Contracts, Termination, Repudiation and Rescission

[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

[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?

[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

[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

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

[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.

[basa48]

Re: Contracts, Termination, Repudiation and Rescission

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

[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?

[volvodriver]

Re: Contracts, Termination, Repudiation and Rescission

a bad notice can lead to no enforcement

Discuss

[toomanycalls]

Re: Contracts, Termination, Repudiation and Rescission

a bad notice can lead to no enforcement

Discuss

So no enforcement but does that mean they can go back and try again with a new DN?

[basa48]

Re: Contracts, Termination, Repudiation and Rescission

So no enforcement but does that mean they can go back and try again with a new DN?

Apparently - yes !!!!

[volvodriver]

Re: Contracts, Termination, Repudiation and Rescission

But does it mean that they can reissue as many notices as they want, but after a bad notice there can NEVER be any enforcement?

I dont know the answer, I have no legal knowledge, but a pretty good grasp of the English language.

a bad notice can lead to no enforcement

[Lord_Alcohol]

Re: Contracts, Termination, Repudiation and Rescission

If this is the case (and we think it is) then service of a new DN may raise the following questions;

1. Was the earlier mistake an offence under the 2008 CPRs at Reg 5 (misleading business practices) or was it just an honest mistake?
2. Was activity following the mistake an offence under the 2008 CPRs at Reg 7 (aggressive business practices) or was collection/recovery/action an unfortunate side-effect of the earlier honest mistake?
3. Does the period between the bad DN and the good DN fall under S140? Ie, did the OC abuse his position to introduce bias in the relationship in his favour and, if so, what are the risks that a court would discharge the debtor from the debt?
4. Does service of a new DN following a long period of aggressive (but erroneous) recovery action provide grounds for compensation under S140?
5. Has the 1998 DPA been breached where the bad DN prevents remedy, opening up a claim for compensation under S13 of that Act?
6. Does the OC want the contract to be reopened to a former customer who he has already marked with the CRAs as a bad risk? If he does, is there a risk that the OC falls foul of the OFT's irresponsible lending rules?
7. Is it actually possible to restore the relationship to how it was, or will the debtor (now customer again) forever worry that the OC will repeat his various mistakes?
8. Were goods repossessed? If so, how is the debtor to be compensated for unlawful seizure?

I'm sure there are other questions for the OC to consider, so it may not be as easy for him as some might think (unless there has been little/no activity between bad DN and good).

[pt2537]

Re: Contracts, Termination, Repudiation and Rescission

If this is the case (and we think it is) then service of a new DN may raise the following questions;

1. Was the earlier mistake an offence under the 2008 CPRs at Reg 5 (misleading business practices) or was it just an honest mistake?
2. Was activity following the mistake an offence under the 2008 CPRs at Reg 7 (aggressive business practices) or was collection/recovery/action an unfortunate side-effect of the earlier honest mistake?
3. Does the period between the bad DN and the good DN fall under S140? Ie, did the OC abuse his position to introduce bias in the relationship in his favour and, if so, what are the risks that a court would discharge the debtor from the debt?
4. Does service of a new DN following a long period of aggressive (but erroneous) recovery action provide grounds for compensation under S140?
5. Has the 1998 DPA been breached where the bad DN prevents remedy, opening up a claim for compensation under S13 of that Act?
6. Does the OC want the contract to be reopened to a former customer who he has already marked with the CRAs as a bad risk? If he does, is there a risk that the OC falls foul of the OFT's irresponsible lending rules?
7. Is it actually possible to restore the relationship to how it was, or will the debtor (now customer again) forever worry that the OC will repeat his various mistakes?
8. Were goods repossessed? If so, how is the debtor to be compensated for unlawful seizure?

I'm sure there are other questions for the OC to consider, so it may not be as easy for him as some might think (unless there has been little/no activity between bad DN and good).

If goods are taken
then you could claim in conversion, the CPUT regs arent actionable by a private individual i believe on those parts, only by the specific authority

[Guest]

Re: Contracts, Termination, Repudiation and Rescission

HI
I think a lot of the problem is that some don’t seem able to understand the concept that the enforcement cannot happen if the default notice is defective.
We must remember that the act says that the creditor is not entitled to so therefore he cannot, the fact that he takes steps to do what he is not entitled to is not important, in law he cannot.
I always get the mick taken for using simplistic examples so here is your chance to have a go, but consider this.
I have a lady friend who married a man who was married before.
She accepted his termination, oops sorry I meant proposal.
The got the licence, they got the invitations, she walked down the aisle.
That night on their honeymoon he passed away from over exertion.
When the will was read his new wife got nothing at all from his estate, nope his first wife got it all.
You see he was not entitled to marry so even though he went through all the actions in law none of it happened.
OK
So now chip away
Peter