Contracts, Termination, Repudiation and Rescission

[New_Age_Biker]

Re: Contracts, Termination, Repudiation and Rescission

Garlok
I thank you for taking the time to try to research this issue with the means at your disposal.
It would appear that there is no real answer to the questions, we still only have opinions.

Interesting line of thought about the phone calls though.
From memory I have only received such calls after the issue of a faulty Dn

[Garlok]

Re: Contracts, Termination, Repudiation and Rescission

Sorry I couldn't be of more help N-A-B. It might just be me but the further I dig the more questions I seem to throw up and never get a conclusive answer to any of them

best regards
Garlok

[Lord_Alcohol]

Re: Contracts, Termination, Repudiation and Rescission

I cannot see how the creditor can be the person who repudiates, i dont follow that argument when it is the debtor who fails to pay the contractual instalments.

The creditor terminates the contract but the debtor has never said he wants this. He is just behind with payments.

Failure to pay may not necessarily mean repudiation; it may just mean the poor sod has lost his job or his wife's died. I would think that debtor repudiation is probably the last thing to occur to someone who has defaulted on a loan.

I think you confuse a refusal to honour agreed obligations with an inability to honour agreed obligations; two very different concepts. The former is repudiation and the latter is not.

[Lord_Alcohol]

Re: Contracts, Termination, Repudiation and Rescission

Withdrawing credit facility is not an enforcement step, s87 clearly says this

I have never thought otherwise PT and am not sure why you have said this in reply to my post.

[Lord_Alcohol]

Re: Contracts, Termination, Repudiation and Rescission

The other thing that came up was about actually the termination of the agreement/contract occurs. I know this is going to cause a bit of contention, but termination in the best defined sense may have occurred long before a DN has been issued.

I think that this is the true heart of the matter.

I have a view that it is too expensive for a creditor to fully comply with Part VII of the Act. Allowing the debtor the benefits of S88/S89 requires staff and internal procedures that may not be "cost effective". It may be more beneficial for the creditor to simply sidestep the intention of Part VII and consider the contract already terminated; in that case, he merely needs to sell the debt or proceed directly to court. The last thing he probably wants is to follow the process set out in the Act.

The proof of this is everywhere;

• DNs that cannot be complied with (and which also demand that credit cards are destroyed or returned)
• Creditors that refuse to revise their DN even when shown their mistake by the debtor
• Default markers applied to credit files before the expiry of the notice
• The difficulty of getting the OC to agree to a temporary payment plan

None of the above would happen if the creditor hadn't already made his mind up.

Further "proof" materialises in the unassailable fact that the default notice itself (the precursor to termination) is one of the simplest notices imagineable; all that is required is;

• A description of the breach
• A date by which the breach must be remedied
• The actions that will be taken if it isn't

But why is it that banks fail to get this technically trivial document wrong? Is it perhaps because they are simply looking for a court order to get their money, having already written the debtor off as a risk?

Perhaps cynical, but look at the recent behaviour of the banks in general. Even Mervyn King might agree;

http://news.bbc.co.uk/today/hi/today...00/9415586.stm

All this guff about termination from PB and others - the simple fact remains that the creditor terminated (in his TN and various subsequent activities) following a defective DN, an action he had no entitlement to, and the legal arguments that the contract endures is, to my mind, just smoke and mirrors and has nothing to do with reality.

The puzzle, of course, is that these contracts were regulated, yet the creditor seems exempt from their provisions, with courts (and some posters) finding increasingly bizarre and tortuous ways of skipping over the regs.

I therefore agree with Garlok; even with PT's help, the bigger questions remain and this will certainly rumble on...

[Shepherdess]

Re: Contracts, Termination, Repudiation and Rescission

Just to confuse matters more, the judge in PH's case OTR did NOT consider that repudiation wasn't possible. In fact he indicated that sueing the creditor for damages would be possible.
Interestingly enough, although there has been virulent critiscism aimed by certain parties on the advice given in this case, PH has actually come off better than if she hadn't accepted the termination.
Her choices were limited. She was cynically painted into a corner by the creditor in that they asked her to confirm if she considered the account at an end, or if it endured, in which case they stated they would issue a new DN.
By sticking to her principles at least PH now only has to pay Statutory Interest rather than the (higher) contractual. Plus has the judges nod that she could claim damages for breach. Small victory I know, and not the outcome hoped for, but a better result than NOT accepting the TN and allowing them to reissue a DN would have obtained with this particular judge.
I believe if this case had been put before 4 different judges she would have had 4 different outcomes :sad:

[pt2537]

Re: Contracts, Termination, Repudiation and Rescission

Just to confuse matters more, the judge in PH's case OTR did NOT consider that repudiation wasn't possible. In fact he indicated that sueing the creditor for damages would be possible.
Interestingly enough, although there has been virulent critiscism aimed by certain parties on the advice given in this case, PH has actually come off better than if she hadn't accepted the termination.
Her choices were limited. She was cynically painted into a corner by the creditor in that they asked her to confirm if she considered the account at an end, or if it endured, in which case they stated they would issue a new DN.
By sticking to her principles at least PH now only has to pay Statutory Interest rather than the (higher) contractual. Plus has the judges nod that she could claim damages for breach. Small victory I know, and not the outcome hoped for, but a better result than NOT accepting the TN and allowing them to reissue a DN would have obtained with this particular judge.
I believe if this case had been put before 4 different judges she would have had 4 different outcomes :sad:

probably right, but if the legal arguments had been honed further, she may have achieved a better result overall no matter what judge it was before

Harrison has successfully been used to defeat claims in their entirety on the back of bad default notices

[Shepherdess]

Re: Contracts, Termination, Repudiation and Rescission

I'm sure you're right on that too Pt. :tinysmile_grin_t:
The fat lady hasn't sung yet though and now that the case has achieved such a high profile the hope is that further ideas for damage limitation and the best way forward for PH will be forthcoming.

[New_Age_Biker]

Re: Contracts, Termination, Repudiation and Rescission

Maybe when the N1 arrives, if the debtor has accepted, it would be wise to file whatever defence is appropriate and a counterclaim for the same sum as the claim.
By filing a defence it helps preclude further action if the creditor discontinues and the appearance of such a counterclaim would indicate the debtors willingness to argure their position

[dad]

Re: Contracts, Termination, Repudiation and Rescission

Quote:
Originally Posted by pt2537
Withdrawing credit facility is not an enforcement step, s87 clearly says this


PT,

I just want to tease this out a bit more because it came up for me and I had a discussion with Professor Goode about this point. It is the difference between s87(1)(d) and s87(2):

Service of a notice on the debtor or hirer in accordance with section 88 (a “default notice ”) is necessary before the creditor or owner can become entitled, by reason of any breach by the debtor or hirer of a regulated agreement,—
...
(d) to treat any right conferred on the debtor or hirer by the agreement as terminated, restricted or deferred

and s 87(2)

Subsection (1) does not prevent the creditor from treating the right to draw upon any credit as restricted or deferred, and taking such steps as may be necessary to make the restriction or deferment effective.

In the scenario where you have a £100 overdraft limit and the balance is minus £75.
Then without a default notice, on a breach, the bank can reduce the overdraft from £100 to £75 as that is restriction or deferrment of a right to draw credit. But if they want to reduce the overdraft limit below the drawn £75 then that is termination of an existing right and is not permitted under s87(2). To do so requires compliance with s87(1)(d).

HTH

Dad

[diddydicky]

Re: Contracts, Termination, Repudiation and Rescission

Withdrawing credit facility is not an enforcement step, s87 clearly says this

I cannot see how the creditor can be the person who repudiates, i dont follow that argument when it is the debtor who fails to pay the contractual instalments.

you will find (as i have) that when the creditor terminates and you attempt to continue to send him monthly payments (as you don't believe his termination is lawful) that he will neither bank, nor acknowledge receipt of the payments

if the creditor refusing to accept monthly payments from the consumer is not a repudiation- then what is!

The problem is that there is often a LONg time between the original defective DN and the matter coming to court-

after discontinuing/being struck out/having his case dismissed- the creditor then agrees that in fact the agreement was not terminated

trouble is- he has been acting as if it is for a long time- the idea that the debtor has not been prejudiced would therefore be very far fetched- not least being his credit reputation having been impugned by the creditor in the meantime

[volvodriver]

Re: Contracts, Termination, Repudiation and Rescission

PH thread OTR closed at the request of the OP.

That's a win for someone then

[diddydicky]

Re: Contracts, Termination, Repudiation and Rescission

Suposedly the judge throws the case out, allows my costs (because the case should not have been brought) and the creditor is allowed to reissue his Dn.
He will follow this with a contracted termination or a Tn (if I still fail to perform).


Read more at: Contracts, Termination, Repudiation and Rescission - Page 26 - Legal Beagles Consumer Forum


i doubt he will- if you submitted a defence to the first abortive claim- the creditor would be using the SAME facts for the second case and the court would not allow this

the creditor may argue that as the DN in the first case was missing/invalid- that the new case is therefore brought on different facts since he is now submitting a valid DN ....it is not

the creditor in any event in the first trial, claimed that his first DN was valid ( he can hardly admit that he brought an action on an invalid DN)

therefore the idea that the production of a valid DN alters the basis/facts upon which the second case is brought would be rather fanciful

secondly a VALID DN was evidence that the creditor was obliged to submit to support the first trial and the court (IMO) would not give leave to commence a second claim on the basis that what should have been part of the original claim is now being produced The second claim would be based on same facts

namely:-

debtor defaults. DN served, debtor fails to remedy, TN served, proceedings served.

[diddydicky]

Re: Contracts, Termination, Repudiation and Rescission

Hi pt,

I think the problem for me and many others is that despite your very laudable wins (and those of our own solicitors and others) based on the tried and tested arguments is that many of these tried and tested arguments have been dissected to death on forums such as these and LIPs have gone to court and lost on these arguments (not a criticism-- an observation). Much IMHO due to the "armchair lawyer" approach of some users of these sites. Hence we see a seeking of other methods in isolation with which to combat these perceived losses.

A classic example of this was of course the Carey collection of cases. I have even seen it stated that Waksman has actually changed the Statute Law, which of course he cannot do. I do note that Harrison has not seen the same attention by these users.

Since day one of our battles I have always assumed that a fairly comprehensive defence would have to be put together which had several strong points in it including as you know in "Harrison" the issue of a defective DN etc. I don't see it at all as magic solution in isolation. But I can understand perhaps the level of interest in it as more and more seek the golden bullet as it is perceived s78 et al has gone away for the LIP.

best regards
Garlok.

failure to comply with s77/9 is still very much alive IMO
------------------------------- merged -------------------------------

Just read you guys last posts, Yep I am another refugee who was banned for standing my ground against a troublemaker and then the site team when they backed him and not the good guys.

We are all here (or there) to learn and share, a lot of us under real stress and one bad apple soon ruins the barrel.


Garlok

there HAS to be "hold" or other influence in respect of the one troublemaker you refer to- otherwise they are insisting that the whole regiment is out of step except the sergeant major!


personally i hold the theory that the other site "has it in" for PT and that the "other guy" is their main weapon of choice against him

[StoneLaughter]

Re: Contracts, Termination, Repudiation and Rescission

Where did the assertion come from, that a defective DN "...can be remedied"? It seems to me that all the procedural and legal pointers we're getting lead us to the conclusion that while one statute may allow the DN to be remedied, so many other things stand in the way of doing so that it is effectively impossible?

The debtor is hardly going to write to the creditor (prior to litigation) and say "I say, old chap, that's not a valid DN, would you please correct it" now is he?! So the DN is assumed by the creditor to be valid - the creditor litigates when no mitigating/rectifying action is taken by the debtor - and suddenly "remedying" the DN is downright bloody difficult if not impossible due to the other protection the debtor has re: enforcement and so on.

Seems to me, that once there's a defective DN, if the debtor plays his cards right then the most likely outcome is a writing off of the entire matter...?