Contracts, Termination, Repudiation and Rescission

[jumper999]

Re: Contracts, Termination, Repudiation and Rescission

Hi peter what makes a default notice ineffective? I mean what would you advise makes a default notice ineffective please?

[basa48]

Re: Contracts, Termination, Repudiation and Rescission

Bumping to see if there is a date when this determination can be published?

[pt2537]

Re: Contracts, Termination, Repudiation and Rescission

Bumping to see if there is a date when this determination can be published?

in the hands of the judge.

Due to the application under the barrell rule,it will need considering before judgment can be handed down.

It should be around march i hope, the early part

[Guest]

Re: Contracts, Termination, Repudiation and Rescission

Hi peter what makes a default notice ineffective? I mean what would you advise makes a default notice ineffective please?

you cannot take the "next step" to quote Woodchester on the back of a bad notice

So there can be no termination on a bad notice

the statute sets out clear in plain English that the service of a default notice is a prerequisite to being able to terminate.

The High Court judgment is in favour of the debtor, trust me, very very much in favour

Hi

Are you saying that an account cannot be terminated without a default notice?

I agree that a default termination is not valid if the notice is incorrect, and the enforcement cannot therefore be caried out.
But the option of contractural termination is always availabe to the creditor,this is confirmed in the new regulations where it states conrtractural treminations must recieve notice.

peter

[pt2537]

Re: Contracts, Termination, Repudiation and Rescission

Hi

Are you saying that an account cannot be terminated without a default notice?

I agree that a default termination is not valid if the notice is incorrect, and the enforcement cannot therefore be caried out.
But the option of contractural termination is always availabe to the creditor,this is confirmed in the new regulations where it states conrtractural treminations must recieve notice.

peter

No, what im saying is, s87 is mutually exclusive to default circumstances

While a creditor can terminate in non default circumstances, the moment there is a breach he must follow the acts requirements.

If he doesnt he cannot terminate

That is what counsel for both parties agreed in the High Court

[Guest]

Re: Contracts, Termination, Repudiation and Rescission

Hi peter what makes a default notice ineffective? I mean what would you advise makes a default notice ineffective please?

Hi
Section 88 sets out what is required for a notice to be effective.

Bassically it should give the debtor all the accurate information thats required to either remedy his breach, or if a remedy is not possible the full amount needed to pay off the loan and thus prevent enforcement in court.

There is no indication of any leeway as to the figures given or the amount of time(14 days) in which to do this, however recent judgements have said that minor errors in the sums quoted will not render the notice inafective. Also, the smount of time required is currently being callenged in court, the court is saying that if the 14 days ismisquoted that it does not matter as long as the actual enforcement gives the alloted time. In other woeds if the notice only gives 13 days then the notice will still be valid, this is the case at the moment but is being appeald

Peter

[Guest]

Re: Contracts, Termination, Repudiation and Rescission

No, what im saying is, s87 is mutually exclusive to default circumstances

While a creditor can terminate in non default circumstances, the moment there is a breach he must follow the acts requirements.

If he doesnt he cannot terminate

That is what counsel for both parties agreed in the High Court

Yes agreed

[jumper999]

Re: Contracts, Termination, Repudiation and Rescission

Thank you peter I think I kinda understood that

[basa48]

Re: Contracts, Termination, Repudiation and Rescission

Thank you peter I think I kinda understood that

Peter is saying (and I agree his evaluation) that even if a DN only gives say 12 or 13 days to remedy on paper, if the lender does nothing more (like termination or enforcement) until say 20 days after the date for remedy, the debtor is seen by the courts to have suffered no prejudice and the DN/termination are good.

I personally think this is an insane ruling for example when does 12 days become 10, then 6 then none? Secondly if the debtor thinks he has only 12 days he doesn't know that nothing more will happen until 20 days (as in my example above) and therefore had that much more time. He thinks he is dead in the water after the 12 days and concedes defeat when in fact he may have been able to remedy in the 20 days. That is surely an unfair relationship.

[toomanycalls]

Re: Contracts, Termination, Repudiation and Rescission

I personally think this is an insane ruling for example when does 12 days become 10, then 6 then none? Secondly if the debtor thinks he has only 12 days he doesn't know that nothing more will happen until 20 days (as in my example above) and therefore had that much more time. He thinks he is dead in the water after the 12 days and concedes defeat when in fact he may have been able to remedy in the 20 days. That is surely an unfair relationship.

I agree but I'm sure this will change soon when Brandon has another go.

[basa48]

Re: Contracts, Termination, Repudiation and Rescission

I have a problem with non default terminations.

What happens when a lender decides he's had enough and gives notice to terminate (using a 'convenience' clause in the T&Cs). Where is there any statement as to the notice required, the method / schedule for repayment, is interest frozen or does it continue? What provisions are there for variations in repayments, interest etc?

Note I have used the term 'terminate' not restrict or defer.

[pt2537]

Re: Contracts, Termination, Repudiation and Rescission

I agree but I'm sure this will change soon when Brandon has another go.

Im not sure what the outcome will be to be honest.

It seems to me that in Brandon they took steps which were not available to them, and then placed reliance on the fact that they could terminate by using clauses in the terms and conditions

That is plainly wrong, however, i see considerable thrust in an argument that if the creditor serves a bad notice, then he cannot terminate while there is an ongoing breach unless he serves a valid notice

I think one thing we miss with the 1974 Act is that its protection mechanisms were to provide the debtor with information

that is what the default notice is for, to inform whats wrong and whats to be done to put right, the same applies for example to the Prescribed terms, they are terms parliament thought so important to debtors so that they could make informed decisions

The Act was never put there to provide an escape from debts, but of course that is a consequence which is available for certain breaches.

So i am not sure which way the Court of Appeal will go, it may well say, no the notice is bad end of, in Brandons case, but it may also give some guidance on the matter, until they do we just dont know.

Of course the High Court judgment may be out by then, so the COA may approve that judgment also,

its a waiting game

[jumper999]

Re: Contracts, Termination, Repudiation and Rescission

Peter is saying (and I agree his evaluation) that even if a DN only gives say 12 or 13 days to remedy on paper, if the lender does nothing more (like termination or enforcement) until say 20 days after the date for remedy, the debtor is seen by the courts to have suffered no prejudice and the DN/termination are good.

I personally think this is an insane ruling for example when does 12 days become 10, then 6 then none? Secondly if the debtor thinks he has only 12 days he doesn't know that nothing more will happen until 20 days (as in my example above) and therefore had that much more time. He thinks he is dead in the water after the 12 days and concedes defeat when in fact he may have been able to remedy in the 20 days. That is surely an unfair relationship.

Thanks Basa, looks like were all in a pickle hey ..........my DN gave me 14 days and I believe it was approx 3-4 wks after that HSBC terminated my agreement. OK fair enough maybe HSBC have complied with the law and the act but the unfair thing which I believe was that I was in negotiations with them whilst all this was going on. They were well aware of my financial situation and still they expected me to cough up £200 'ish or so to rectify the DN.

Hopefully these recent judgments will help others and will clarify things once and for all.

[New_Age_Biker]

Re: Contracts, Termination, Repudiation and Rescission

If a creditor cannot terminate because of a bad DN what would the status of the agreement be? Would:

a) The agreement endure, the creditor then could issue a revised- corrected- DN. The debtor would have time to rectify the breach. A non default termination could then be actioned. The remaining balance would have to be paid off at the rates / instalments of the agreement.
b) If the debtor had accepted the repudiation of the agreement, the OC would not be able to issue a valid DN as the agreement did not endure so there would be a stand off.
c)Some other situation???

[pt2537]

Re: Contracts, Termination, Repudiation and Rescission

If a creditor cannot terminate because of a bad DN what would the status of the agreement be? Would:

a) The agreement endure, the creditor then could issue a revised- corrected- DN. The debtor would have time to rectify the breach. A non default termination could then be actioned. The remaining balance would have to be paid off at the rates / instalments of the agreement.
b) If the debtor had accepted the repudiation of the agreement, the OC would not be able to issue a valid DN as the agreement did not endure so there would be a stand off.
c)Some other situation???

Id suggest (A)