Contracts, Termination, Repudiation and Rescission

[mystery1]

Re: Contracts, Termination, Repudiation and Rescission

How does that fit in to s 140 ?

It must be somewhat unfair to tell a borrower the agreements over when it's not whether that statement is deliberate or not.

M1

[New_Age_Biker]

Re: Contracts, Termination, Repudiation and Rescission

A worrying thought, some people, myself included have accepted the repudiation - based on advice read here and on CAG believing this to be the way forward.
If we are returned to the agreement because they cannot terminate there will be years worth of late payment charges & interest that have been added whilst we are all jockeying for position.
Surely this is not what the CCA was enacted for.
PT, if this in any way drifts into the areas decided in your judgement that you cannot reveal plese just say so, I would not wish to compomise your position.

[pt2537]

Re: Contracts, Termination, Repudiation and Rescission

A worrying thought, some people, myself included have accepted the repudiation - based on advice read here and on CAG believing this to be the way forward.
If we are returned to the agreement because they cannot terminate there will be years worth of late payment charges & interest that have been added whilst we are all jockeying for position.
Surely this is not what the CCA was enacted for.
PT, if this in any way drifts into the areas decided in your judgement that you cannot reveal plese just say so, I would not wish to compomise your position.

Im sorry but i dont follow that argument

Repudiation occurs when one party refuses to perform or fulfill the obligations of the contract basically, so who is the repudiator?

Who is the contract breaker? arent you the one intimating that you no longer intend to be bound by the contract by refusing to perform your obligations?

and in any event, a commentator on the Act pointed out that the sanctions of repudiation are not prescribed by the Act, therefore as the Act itself states, only a sanction criminal or civil is available if prescribed by the Act

The Court of Appeal rejected an argument for restitution under the common law doctrine of mistake on the same basis as the Court said that recovery of monies paid under an unenforceable agreement was only available if there was a provision in the Act such as for secured lending.

So applying that, the act may remove the argument in any event.

if you look at s170 it is clear there on that point

[New_Age_Biker]

Re: Contracts, Termination, Repudiation and Rescission

Sorry if I did not make myself clear.
If there has been a breach of the agreement.
If the DN is invalid (no matter in what way)
I understand you to say that the agreement cannot be terminated by the creditior.

If this is the case and the agreement endures the creditor simply issues a new, compliant DN
All charges, interest, penalties etc can now be enforced if the default situation continues.

How is it possible to issue a replacement DN? I thought the prupose of a Dn was to give the debtor a last chance to correct a breach as though it had never happened.
As this is unlikely to happen ( CRA reporting, likely termination on notice are likely) where would that leave the creditor and debtor?

[Lord_Alcohol]

Re: Contracts, Termination, Repudiation and Rescission

Could the answer to this be simpler than we think?

You get dragged to court on the back of a defective DN. The defence demonstrates that the agreement was terminated where there was no entitlement, and strictly speaking the contract endures. For the creditor to get his money, he would then have to persuade the court to completely ignore all of S140.

Were the debtor to claim unfairness under S140, any court would surely have to accept that dragging someone to court where there is no lawful entitlement is grossly "unfair", and that to then reinstate the contract as it was (in order for a new DN to be issued) compounds that unfairness.

S140 also provides scope to a court to apply sanctions against a creditor.

Perhaps all that is required is for the debtor to claim unfairness and for the creditor to prove to the court that his actions were fair?

[toomanycalls]

Re: Contracts, Termination, Repudiation and Rescission

Could the answer to this be simpler than we think?

You get dragged to court on the back of a defective DN. The defence demonstrates that the agreement was terminated where there was no entitlement, and strictly speaking the contract endures. For the creditor to get his money, he would then have to persuade the court to completely ignore all of S140.

Were the debtor to claim unfairness under S140, any court would surely have to accept that dragging someone to court where there is no lawful entitlement is grossly "unfair", and that to then reinstate the contract as it was (in order for a new DN to be issued) compounds that unfairness.

S140 also provides scope to a court to apply sanctions against a creditor.

Perhaps all that is required is for the debtor to claim unfairness and for the creditor to prove to the court that his actions were fair?

I for one would like to think so.

[basa48]

Re: Contracts, Termination, Repudiation and Rescission

So the situation now is a creditor can issue as many invalid DNs and termination notices as he wishes until he happens to get one right. He then can drag your ass through court.

In the meantime the poor debtor doesn't know whether he is coming or going, doesn't know which DN is right or how much he is required to pay and by when, then ends up in court because he hasn't paid or can't pay.

Yup - that's consumer protection at its best!!!

Maybe we debtors should all hand over our house keys now, cos' it seems sure as eggs are eggs the judiciary are hell bent on turning the CCA1974 into a lenders charter such that we'll end up owing them anyway.

[New_Age_Biker]

Re: Contracts, Termination, Repudiation and Rescission

LA, not sure of the significance of S140, please enlighten me - I don't want the situation to be as Basa views it...

[basa48]

Re: Contracts, Termination, Repudiation and Rescission

LA, not sure of the significance of S140, please enlighten me - I don't want the situation to be as Basa views it...

s140 is the Unfair Relationships clause in CCA2006:

140A Unfair relationships between creditors and debtors
(1) The court may make an order under section 140B in connection with a
credit agreement if it determines that the relationship between the
creditor and the debtor arising out of the agreement (or the agreement
taken with any related agreement) is unfair to the debtor because of one
or more of the following—
(a) any of the terms of the agreement or of any related agreement;
(b) the way in which the creditor has exercised or enforced any of
his rights under the agreement or any related agreement;
(c) any other thing done (or not done) by, or on behalf of, the
creditor (either before or after the making of the agreement or
any related agreement).

The idea is the creditor with an invalid DN and subsequent termination has created an unfair relationship by terminating where he had no entitlement and the termination is therefore ineffective.

Quite where this gets anyone is beyond me since the way the courts are behaving I reckon they will just set the clock back to pre debtor breach time and start again. No sanction on the creditor for breaking the law.

Unfortunately 'pt' is unable to explain why this ruling is:

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

Personally I don't get it.

[Lord_Alcohol]

Re: Contracts, Termination, Repudiation and Rescission

Looking at it from the other angle...

1. Would a court really allow a creditor to re-open a contract after "terminating" it and dragging the debtor to court just to re-issue a good DN?

2. S138 considers an agreement "extortionate" if it contravenes "ordinary principles of fair dealing", and this is expanded by the new S140. It is clear that if someone is dragged to court by a lender when there is no entitlement, a court must consider the "fairness" of that. But how would a court come to the conclusion that taking such action was "fair"? Clearly, it is not.

3. It may also be that the debtor's "human rights" are infringed. I know nothing of the legalities of HR, but I would have thought that there exists in this country a view that courts are there to sort out legitimate disputes, and not as an unjustified threat to be used by another party in order to obtain what he wants. Bear in mind that it really costs very little (proportionately) for a bank to sue a debtor, wheres for the debtor it can be a life-changing event.

4. By taking the debtor to court on the back of a bad DN, the lender immediately falls foul of Reg 5 of the 2008 CPRs (misleading business practices) plus Reg 7 (aggressive business practices) (by suing the debtor where no entitlement exists). While there is no ability for a private person to use these regs in an action, I understand that they nevertheless cannot but support a S140 claim (ie, general "unfairness").

5. Then there is S89. For a court to just say to the creditor that his DN is bad and he must serve a new one would have to ignore all of S89. The debtor can never set things back to how they were as though the breach "had never occurred" once he's dragged to court. For this section to work for both parties, a new breach would have to be invented.

It seems to me that now we know that the agreement is not terminated, or has been terminated without entitlement, we can look at S140 to apply sanctions on the creditor for his various mistakes and his subsequent activities, assuming this goes to court where the debtor can claim unfairness under S140B(2).

Just a few thoughts...

[pt2537]

Re: Contracts, Termination, Repudiation and Rescission

s140 is the Unfair Relationships clause in CCA2006:



The idea is the creditor with an invalid DN and subsequent termination has created an unfair relationship by terminating where he had no entitlement and the termination is therefore ineffective.

Quite where this gets anyone is beyond me since the way the courts are behaving I reckon they will just set the clock back to pre debtor breach time and start again. No sanction on the creditor for breaking the law.

Unfortunately 'pt' is unable to explain why this ruling is:



Personally I don't get it.

But the point of a default notice is A) to inform the debtor what he has done wrong and B) what he needs to do to put it right.

A creditor will only need to serve a default notice if YOU fail to honour the terms of your contract.

So i dont get why people all of a sudden want to use the default provisions as being some method of defeating the CCA, the CCA is an information act, its there to give information to the debtors,

quite rightly it is established in law, a bad notice can be remedied, and the court has held that the same applies here and that the creditor effectively cannot terminate under a bad notice.

As for remedies

Have we all forgotten about s129?

[New_Age_Biker]

Re: Contracts, Termination, Repudiation and Rescission

Thanks for the opinions, would the revisions of the 2006 ammendments apply to earlier agreements?
I was looking at the CCA as enacted, hence the confusion
As I understand it PT's latest victory will help clarify once he can discuss it

[basa48]

Re: Contracts, Termination, Repudiation and Rescission

quite rightly it is established in law, a bad notice can be remedied,

So in effect yet another win for the lenders.

Make as many mistakes as they like, they can always be remedied despite the stress this puts on the debtor!

All the debtor can wish for is extra time to pay. Not exactly what I envisioned as "very, very much in favour of the debtor."

[pt2537]

Re: Contracts, Termination, Repudiation and Rescission

So in effect yet another win for the lenders.

Make as many mistakes as they like, they can always be remedied despite the stress this puts on the debtor!

All the debtor can wish for is extra time to pay. Not exactly what I envisioned as "very, very much in favour of the debtor."

so, let me get this straight

Lender gives notice that is bad

the only defect is that he dont allow 14 days for debtor to remedy but in any event if the debtor had 20 years he still wont be able to remedy

and then as a consequence for this minor slip of the pen the creditor should lose all his money?

Is that what we are suggesting here?

I thought that if the notice was bad, then that provides protection for the debtor from enforcement procedures,

S87 was never designed to allow a debtor to avoid his debt, you only need to read Woodchester vs Swain for that

In woodchester, the court still ordered payment of arrears even though the notice was bad, so it ought to be obvious that you arent gonna escape through the net with s87

[basa48]

Re: Contracts, Termination, Repudiation and Rescission

so, let me get this straight

Lender gives notice that is bad

the only defect is that he dont allow 14 days for debtor to remedy but in any event if the debtor had 20 years he still wont be able to remedy

and then as a consequence for this minor slip of the pen the creditor should lose all his money?

Is that what we are suggesting here?

I thought that if the notice was bad, then that provides protection for the debtor from enforcement procedures,

S87 was never designed to allow a debtor to avoid his debt, you only need to read Woodchester vs Swain for that

In woodchester, the court still ordered payment of arrears even though the notice was bad, so it ought to be obvious that you arent gonna escape through the net with s87

No

In my case (and there are many similar) the lender issued the DN asking for the WHOLE outstanding debt (not just the arrears).

There was no way any debtor could find the whole amount in 14 days if they were struggling to find minimum payments. When I couldn't pay the account was terminated (or so I thought!!).

I am now faced withe the lender re-issuing a DN asking for who knows how much arrears now the account has been 'on hold' for 18 months.

Result??!! Yeh - for the bank!

(Edit: I never did think that 'de minimus' defects in DNs should write off a debt).