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We have read about a certain CMC who is purchasing debts, but never revealed the legislation they use. Below is an explanation from someone who I beleive is an agent for them. He has posted on this subject arguing the toss against Curly ben. However, I am not 'wired' up right to understand this jargon, so I will post it here to see if there is anything in it.
Good luck.
Read the section within Treitel on contracts detailing the "conditional benefit principle
Assignments of Contractual Rights
The burden of a contract cannot in principle be transferred so as to discharge the original contracting party without the consent of the other party. There are two exceptions. If the contractual rights have been assigned, those rights will be subject to the original contract. An instance of this, Britain & Overseas Trading Ltd v Brooks Wharf Ltd, an exemption clause in the original contract was binding on the assignee of the contract. Such cases are examples of the "conditional benefit" principle. This principle applies where the right which has been assigned is on the condition that certain restrictions are observed. These are an intrinsic part of the right, so that the burden is annexed to the benefit of the contract. Therefore, the person with the benefit must perform the burden, or otherwise forego the benefit. Whether a conditional benefit arises is dependent upon the proper construction of the contract.
Also the following is from Jeffery Jenkins vs Young Brothers Transport ltd
Williams’ submission reflects what according to Treitel is the "general rule", namely that the assignee of a benefit of a contract makes no promise to perform the obligation’s of the assignor and in such a case, the assignee does not become liable under the contract. (See Young v Kitchin [1878] 3EX.D.127).
However, Treitel sets out exceptions to this general rule (see Treitel page 702). An example is where the obligation to perform a contract in place of the assignor is annexed to the assignment of the benefit of the contract. Where this is the case, the assignee must perform the burden of the contract or forego the benefit if he fails to do so. Treitel describes this as the "conditional benefit principle", which arises where the right assigned is conditional or qualified, the condition being that certain restrictions should be observed or certain burdens assumed (see Tito v Waddell (No.2) 290 et seq)
So the benefits of debt are intrinsically linked to the burden of the debt. Basil has bought the benefits and he can't profit from the benefits of the debt without also taking on the burden.
You can't assign the burden of a contract but Debt falls under the conditional benefit principle so the burden is part of the benefit.
Thats why banks have no liability once they sell the debt on. If banks could only sell the benefits of a contract then they would be open to court action from debtors for incorrectly drawn up agreements even after the sale of the debt.
When Debt purchasing companies/debt collectors buy debt from banks they take on the benefit of the contract and along with that the burden. If this is not the case then the question in regards to the complete and total diminished liability of a lender post sale of a debt still remains a mystery.
Good luck.
Read the section within Treitel on contracts detailing the "conditional benefit principle
Assignments of Contractual Rights
The burden of a contract cannot in principle be transferred so as to discharge the original contracting party without the consent of the other party. There are two exceptions. If the contractual rights have been assigned, those rights will be subject to the original contract. An instance of this, Britain & Overseas Trading Ltd v Brooks Wharf Ltd, an exemption clause in the original contract was binding on the assignee of the contract. Such cases are examples of the "conditional benefit" principle. This principle applies where the right which has been assigned is on the condition that certain restrictions are observed. These are an intrinsic part of the right, so that the burden is annexed to the benefit of the contract. Therefore, the person with the benefit must perform the burden, or otherwise forego the benefit. Whether a conditional benefit arises is dependent upon the proper construction of the contract.
Also the following is from Jeffery Jenkins vs Young Brothers Transport ltd
Williams’ submission reflects what according to Treitel is the "general rule", namely that the assignee of a benefit of a contract makes no promise to perform the obligation’s of the assignor and in such a case, the assignee does not become liable under the contract. (See Young v Kitchin [1878] 3EX.D.127).
However, Treitel sets out exceptions to this general rule (see Treitel page 702). An example is where the obligation to perform a contract in place of the assignor is annexed to the assignment of the benefit of the contract. Where this is the case, the assignee must perform the burden of the contract or forego the benefit if he fails to do so. Treitel describes this as the "conditional benefit principle", which arises where the right assigned is conditional or qualified, the condition being that certain restrictions should be observed or certain burdens assumed (see Tito v Waddell (No.2) 290 et seq)
So the benefits of debt are intrinsically linked to the burden of the debt. Basil has bought the benefits and he can't profit from the benefits of the debt without also taking on the burden.
You can't assign the burden of a contract but Debt falls under the conditional benefit principle so the burden is part of the benefit.
Thats why banks have no liability once they sell the debt on. If banks could only sell the benefits of a contract then they would be open to court action from debtors for incorrectly drawn up agreements even after the sale of the debt.
When Debt purchasing companies/debt collectors buy debt from banks they take on the benefit of the contract and along with that the burden. If this is not the case then the question in regards to the complete and total diminished liability of a lender post sale of a debt still remains a mystery.
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