Thread: S.15 of the sale of goods act

In the briefing notes there is a statement that says "S.15 says that where no price is agreed at the time the contract is made, that a reasonable price will be implied."

My question is does thgis really apply as when you join the bank you are directed to their current charges and as such you are agreeing to those charges by taking on the contract.....arn't you ?

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Yes, but.........by the bank sending you details of revised charges by post as and when they change them and by the fact you continue to use your account you are accepting these charges and as such the variation to your contract terms and conditions. I'm happy to gop into court (soon) and argue the unfair contract terms angle but this one is a no-win as far as I can see.

Andy, the charges the banks impose for unauthorised overdrafts etc are because
you have breached your contract with them. And it is the laws of breach of cotract
that apply, not the sale of goods act, or any other act.

The salient point in breaches of contract is that the person who has suffered the breach [in our case the banks] cannot at Law, make a profit from the breach. The
Courts will only allow them to reclaim their losses because of the breach.
The OFT think that the maximum loss they suffer is no more than £12 and so
charging us £25 or more is unlawful.

Do you really think that the banks would pay out all the people in this forum who have been paid out if they felt that their charges would stand up to scrutiny in Court?

Just going on what bankfodder put in the guidance notes, he said...quote..
On the issue of that the charges are merely a profitable service:-

* You are arguing that under s.15 Supply of Goods Act the cost of the service is required to be reasonable. S.15 says that where no price is agreed at the time the contract is made, that a reasonable price will be implied.
The cost of blocking a DD and sending letter is most probably less than 50p (or whatever you think that you can argue). The bank is a High Street business. Normal mark-ups on the High Street are 100%. It would not be reasonable for the bank to mark up significantly higher than this without a full and detailed explanation.
The actual cost cannot be very high because the service is highly automated and operates millions of times per year so that the cost is spread and shared widely.
The bank has been invited to provide a detailed Breakdown of it costs and it will not do so.
You can bring in useful documents as well where for example the bank has argued that the charges do only allow then to recover their losses. If the bank argues this then it effectively destroys their case that the charges are he reasonable price of a service.

That's where my point comes in. Are you saying I shouldn't put this is my moneyclaim notes ?

In my opinion the argument set out in the guidance notes to counter the banks' potential argument that their charges are for a service and not penalty charges

i.e. "that under s.15 Supply of Goods Act the cost of the service is required to be reasonable" - and that it would not be reasonable for the bank to charge an excessive amount for a service which is highly automated

is weak and dangerous.

Weak because the banks publish their charges; they provide you with details of their charges for services when you open an account and notify you when they change, giving you the option to discontinue your contract if you don't like them. By continuing to hold an account you implicitly agree to any new charges notified to you for a service offered, however high.

Dangerous because you are agreeing that the charge is for a service. Do not do it, if a bank were to win on that point it would set a dangerous precedent.

The whole basis on which people win these cases is that these charges are not for a service (which would be legal, however high, if you have agreed to them) but are penalty charges.

You have to argue that they are penalty charges, which are illegal under common law and the UTCCR, and not that they are excessive charges for a service, not agreed in advance.

The argument is that by providing an overdraft of £101 when you have an agreed limit of £100, the bank is not providing you with any additional service. but penalising you for going over the limit, and their charge for the overdraft service is the interest you pay.

You can also argue that clauses which allow for the bank to decide unilaterally to allow some items to be paid, (incurring for you unauthorised overdraft fees), while declining others (incurring penalty charges for returned items) is unfair under the UTCCR, as it is unbalanced to the detriment of the consumer.

Given the choice you would probably opt for any item which would take you over your overdaft limit to be declined. Any charge for doing this is clearly a penalty charge, as no service is provided to you, and is therefore unenforecable.

In what sense - all you have stated is that you can void a contract if the banks alter it to your detriment by increasing their charges. I do not see that this is any help here.

Unless they change their charges after you open the account, the banks haven't altered any contract to your detriment - and even if they do change their charges, and they notify you of that change before they apply them, (which will also be one of the terms, that they can do that) you have the option to close your account and go elsewhere if you don't agree to the new charges, so you do not have to pay them. By not doing so you accept the new charges as part of your contract, and they have not been uinilaterally applied.

I do not see what you are arguing is relevant.

My point is that what is unfair is that the banks can unilaterally choose which way they are going to charge you, by paying an item and charging you for this alleged service, which you may not have wanted, or by declining it and charging you a penalty for doing so, which is illegal under common law. But this is a secondary arguement to use anyway. The primary arguement is that the payments are always penalty charges, and never charges for a service.

I’ve been losing sleep over the Sale of Goods and Services Act too! I’ve been struggling to see how it can be useful - the charges have been agreed in advance, and therefore don’t need to be "reasonable".

Bankfodder said in another thread that we could use it if the account has been open for some time, so that the current charges are more than what was originally agreed. But surely you could only argue, at most, that they should restrict the charges to what was agreed - not that the reasonableness test must now apply? But if the account is a recent one, the charges might be what was agreed in the contract anyway.

However, banks are now saying in their defences that charges were for services, so we do need to face up to it. If the case goes to court I guess we’d have to go on the offensive and argue, as Bankfodder says, that the "services" argument is merely a cloak. Perhaps we could then ask the bank exactly what service they provided for each charge. And ask them how it can be a "service" to provide you with something you didn’t ask for and didn’t want - such as bouncing a direct debit.

In the meantime I’m still not 100% sure we should include the Sale of Goods and Services Act point in the claim, but if it's clear that it’s just a fallback argument then I can’t see any harm.

I’m working on my claim now and was thinking of including the following:

If the Defendant establishes that the charges were not penalties, and/or that there were no breaches of contract, and/or that that the charges were for the provision of services, the Claimant will contend that the charges were unreasonable, and unenforceable by virtue of Section 15 of the Sale of Goods and Services Act 1982.

Anyone see anything wrong with that?

(…apart from the fact that all these extras make it impossible to keep it down to 1080 characters for Moneyclaim - so I’m using a form N1)