Contracts, Termination, Repudiation and Rescission

[basa48]

Re: Contracts, Termination, Repudiation and Rescission

The analogy was that an action can actually be taken but deemed in law not to be, as the termination after an ineffective default.

It wasn't meant to be a factual comment. Anyway it obviously did not work for you.

Peter

It's not that I don't understand your arguments, I do. I do however resent the implication (however subtle) that I cannot follow simple arguments.

It is more I don't understand the effect of your arguments on the law. I follow that with a defective DN a creditor cannot 'take the next step' i.e. terminate the agreement and demand sums previously not due (i.e. the full outstanding balance).

However we are faced with the situation where the termination is deemed not to have been effective, i.e. the agreement endures up to date. However the creditor has most definitely stated by word and action that the agreement is no more. The creditor understands this, as does the debtor. The credit facility has been withdrawn and the debtor has made no scheduled repayments.

This to me is a paradox, the agreement endures but neither party is active in its operation.

How can this be cured? By the creditor inviting the debtor to reaffirm the agreement, I don't think so.

Hopefully tomorrows publication of pt's High court case will make everything clear. But I doubt it will be what anyone expects or hopes for!

[Ihaterbs]

Re: Contracts, Termination, Repudiation and Rescission

It seems to me that if the OC serves a new DN but has no interest in re-opening the contract in order to provide for S89 (setting matters back to how they were as though the breach never occurred), he will require a new type of DN (not the S87 variety) because he will be unable to comply with the 1983 Consumer Credit (Enforcement, Default and Termination Notices) Regulations;

IF THE ACTION REQUIRED BY THIS NOTICE IS TAKEN BEFORE THE DATE SHOWN NO FURTHER ENFORCEMENT ACTION WILL BE TAKEN IN RESPECT OF THE BREACH

So this rules out a S87 DN because he will thereafter be unable to do anything more than claim the original arrears.

If his second DN claims "arrears" up to the current date, then it is automatically incorrect because the "arrears" are not arrears, which can only form when payments are missed (remember that the OC has removed entitlement to make regular payments).

Peter has said that the contract is closed ("why would the creditor re-open a contract after the debtor defaulted"), but how is this? He had no entitlement to close it, so it must still be open. And it needs to be open in order to serve a new DN, and it has to stay open after remedy in order to be a S87 DN.

So I do not have a clue what happens if a new DN is served, and I suspect neither does anyone apart from our esteemed PT....


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...plus of course the OC is in breach of contract by refusing contractual payments...

This isn't getting too surreal is it?

The contract doesn't end until the relationship is satisfied.

[Lord_Alcohol]

Re: Contracts, Termination, Repudiation and Rescission

It seems to me that if the OC serves a new DN but has no interest in re-opening the contract in order to provide for S89 (setting matters back to how they were as though the breach never occurred), he will require a new type of DN (not the S87 variety) because he will be unable to comply with the 1983 Consumer Credit (Enforcement, Default and Termination Notices) Regulations;

IF THE ACTION REQUIRED BY THIS NOTICE IS TAKEN BEFORE THE DATE SHOWN NO FURTHER ENFORCEMENT ACTION WILL BE TAKEN IN RESPECT OF THE BREACH

So this rules out a S87 DN because he will thereafter be unable to do anything more than claim the original arrears.

If his second DN claims "arrears" up to the current date, then it is automatically incorrect because the "arrears" are not arrears, which can only form when payments are missed (remember that the OC has removed entitlement to make regular payments).

Peter has said that the contract is closed ("why would the creditor re-open a contract after the debtor defaulted"), but how is this? He had no entitlement to close it, so it must still be open. And it needs to be open in order to serve a new DN, and it has to stay open after remedy in order to be a S87 DN.

So I do not have a clue what happens if a new DN is served, and I suspect neither does anyone apart from our esteemed PT....


------------------------------- merged -------------------------------
...plus of course the OC is in breach of contract by refusing contractual payments...

This isn't getting too surreal is it?

[Lord_Alcohol]

Re: Contracts, Termination, Repudiation and Rescission

Peter

1. Would breaches (offences?) under CPUT support a S140 defence?
2. Why do you say that S140 would not apply to the period between bad DN and good, during which the OC has caused huge problems?
3. The DPA could be breached if the notice of intention to record the default is contained within the DN (as a separate 28-day warning), but the breach cannot be cured because the DN is faulty (eg, by demanding the balance). The recording of the default cannot be avoided, whereas had the DN been good then it could have been (am talking about the default record, not the payment history).
4. To serve a new DN the contract must be open, because the debtor has an opportunity to remedy and continue as before. If the contract is not re-opened, and the debtor remedies, what then? How does S89 apply if no contract is open on service of a new DN?
5. Similarly, if the contract endures and the breach is remedied in the second DN, what sort of relationship is it between OC and debtor? An uncomfortable one I would think.

TIA

Re: Contracts, Termination, Repudiation and Rescission

So now we have financial bigamy to confuse us even more.

That's about as clear as the mud on Weston-Super-Mare beach at midnight when there's no moon or cloud.

Sorry dont get the analogy, mud whats that got to do with anything.
I think you are just trying to confuse:beagle:

Peter

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?

As Pt said that would be a matter for the regulator

1. 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?

Dont think trying to collect a debt by issuing a notice even if defective could be classed as this any way answer above applies

1. 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?

NO

1. Does service of a new DN following a long period of aggressive (but erroneous) recovery action provide grounds for compensation under S140?

No if the debt recovery is overly aggressive then the Anti harrasment legilsation is the way to go

1. Has the 1998 DPA been breached where the bad DN prevents remedy, opening up a claim for compensation under S13 of that Act?

HOw would the DPA be breached they are usually informed of performance of payment, unless they have registered a judgement and that is unlikely

1. 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?

Dont udnerstand this the creditor would not want to reopen if the customer defaulted why shoud he?

1. 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?

Why should the creditor want to, sorry not with you are you saying the debtor did not miss payments?

1. Were goods repossessed? If so, how is the debtor to be compensated for unlawful seizure?

As PT says the debtor could take action for convertion(theft). The reason is quite interesting. It is because the agrement would not have been termiated,it could not be on the back of a defective DN, therefore the goods where still the property of the debtors.

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).

Had a few minutes

Peter

Re: Contracts, Termination, Repudiation and Rescission

i think most of us do understand "the concept",

what we DONT understand is that an act which is supposed to be for the PROTECTIOn of the consumer seems to allow the creditor to terminate an agreement- to give the impression to the debtor that it has been terminated properly and then months- often maybe a year later and AFTER the creditor has trashed the consumers credit files - realise- often not until trial- that in fact he mistakenly terminated.. and then seems able ad infinitem tocarry on re serving as many DN's until he happens to get one right

that the consumer has not been disadvantaged (not that this was a requirement in parliaments mind at the time of drafting the act) by the creditors actions is ludicrous.

Hi
Seems to be a lot of different issues her not quite sure what exactly you consider to be ludicrous.

That the crditor can termiate an agrement?

That the creditor can make an entry with a CRA if thedebtor defaults?

If a mistake is made surely there are provisions to rectify them by either regulatory or more legitimate legal means.

As you said in a post earlier in this thread a DN is mearly a notice why whoud it not be reissued, as long as the stutory period is given with the correct information.

I think that you will find that section 87 was an act of parliament.

Also just to mention if you read the Crowther reposrt (as i have all six hudrred pages,how sad am i) You will see that this act was not only enacted to protect debtors but also creditors.
Yes thats right it ensures that as long as they stick to the rules then they will be a ble to enforce their agrements and get there money. Just a point

Peter

[Lord_Alcohol]

Re: Contracts, Termination, Repudiation and Rescission

It's no surprise many of us thought that our contracts had been terminated - because that's what the likes of RBS, Lloyds, Halifax and other leading (trusted?) financial institutions told us! In official documentation!

So please take it easy Peter. You cannot possibly pour scorn on those of us that have taken the bank at its word.

As for this...

are you suggesting the creditor should be penalised for taking a debtor to court when he has defaulted his agrement, i dont think that will wash in the real world

...surely the debtor has defaulted after expiry of the DN, but if the DN cannot be accommodated (eg, the balance is required for remedy, not the arrears), then the default becomes a fait accompli. So yes, I would say that the creditor should be penalised for not following prescribed procedures, otherwise creditors will be going berserk and demanding their money at the drop of a hat (and not as per contract or regulations).

(I say this using the ICO definition of default (ie, the position when the contract is passed fixing, which is when the breach is not remedied in the prescribed time)).

Anyway, fair play to you Peter - you always insisted that the contracts endure, and a few of us couldn't believe it (especially as the OC had told us it was game over).

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

I have this annalogy before and this really is a bad one.
Firstly there is a sanction he cannot enforce for a further period that is the one , the only one available.
Seconldly and more importantlyif the action of termination was punishable by some legal sanction other than this how would any creditor ever get to court?
It is for the judge to decide if the DN the subsequent termination are lawful, and the enforcemant can take place are you suggesting the creditor should be penalised for taking a debtor to court when he has defaulted his agrement, i dont think that will wash in the real world.
Peter

Re: Contracts, Termination, Repudiation and Rescission

Yes, but we are seeing a trend of arguments being developed which take things that step too far.

The circumstances you refer to above will be brought into light with the High Court Judgment being handed down tomorrow.

But these repudiatory arguments which have , and seemingly keep failing, need to be put to bed

Whole heartedley agree.

Peter

Re: Contracts, Termination, Repudiation and Rescission

Hi
Realise I should not refer to myself really this should be about the issues. But briefly there is a faction of here that I am banging some sort of self-righteous drum, I assure you I am not, those who have known me from over the road know I have done a lot of work on methods of challenging agreements in the course of defending debtors against the wrong doings of DCAs etc.
Thing is I take a pragmatic view of what will work and what will not, and unfortunately what worked five no a year ago does not necessarily work now, and some ideas never will work as the one prescribed on here.
When this first came up in surfaceagents post some years ago I though ,god I hope the CMCs don’t get hold of this idea, it sounds just credible enough for them to persuade people to hand over their hard earned cash before it is shown to be nonsense. I suppose that is why I went in on it so hard. Pleased this did not happen i think it was a bit to far left field even for them.
It is a shame that we on these forums have not been able to get our collective act together and dissuade the people who have already gone down this path.
Peter
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The problem with the analogy Peter is that Polygamy is a crime and punishable at law by fine or imprisonment. So it isn't really a very good analogy as in the case of a faulty DN there is (apparantly) no crime and no punishment.

This is why most people find it so hard to swallow a law that has no sanction for breaking it.

The analogy was that an action can actually be taken but deemed in law not to be, as the temination after an inefective default.

It wasnt meant to be a factual comment. Anyway it onviously did not work for you.

Peter

[basa48]

Re: Contracts, Termination, Repudiation and Rescission

Well i did expect my analogy to go over some peoples head gratified to see not everyones.

Peter

The problem with the analogy Peter is that Polygamy is a crime and punishable at law by fine or imprisonment. So it isn't really a very good analogy as in the case of a faulty DN there is (apparantly) no crime and no punishment.

This is why most people find it so hard to swallow a law that has no sanction for breaking it.

Re: Contracts, Termination, Repudiation and Rescission

Yes well the problem with this Peter is that, had the husband survived his honeymoon and using the current view on regulated contract termination, on being found out about his bygamy he could have merely divorced his first wife to enable him to marry his second, and would not be "sanctioned" for doing so.

He could then have gone on to over-exert himself, die, and leave all to his new wife.

I think your entertaining analogy merely shows how ludicrous this position is, even though it appears to be the adopted view of the legal community.

Well i did expect my analogy to go over some peoples head gratified to see not everyones.

Peter

[diddydicky]

Re: Contracts, Termination, Repudiation and Rescission

i think most of us do understand "the concept",

what we DONT understand is that an act which is supposed to be for the PROTECTIOn of the consumer seems to allow the creditor to terminate an agreement- to give the impression to the debtor that it has been terminated properly and then months- often maybe a year later and AFTER the creditor has trashed the consumers credit files - realise- often not until trial- that in fact he mistakenly terminated.. and then seems able ad infinitem tocarry on re serving as many DN's until he happens to get one right

that the consumer has not been disadvantaged (not that this was a requirement in parliaments mind at the time of drafting the act) by the creditors actions is ludicrous.

[Lord_Alcohol]

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

Yes well the problem with this Peter is that, had the husband survived his honeymoon and using the current view on regulated contract termination, on being found out about his bygamy he could have merely divorced his first wife to enable him to marry his second, and would not be "sanctioned" for doing so.

He could then have gone on to over-exert himself, die, and leave all to his new wife.

I think your entertaining analogy merely shows how ludicrous this position is, even though it appears to be the adopted view of the legal community.