Contracts, Termination, Repudiation and Rescission

[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

[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?

[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.

[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?

[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

[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

[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:

[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.

[ed.]

Re: Contracts, Termination, Repudiation and Rescission

Basa, hence the size of the increase I'd look at as a material change to the contract, allowing you to argue for a freeze of interest, a termination, simply leaving the balance.

Doesn't require left field unenforceability arguments, it's a strict fairness issue based on the fact you've been put at a clear disadvantage therefore the appropriate action is a freeze on the account owing to unconscionable interest rises but you pay the balance prior to the rise and never use it again.

I'd look at it from that direction rather than anything else chap.

Sorry if I've come across wrong, didn't mean to, what I'm trying to say is looking for flaws all the time in many ways makes the situation worse, sometimes it's easier to approach it from a different angle and get it under control rather than looking for technicalities.

And I completely agree on the last bit, society and the government have encouraged debt on an unmanageable scale. It's fine when things are going well, but it bites when they don't...that's never considered with regulations being relaxed because the Treasury does so well out of it and it's plebs like us who pay for it when it goes tits up.

Interest rates are going to go up simply because of inflation, but that doesn't take into account inflation wouldn't be so high if there were proper regulation of utilities and the profits they make, supermarkets and the profits they make and even down to petrol which the Gov creams money from.

The focus is maintaining tax income, which is the wrong way of looking at it...the angle should always be how to put more money in the pockets of families, not how to maintain the Treasury receipts.

Until that changes we'll be permanently shafted.

Mr Biker - no the debtor wins in my world, the debtor just doesn't rely on spurious technicalities in an attempt to avoid their obligations.

You might think that's a subtle, maybe a cruel difference....but it's a difference nontheless and whilst I love attempting left field arguments in communications and have often been accused of inventing my own law by my particular spin, there's a difference between taking the risk yourself, and then in a thread like this potentially encouraging other people who don't grasp the law as well into doing something daft that would make their situation worse.

You're missing the trick in your comment that because I said a debtor should have 14 clear days to rectify any breach. If the Creditor cannot get the DN correct, then the clear 14 days doesn't start until they can - moreover you can then look at a faulty DN only giving rise to the arrears as per Woody.

Failing that, as you reference your cases, you've had 2 years to save the required figure to rectify the breach, and if necessary you can then based on their DN error demand all interest and charges refunded incurred prior to that point, once you settle the correct DN should one ever be supplied and then the agreement continues.

If the DN is faulty and you don't push for arrears are due only, then the correct arrears for a DN fix become the arrears at the point as they should've been. Until the DN is correct the account is froze and you have to argue such.

You can take it either way...I don't see a faulty DN as being unfair in itself...one example of multiple failures by a creditor yes, but enough to claim no balance is now owed at all as per this thread...no chance.

Again apologies if I wasn't clear enough, hopefully the above let's you know where I'm coming from. If somebody isn't prepared to go to court on a faulty DN and argue Woody to it's fullest, then the next argument is the 14 days doesn't start until the DN is correct.

This is where Brandon? fell down in my opinion, it wasn't argued that a creditor could get the DN wrong and the rectify, but that the 14 days (irrespective of whether the breach could be remedied in that time) didn't start until the DN was correct.

Long week, if I've got my caselaw wrong forgive me!

Dicky - I disagree we should be both moral and act in accordance with the strict terms....ie if you have an agreement that is irredeemably unenforceable the offer to settle the principle borrowed (unless already repaid) should be made.

I accept a lot won't agree with me on that, but that's my standpoint and always has been.

Again maybe I haven't come over right because I was talking generally in one of my time of the month rants lol, and didn't mean to pick out or offend anyone, because those who irk me such as the Rankine's are removed from the folks on here.

I completely agree the creditors don't act morally or in accordance with the CCA. If they did, I wouldn't be here or on other sites and I wouldn't be as passionate/angry/mental (pick your own) as I am.

I just don't want people to drop to their level is all.

lol, I apologise for the wife comment, that didn't come over as intended chap. So I'll take the virtual slap there. I was trying to make the point that some are jumping on the bandwagon for personal gain, where no unfairness exists and in doing so it actually erodes the protection that should be automatically applied to those who were clearly treated wrong.

I know a chap who worked in a claims department and in the early days, they used to simply repay PPI claims even without basis just to save on the cost of dealing with them and looking at them back when it was new as a customer service exercise. So people who jumped on the press bandwagon and never deserved a repayment helped create the case now where creditors are fighting tooth and nail EVEN when it's clear cut that the customer was ripped off.

I didn't make myself clear, so I'm big enough to apologise.

BUT I stand by my point that if the creditor does act properly, the DN etc is correct, and the debtor makes no attempt to organise a rectification that is not unfair.

Other than that, I'm a Brummie mate, apparently we are thick as they come lol

But yeah, we should always do the moral thing or we become that which we despise. If you disagree, fair enough, I don't.

In your example in my opinion the consumer, let alone the solicitor, should've paid more attention. The solicitor fouled up, therefore it's actionable...the consumer should always read what they sign.

Whether you assume this is me being 'perfect' again or not, and believe me, my debt proves I'm not, long before I found sites like this, long before I heard of bank charges outside of getting a few and so on, I had the bank who likes to say 'bail me out' attempt to sell me buildings and contents insurance on a council house. They knew it was a council house because they tried to sell this insurance product whilst I was moving into it and meeting them for a slight increase in my OD and a consolidation loan.

I knew enough in my financial naivety to leave the insurance as a quote only so I could check with my dad. I walked out however with a grand increase in my OD, and a 9K loan - I was very low paid self employed at the point.

I didn't catch most of it, but I caught the insurance...

Make of that what you will given what I've said.

LA - unfairness and discriminatory....chase that, not unenforceability is my point. And for your second post, thank you - you get where I'm coming from here but I don't agree as far as no going back....it's then a different argument about prejudice on CRF's.

[New_Age_Biker]

Re: Contracts, Termination, Repudiation and Rescission

Hi Ed
Thanks for the comments
I was not trying to imply anybody was trying to avoid or look for technicalities, I am merely encouraging debate.

I asked what amount would be the arrears in your scenario, after reading your reply I understand your position to be

OC issues faulty Dn (real arrears lets say £500 (2*£250 payments)) for £10k
Debtor does nothing
2 years later after much letter writing
OC issues correct Dn for £500
Debtor
a) Pays £500 & creditor says great, glad to have you back as a money making machine (sorry- customer) we will carry on as though the default never happened
b) As above but OC says you are a bad payer so we will terminate on notice. Debtor then has to pay at contractual payments
Or
c) Debtor does nothing & gets a day out in court

a) Should happen but never will
b) May be legally correct but how does that equate to carrying on as though the default had never happened
c) Is the most likely because the debtor has other creditors who can write 14 days & count arrears properly

If the debtor had not Cra reported you may have been able to take out a loan at a sensible rate, remortgaged or refinanced in some way to pay the entire balance. As your credit file is now trashed you cannot.
Are you sure, the default never happened now?

[pt2537]

Re: Contracts, Termination, Repudiation and Rescission

Hi Ed


If the debtor had not Cra reported you may have been able to take out a loan at a sensible rate, remortgaged or refinanced in some way to pay the entire balance. As your credit file is now trashed you cannot.
Are you sure, the default never happened now?

But this is something of a red herring

If the Debtor is unable to pay his debts when they fall due, then there is an argument (from an Insolvency barrister i know ) that they are essentially bankrupt

Also, i dont follow how a debtor who cannot make payments can then be expecting another organisation to then refinance them. Surely, unless im missing the point, they wont be able to pay the new company or the old one.

And if they can pay, then they should seek a time order or an order under s140 allowing more time to pay

There was a case where the court did just that, lowered the payments, extended the term, discharged the arrears, according to the case report. That was the Bentley vs Blemain case

[New_Age_Biker]

Re: Contracts, Termination, Repudiation and Rescission

Hi Pt
Thanks for the input. I see your argument with regard to insolvency. However it is possible that a debtor has assets, friends he may borrow from etc so refinance may be possible.

The point under discussion was merely to decide what arrears would be on the correct Dn when issued and the likely consequences to both debtor & creditor

There must also be a an argument of the damaged credit file

[pt2537]

Re: Contracts, Termination, Repudiation and Rescission

Hi Pt
Thanks for the input. I see your argument with regard to insolvency. However it is possible that a debtor has assets, friends he may borrow from etc so refinance may be possible.

The point under discussion was merely to decide what arrears would be on the correct Dn when issued and the likely consequences to both debtor & creditor

There must also be a an argument of the damaged credit file

I do not consider that either reporting to the CRAs or the related activities referred to in (i) and (ii) come anywhere near amounting to enforcement if activities (iii) to (vi) are not enforcement. These activities are concerned with reporting to CRAs or other third parties and are not even steps taken prior to enforcement such as threatening proceedings would be. Even if one accepted (which for reasons given earlier in this judgment I do not) the claimant's somewhat pejorative categorisation of reporting to CRAs as being motivated by the desire to pressurise the claimant into paying the outstanding balance, at its highest that is an attempt by indirect means to persuade the claimant to pay. If demanding payment directly or through a third party does not amount to enforcement, it is difficult to see how such indirect means could do so, even if the claimant were right as to the relevant motive of the bank.

from McGuffick,

and i expect the Court would not take the view that the trashed credit file where a debtor failed to maintain his payments, is unfair on the debtor

[New_Age_Biker]

Re: Contracts, Termination, Repudiation and Rescission

ok, I will accept CRA reporting after a mere 2 missed payments, now how much aare the arrears?

[New_Age_Biker]

Re: Contracts, Termination, Repudiation and Rescission

Just as an aside to the main point under discussion.
I thought the Dn was a chance for the debtor to rectify as though the Default had never happened, this does not class CRA reporting as enforcement either

If the creditor has 2 or more chances at a Dn when does the creditor have his chancess with his credit file?