the date of the second DN- he will then be demanding payment of arrears which are not arrears-and is therefore an incorrect amount- because some months (or more) he told the debtor that the agreement was terminated and monthly payments were no longer acceptable.

Finally, if the creditor- with all his financial and legal clout- did not understand that the first DN was invalid- then how is the unsophisticated borrower (whom the act is there to protect) supposed to know?

If the creditor believes he is terminating the agreement following a defective DN which he himself is unaware is defective- how is the consumer expected to examine the DN and TN and work out that in fact no, this is not termination because the creditor has not complied with s87 ( parts of the act which the consumer has probably never heard of )

It matters not a jot whether the creditor has terminated by mistake, error , negligence or whatever- once he repudiates and withdraws the main benefit of the agreement from the borrower- and which goes to the heart of the agreement- the deed is done and the creditor is bound by his word

the borrower is then entitled under common law as the performing party- to make an election and to consider himself releived of any further obligations under the agreement

There is NO circumstance where the law would expect one party to an agreement to continue to perform- when the other has clearly repudiated

[diddydicky]

Re: Contracts, Termination, Repudiation and Rescission

Basa I empathise, but if rates are raised pull the deal, stop spending on the card, cut it up....then arrange repayments. If you did that my comments are well out of order.

If you kept spending despite the hike in interest, which I'd consider a material change to the contract, then again sorry I don't see the unfairness. Interest changes, nobody believes the rate they sign up for is the rate they pay for life.

You need to look at the rate hike itself given continued spendnig would show acceptance.

Was the % above average, was the fact the card knew you would have to keep spending and accept due to your circs and in doing so it becomes unfair....did the card issuer on the rate hike, give you 6 months interest free, and a new lower credit balance to help happen and so on or did they hike and keep letting you spend to enforce the cycle and so on.

I hold my hands up in not knowing your case, but raising of interest rates is not unfair - it's how it's done that ticks the boxes of S140 mate.

That's what I'm trying to drive at mate.

Dicky....

Really?

If the debtor pays a week late on a valid DN they have breached their own terms of the CCA, what's your point? You have 14 days clear ignoring idiots DJ's to remedy the breach. If you get those 14 days, still can't remedy, don't bother contacting the creditor to explain the situation that remedy will be forthcoming slightly late....you've lost your leg.

I fail to see your point.

Why should we expect creditors to act properly, if your argument is, if a debtor fails to abide by the protection given under the CCA then it's still the creditors fault??????

Your wife shouldn't have signed the policy in those circs...where is personal responsibility?

Lose your anger, it makes a mockery of the point you want to make, especially as your argument there has sweet FA to do with what I said.

As for your quotes, doesn't that actually prove my point? Ordinary competence?

the point had ALREADY been made that we the debtors should act morally and not in strict accordance with the terms of the agreement

my "point" was that the creditors dont! as in the cases stated

as far as PPI was concerned- i think you will find that far more intelligent people than my wife were "conned" into it- admittedly by the sounds of it not as intelligent as yourself btu hey ho we cant all be perfect- it would hurt too much

finally i have no anger whatsoever and i fail to see where you drew that conclusion

i am a believer in the rule of law- and as such believe that the "law" should be upheld- however once one side of "the law" (civil law in this case) seeks to act outside of the terms and conditions- anarchy reigns

as a policeman, if i breathalysed a person and they were over the legal drink drive limit- i did not (could not) say- well - you were only 2 points over the limit so i will let it go- the rules is the rules and have to be adhered to by all side

In a civil contract, it makes no sense to write down all the terms and conditions of the agreement- enact legislation to police that agreement..........and then claim that one side should be allowed to work to the strict letter of the law (the creditor in this case0 whilst the consumer must forego his rights in favour of acting "morally" rather than in accordance with the contract


I can give you a perfect example of a creditor who agreed to a charging order in return for a consumer being allowed to make monthly payments of XXXX

the solicitor acting for the consumer- and who had apparantly negotiated this deal then for some inexplicable reason signed a consent order sent by the creditor which did NOT include the agreed monthly repayments (and so was a forthwith order)

now then morally speaking- the creditor should have put their hands up and said- sorry youre right that was not what we agreed so we will send another consent order representing what was really agreed- did they do that?................of course they didn't. they took advantage of the fact that for whatever reason the consumers solicitor fouled up...........and you think that we should, as consumers be prepared to do the "moral" thing? dont make me larf

bankrs and financiers have no "morals" they dissapeared very many years ago

[New_Age_Biker]

Re: Contracts, Termination, Repudiation and Rescission

Sorry to interject Ed
You state that you have 14 clear days (allowing for idiot Djs) to rectify the Dn
PT states that the creditor can reissue if the Dn is faulty
The debtor can never win in your world

If the Dn is not in the prescribed form the creditor should know this as a financially astute company
The act lays out what he must do if he requires to terminate the agreement and demand monies not yet due
If the rules are strictly applied that 14 days is 14 days then the creditor loses if he does not allow enough time & the debtor loses if he does not rectify.

I have accounts where the Dn is incorrect, I have not paid on these accounts for some 2 years. If the creditor gets chance to reissue the Dn what arrears will be the correct amount? Do you honestly think the agreement will endure as thought the breach had never happened?

[basa48]

Re: Contracts, Termination, Repudiation and Rescission

Basa I empathise, but if rates are raised pull the deal, stop spending on the card, cut it up....then arrange repayments. If you did that my comments are well out of order.

If you kept spending despite the hike in interest, which I'd consider a material change to the contract, then again sorry I don't see the unfairness. Interest changes, nobody believes the rate they sign up for is the rate they pay for life.

You need to look at the rate hike itself given continued spendnig would show acceptance.

Was the % above average, was the fact the card knew you would have to keep spending and accept due to your circs and in doing so it becomes unfair....did the card issuer on the rate hike, give you 6 months interest free, and a new lower credit balance to help happen and so on or did they hike and keep letting you spend to enforce the cycle and so on.

I'm not saying that increasing interest rates is unfair. For me it is the actual size of the increases.

When I signed up the average interest rate was between 11% and 16% (depending when entered into). Those rates are now at least double and more!

It is not that I kept spending at those high interest rates it was that the minimum repayments to keep pace with the raised interest were more than I was used to paying at the lower rates and which was controlling the debt quite adequately.

The real irony is that as interest rates rise so does the cost of everything and there is even less disposable income to pay the debts.

[ed.]

Re: Contracts, Termination, Repudiation and Rescission

Basa I empathise, but if rates are raised pull the deal, stop spending on the card, cut it up....then arrange repayments. If you did that my comments are well out of order.

If you kept spending despite the hike in interest, which I'd consider a material change to the contract, then again sorry I don't see the unfairness. Interest changes, nobody believes the rate they sign up for is the rate they pay for life.

You need to look at the rate hike itself given continued spendnig would show acceptance.

Was the % above average, was the fact the card knew you would have to keep spending and accept due to your circs and in doing so it becomes unfair....did the card issuer on the rate hike, give you 6 months interest free, and a new lower credit balance to help happen and so on or did they hike and keep letting you spend to enforce the cycle and so on.

I hold my hands up in not knowing your case, but raising of interest rates is not unfair - it's how it's done that ticks the boxes of S140 mate.

That's what I'm trying to drive at mate.

Dicky....

Really?

If the debtor pays a week late on a valid DN they have breached their own terms of the CCA, what's your point? You have 14 days clear ignoring idiots DJ's to remedy the breach. If you get those 14 days, still can't remedy, don't bother contacting the creditor to explain the situation that remedy will be forthcoming slightly late....you've lost your leg.

I fail to see your point.

Why should we expect creditors to act properly, if your argument is, if a debtor fails to abide by the protection given under the CCA then it's still the creditors fault??????

Your wife shouldn't have signed the policy in those circs...where is personal responsibility?

Lose your anger, it makes a mockery of the point you want to make, especially as your argument there has sweet FA to do with what I said.

As for your quotes, doesn't that actually prove my point? Ordinary competence?

[diddydicky]

Re: Contracts, Termination, Repudiation and Rescission

LEST WE SHOULD FORGET:-...............



"... a person who signs a document, and parts with it so that it may come into other hands, has a responsibility, that of the normal man of prudence, to take care what he signs, which if neglected, prevents him from denying his liability under the document according to its tenor".
[per Lord Wilberforce in Gallie v Lee (1971)]

'.. a man cannot escape from the consequences, as regards innocent third parties, of signing a document if, being a man of ordinary education and competence, he chooses to sign it without informing himself of its purport and effect..'
[per Scott LJ in Norwich & Peterborough Building Society v Steed (1992)]

a DN and/or a termination letter sent by a creditor would be covered 100% by the foregoing...IMO

[diddydicky]

Re: Contracts, Termination, Repudiation and Rescission

Sorry folks, are we really basing everything on such technicalities.

If consumers act in such a petulant way, can we blame Judges now for considering CCA claims as a means of removing liability on ridiculous points?

Where is the unfairness, where is the brow beating?

The DN is wrong, not enough days, states the wrong figure, states the wrong address, etc

Come on.

YES there has to be recourse in claimants not paying enough attention, dragging people to court when they can;t even cross their T's and dot their 'I's etc but to think on it's own such an error removes the entitlement to the debt.

Sorry don't agree. Behaviour like that should limit liability, not extinguish it.

We are getting bogged down in pointlessness.

If a creditor makes a material breach they should only be entitled to their risk which is the principle sum...no interest, no charges etc...

A paperwork error irrespective of a 100 or 100,000 loan is what gives us a bad name.

We all want to fight, we all want to address the unfairness....but what is wrong with the moral offer?

On errors, repay the principle sum loaned?

I appreciate this isn't probably the right thread for this, but I've had enough.

As an amatuer I'm good at left field arguments, I'm running them. Won them, some ongoing.

But really deny an entire debt, even the principle sum, over what could be a misprint? And a daft technicality?

It's these cases who **** us all.

If you've had the money, repay the money. If the agreement is wrong, argue about the interest, argue about charges....but pay the principle - it' the moral and ethical thing to do.

I await flaming and PM's.....but I don't care, I've done this since 2007 and whilst people bang on about CMC's all I am actually seeing is more people jumping on the bandwagon for no good reason and the real people who need the protection are being buggered by those with the money to try and take advantage.

Those it doesn't apply to will not feel offended....those who feel offended, kind of prove my point.

do you SERIOUSLY believe, that if a creditor serves a valid DN- and the consumer pays the amount demanded in the DN a week later than the remedy date.......that the creditor will play the "moral " role and say "ok a week late- but thats OK!!"


i DON'T THINK SO!!

what the creditor WIll say is "thanks for the payment....but sorry old son- we already terminated- we were just about to write to you"


if a creditor sold PPI to a self employed person - or as in the case of my wife- who worked for a govt department and whose work benefits for sickness and reduncancy exceeded those available under the policy............that the creditor would act "morally" and repay the premiums plus interest?

what planet do you live on!

whats good for the goose...................

[basa48]

Re: Contracts, Termination, Repudiation and Rescission

Too true, Basa!
Or, as in the case of my Littlewoods card which I was carefully keeping within my affordable minimum repayment limits (despite unrequested hikes of my credit limit) when suddenly (shortly into the credit crunch) they kindly wrote and said
"In order to help you (??!!) repay your credit balance we have increased your minimum repayments to 6%"
(Double what it was, taking my monthly repayments from £90 to £180).

And, together with an unexpected major drop in income, there ensued the usual late payment fees (so the credit limit plummeted) then overlimit fees until I sent for a copy of the CCA to see if they had the right to do all this.

Sadly, a CCA never arrived (unsuprisingly since I genuinely never signed anything..it was an offshoot of a catalogue account).
Not had a single word from them in 2 years since I requested it and the account isn't even listed on my credit record.
Morally, I don't feel I owe them anything.

You're not my wife incognito are you??!! :tinysmile_kiss_t4:

What you describe is EXACTLY my OH situation except perhaps I am suing the catalogue for return of interest charged unlawfully!!

(A little foolish perhaps, but it is giving me valuable insight & experience of how the system works).

[Shepherdess]

Re: Contracts, Termination, Repudiation and Rescission

Too true, Basa!
Or, as in the case of my Littlewoods card which I was carefully keeping within my affordable minimum repayment limits (despite unrequested hikes of my credit limit) when suddenly (shortly into the credit crunch) they kindly wrote and said
"In order to help you (??!!) repay your credit balance we have increased your minimum repayments to 6%"
(Double what it was, taking my monthly repayments from £90 to £180).

And, together with an unexpected major drop in income, there ensued the usual late payment fees (so the credit limit plummeted) then overlimit fees until I sent for a copy of the CCA to see if they had the right to do all this.

Sadly, a CCA never arrived (unsuprisingly since I genuinely never signed anything..it was an offshoot of a catalogue account).
Not had a single word from them in 2 years since I requested it and the account isn't even listed on my credit record.
Morally, I don't feel I owe them anything.

[toomanycalls]

Re: Contracts, Termination, Repudiation and Rescission

LA said

So perhaps the phrase "the OC cannot terminate on the back of a bad DN" merely means that he cannot do this and expect the benefit of S87(1) (entitlement to the balance or goods)?

The point being that it is not the bad DN that is relied upon, but the fact that the OC terminates without entitlement.

Just a thought...could be complete rubbish of course...

I don't think that's rubbish, I think that's the key point if proceedings have started.

[pt2537]

Re: Contracts, Termination, Repudiation and Rescission

ask yourself, how does a credit card issuer provide funding?

they do so on the bond markets, by securitisation.

Now, the rates you pay are governed by this process,

so the courts will not, and did not in the recent case, take the view that the raising of rates is unreasonable, due to the fact that there was a need to raise further funds for credit, and to do that required raising rates

[basa48]

Re: Contracts, Termination, Repudiation and Rescission

Basa - on the other hand have you ever been charged an interest rate at minimum payment that would ever see you repay the balance? We all fall into the minimum payment trap, that in itself I don't find unfair. Hiking rates I do, but a belief that we can pay the minimum and continue spending isn't unfair, it's our own error....and I say that as somebody who only paid the minimum.

What happens is that you spend up to a level on the card where you can repay the minimum plus a reasonable amount to bring the balance down. Then the creditor hikes up the interest and your income remains static such that those same repayments are now the minimum level and repay very little balance. The trap is that you are used to using that credit ('cos your disposable income is spent paying the debt) and now can't reduce that debt adequately.

[ed.]

Re: Contracts, Termination, Repudiation and Rescission

LA - as said probably the wrong thread but seems apt as it's total recission etc and left field options that the Act doesn't allow - I was just ranting generally because I'm fed up of chancers ruining the protection for all by citing and trying to prove the tiniest error in effect means they should be able to reclaim anything already paid.

I've read my post, I didn't put that into proper context, so I apologise.

In your case, no I don't discount Woody - how could I? - I think it's the perfect remedy. The remedy and protection for you IS THERE and exists already. They made the mistake, not only can it be challenged on the basis of unfairness through behaviour, but caselaw exists showing the remedy for their actions fullstop.

You can demostrate you have already repaid the principle, you aren't doing a complete unenforceability, your liability is now simply the arrears through their behaviour.

What's wrong with that?

Again, sorry if it didn't come across, I'm on about the Rankine element, the bandwagon jumpers who want out of it all.

As for creditors who expect payment in one go...to paraphrase a recent letter to a TSB 3rd party:

Even if I could afford to meet that kind of repayment, I wouldn't on principle because unlike your client, I'm not able to beg to the Government for a windfall to cover my mismanagement just cause it might suit you.

Basa - on the other hand have you ever been charged an interest rate at minimum payment that would ever see you repay the balance? We all fall into the minimum payment trap, that in itself I don't find unfair. Hiking rates I do, but a belief that we can pay the minimum and continue spending isn't unfair, it's our own error....and I say that as somebody who only paid the minimum.

It's the ridiculous debt attitude we now have in this country, and that applies to the Gov aswell as I remember Clarke talking about it - as long as you can maintain interest payments, the level of debt is irrelevant.

We've become a debt dependent nation, we don't save for things anymore, we take the easy option...that's not unfairness from a creditor because we lapped it up. We should've known better, but we didn't...and I completely include myself in that.