Common Law - overidden by non statutory terms and conditions

[Amethyst]

Common law can not be overidden by non statutory terms and conditions.

Is that statement correct ?

Why is it correct ?

Are banks terms and conditions, in the most part, non statutory ?

Can banks terms and conditions override common law ?

If they can't but attempt to, does that make the term unfair under UTCCR ?


Here is a quote from Nationwide which I am trying to work out the fairness of.

Whilst it is true that the common law sets out a general framework under which people can enter contracts, that framework is always open to be customised by the express agreement of the people concerned. In the case of our current accounts, the terms and conditions of that account are a good example of this agreement to vary the common law position. .....More specifically, the terms and conditions of our current account incorporate Nationwide’s Rules (one of our constitutional documents, which govern the relationship between Nationwide and its members). In particular Rule 5(b)(iii) states that: “The Society may withhold all or part of any … [current account] … and use it to pay or reduce any debt owed to the Society which is due or overdue for payment.” This means that Nationwide can use any money deposited in an account to set off any debt owed by the account holder to the Society.

Help very much appreciated.

[StoneLaughter]

Re: Common Law - overidden by non statutory terms and conditions

IMO this question would hinge on whether both parties to the contract were in a position to vary the terms before "agreement".

As consumers are presented with a "fait accompli" contract with no opportunity to negotiate (can you imagine the Bank Manager's face if you took them back with amendments and said "I would like to talk about these changes to your terms!"?) that the Common Law position would be the one which took precedence.

However - if both parties contributed to the essence of the contract, I believe that the Common Law position could be rendered obsolete for that contract - as both parties have actually considered the whole contract and agreed to each term individually.

The choice before the consumer (as constantly reminded to us by the OFT in the current case) is either take the account along with the standard terms or go elsewhere - and for the large part the terms are very similar across the industry.

We also have to remember that a person cannot sign away their rights under statute by agreeing to ANY contract; such terms are rendered unenforceable by the Statute in question. However one has to look at Case Law (Common Law) for appropriate interpretations of that Statute to support one's case. In the absence of a suitable piece of legislation, or in the absence of supporting Case Law, (or even, God forbid, in the absence of both) then a Test Case would become necessary to have the Claimant's point argued in Law and set a relevant Precedent - or new legislation would be needed to fill the gap.

[EXC]

Re: Common Law - overidden by non statutory terms and conditions

I would have thought that in the main common law applies to non-negotiated contracts (ie bank accounts) and doesn't apply to negotiated contracts.

Also Justice Smith considered the matter of penalties under common law which regardless of the outcome would suggest that the contracts were subject to common law.

Having said that I'm just a country boy so by all means ignore me and I'll happily go back to chewing lengths of straw.

[Amethyst]

Re: Common Law - overidden by non statutory terms and conditions

In the judgment didnt the judges state that the contract were non negotiable.

therefore common law presides over terms in bank contracts (unless laid out by statute)

yes?

So common law right of appropration overrides the banks right of offset which is simply laid out in the T&Cs because they are not individually negotiated ?

So is an non individually negotiated term that overrides common law unfair ?

The judge noted at [11] that it was agreed that he was to proceed on the assumed basis that none of the terms with which he was concerned had been “individually negotiated”. He added that that was no doubt generally the case, notwithstanding that customers sign individual mandates. Nobody suggested that we should not proceed on the same basis.

I think legally the contracts are deemed as individually negoitated ????????

who was it said about ''take it or leave it'' contracts ? rab? ahh no was in judgment

Quote:
Originally Posted by judgment
36.
In our judgment, the judge correctly identified the purposes of the Directive. He did so by reference to this statement of Lord Steyn in the First National Bank case at [31]:
“The purpose of the Directive is twofold, viz the promotion of fair standard contract forms to improve the functioning of the European market place and protection of consumers throughout the European Community. The Directive is aimed at contracts of adhesion, viz “take it or leave it” contracts. It treats consumers as presumptively weaker parties and therefore fit for protection from abuses by the stronger contracting parties. This is an objective which must guide the interpretation of the Directive as well as the implementing Regulations.”

and......

Quote:
Originally Posted by judgment
61.
There was some debate in the course of the argument as to when and how the nineteenth recital and article 4(2) found their way into the Directive. The reference to main subject matter (“specification”) and “price” of the contract first appeared in the initial Commission Proposal of July 1990 which stated that:
“The use of standard term contracts effectively excludes the possibility of real negotiation between the parties on the terms governing the subject-matter of the contract (although there may be negotiation on such matters as the price and the specifications of the goods). These are, in reality ‘take it or leave it’ contracts …”

Also as the term is NOT a core term it can be assessed for unfairness.

[EXC]

Re: Common Law - overidden by non statutory terms and conditions

Yes during the appeal there was a debate about the non-negotiable nature of the contracts and how that element of them made them subject to UTCCR. I think the term used was ''standard consumer contracts''.

Is set off actually in T&Cs or is it seen as a general right of a lender?

[natweststaffmember]

Re: Common Law - overidden by non statutory terms and conditions

Businesses must get set off clauses right or pay out on contracts

In a decision that could affect your cashflow, the Court of Appeal has ruled a contract clause that allowed company A to set off an amount it was claiming against company B for breach of the contract against its own payments due under the contract.
Dissatisfaction with services being provided to it under a contract resulted in one of the parties withholding payment. The contract required it to pay a monthly sum 'without any claim, deduction, counterclaim or set-off', unless there was a genuine and bona fide dispute over the services being provided.
The other party claimed there was no genuine dispute, so payment could not be withheld. The Court of Appeal agreed. Clear, unambiguous wording is needed in order to exclude rights of set-off, but the contract contained such clear wording. The monthly sum therefore had to be paid, and the dissatisfaction dealt with separately. The case highlights the importance of clear contractual wording.

Source: Businesses must get set off clauses right or pay out on contracts - Andrew Jackson Law Firm

[Amethyst]

Re: Common Law - overidden by non statutory terms and conditions

If a non negotiable, non core term in a contract is imposed on you forcing you to waive your rights under common law, could it be considered an unfair term ?

Offset is part of the terms and conditions will find some examples.

Nationwide - Rule 5(b)(iii) states that: “The Society may withhold all or part of any … [current account] … and use it to pay or reduce any debt owed to the Society which is due or overdue for payment.”

Flexaccount - 54. At any time we may, without notice, combine two or more accounts
or set off any debit balance on one account against a credit balance
on another account.

Okay am I confusing myself?

[natweststaffmember]

Re: Common Law - overidden by non statutory terms and conditions

Bit of an old article but......
http://www.independent.co.uk/news/uk...3-1453623.html
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http://www.bailii.org/cgi-bin/markup...method=boolean

[Amethyst]

Re: Common Law - overidden by non statutory terms and conditions

I'm not disputing the right of set off - simply that the FROA common law overrides it.

[natweststaffmember]

Re: Common Law - overidden by non statutory terms and conditions

Banker’s Right Of Set-Off: A High Hurdle - Banking and Finance - Updates and Publications - Updates - Middleton Potts

Try this one from a banking perspective.

[EXC]

Re: Common Law - overidden by non statutory terms and conditions

I'm not disputing the right of set off - simply that the FROA common law overrides it.

Are you sure that FROA is part of common law?

If you think this issue is important lets ask someone at FSI to look into it.

[Amethyst]

Re: Common Law - overidden by non statutory terms and conditions

The issue is quite small however i think it is important.

The bank is overriding an individuals rights under common law. (I'll grab the case law)

The term isnt wholly unfair, only in certain circumstances, where first right of appropriation is instigated by the individual, to be told by the bank that in essence they hold first right of appropriation because of their terms/right of offset.

[natweststaffmember]

Re: Common Law - overidden by non statutory terms and conditions

would that not be a variation in the contract by the customer? If that is the case then the bank can either agree with it or decline it.

[Amethyst]

Re: Common Law - overidden by non statutory terms and conditions

In essence yes I suppose it is, however the bank 'looks after' an individuals money and under common law the individual has the first right of appropriation over that money. The banks are using their offset terms to decline an individuals common law rights - being first right of appropriation - which I think could be deemed as unfair.


I think stoney is correct with the non negiotable term issue.

case law and letters etc discussed Legal Beagles

[natweststaffmember]

Re: Common Law - overidden by non statutory terms and conditions

They are doing that in relation to a debt, the argument has to be that maybe the first right of apropriation could include a broader instruction, ie pay x y and z and/or if not enough money cancel payment to y or z, something like that?