Order of prescribed terms

[emboli]

Hi

 

I have a CCA back from MBNA, and on the first page where i've signed there are no prescribed terms, on the reverse there are some of the terms. The CCA is from april 05.

 

I recall reading somewhere that the terms have to be before the signature, but may have recently changed for new agreements. Am i right?

[tifo]

A valid credit agreement must contain certain terms within the signature document (s.60(1)(2) CCA 1974). These core terms are the credit limit, repayment terms and the rate of interest (SI 1983/1553 (6 Signing of agreement) which states that the prescribed terms must be within the signature document. (Column 2 schedule 6). s.61(1)(a) states the agreement must contain all the prescribed terms and be signed by both the debtor and on behalf of the creditor.

Further, s.127(3) CCA 1974 makes the account unenforceable if it is not in the proper form and content or improperly executed.

In Wilson and another v Hurstanger Ltd (2007) it was stated “In my judgment the objective of Schedule 6 is to ensure that, as an inflexible condition of enforceability, certain basic minimum terms are included which the parties … and/or the court can identify within the four corners of the agreement. Those minimum provisions combined with the requirement under s.61 that all the terms should be in a single document, and backed up by the provisions of section 127(3), ensure that these core terms are expressly set out in the agreement itself: they cannot be orally agreed; they cannot be found in another document; they cannot be implied; and above all they cannot be in the slightest mis-stated. As a matter of policy, the lender is denied any room for manoeuvre in respect of them. On the other hand, they are basic provisions, and the only question for the court is whether they are, on a true construction, included in the agreement”.

[emboli]

Thanks for the reply tifo

 

Would the four corners of the agreement be the document text before the signature? As I assume that an agreement can be longer that one page. So anything after the signature, on a subsequent side or page wouldn't be in the four corners?

[tifo]

that's the assumption, i.e. the four corners of the signature page. This is so that it is clear to you before you sign. The agreement itself can be many pages as part of the document.

[diddydicky]

that's the assumption, i.e. the four corners of the signature page. This is so that it is clear to you before you sign. The agreement itself can be many pages as part of the document.

 

is there any authority or case stated which i can refer to where

 

Within the 4 corners of the agreement/Document

 

has been revised to mean

 

with the 4 corners of the signature page?

 

thanks dick

[MBNASlayer(1)]

Subbing. I have the same issue. My signature is on page 1 and the prescribed terms on the reverse. There is no reference to the T&C's on the reverse

[diddydicky]

yes, i think 4 corners of the signature document means just that- that is to say they do not have to be on the same page but clearly within the same document

 

however one would expect that the signature would come on the second page after the pt's and not on the page before and that the signature box would refer to have read the terms "overleaf"

 

i am pretty certain that what is sent and shown on the reverse of the signed side was NOT on the original document

 

ie it has been copied onto the back from another document

[out of cash]

hi all,

 

i went to court 3 times with a high st bank and it took hrs to get it through the judges head that professor goode who designed the cca 1974 when he said 4 corners he meant 4 and not 16 as the judge refered to me saying that the sig was in the 4 corners but on page 4 and it went on and on and on its just that the prescribed terms were on a different page they get nit picky with the definition of the word document. i argued that the prescibed terms needed to be on the sig page as this left unscruplious lenders to later just slip in a page of prescribed terms one bank done something far worse than this with me.

 

regards

 

ooc

[out of cash]

every credit card agreement i ever signed had the prescribed terms on signiture page, as did personal loan agreements the funny thing is hardly any bank turns up in court with one of these:D i wonder why?

[krikkie]

Take a look at the 1983 Regs (SI 1553 / 1983). Section 2 (4) states quite clearly that the prescribed terms need to be in a certain order, and last of these is the signature. I am no trained lawyer but in my eyes that means that T&Cs on the reverse of a document is not sufficient for a properly executed agreement.

 

(4) Subject to paragraphs (5) and (9) below, the information, statements of the protection and

remedies, signature and separate boxes which this regulation requires documents embodying

regulated consumer credit agreements to contain, shall be set out in the order given by paragraphs

(a) to (f) below under, where applicable, the headings specified below–

(a) the nature of the agreement as set out in paragraph 1 of Schedule 1 to these Regulations;

(b) the parties to the agreement as set out in paragraph 2 of Schedule 1 to these Regulations;

[ © under the heading “Key Financial Information”, the financial and related particulars

set out in paragraphs 6 to 8B, 11 to 14 and 15 to 17 of Schedule 1 to these Regulations; ]6

(d) under the heading “Other Financial Information”, the financial and related particulars

set out in paragraphs 3 to 5, 9, 10, 14A and 18 to 19A of Schedule 1 to these regulations;

(e) under the heading “Key Information”–

(i) the information set out in paragraphs 20 to 24 of Schedule 1 to these Regulations;

and

(ii) the statements of protection and remedies set out in Schedule 2 to these

Regulations; and

(f) the signature box and, where applicable, the separate box required by paragraph (7)(b)

below;

 

[tynebridge]

Also I'm wondering if I'm reading this correctly but my document which came back from HFC has the APR's on the reverse of the agreement-would this really mean the whole agreement is unenforceable-do they all really need to be on the same side of the paper as the signature?

[lilly white]

THE STATUTORY PROVISIONS The nature of the agreements

 

1. It is common ground that the (typical) credit card agreements which are the subject of the preliminary issues constitute "regulated agreements" for "running account credit" falling within ss8 and 10 (1) (a) of the Act. They also constitute "credit token agreements" under sl4 by reason of the provision of the credit cards themselves.
   

Executed and unexecuted agreements

 

1. "Executed agreement" is defined under si 89 (1) as being "a document, signed by or on behalf of the parties, embodying the terms of a regulated agreement, or such of them as have been reduced to writing." An "unexecuted agreement" is defined as "a document embodying the terms of a prospective regulated agreement, or such of them as it is intended to reduce to writing." By si 89(4) "A document embodies a provision if the provision is set out either in the document itself or in another document referred to in it."
   

Part V of the Act

 

1. This Part is entitled "Entry into Credit or Hire Agreements" and then a section within that, immediately before s60, is entitled "Making the agreement". This is concerned, among other things, with the duties of the creditor when the agreement is first made.
   

Proper execution of the agreement

 

1. In particular while the parties may succeed in making an executed agreement (see above), if it fails to conform to requirements made by regulations as to form and content it will be an improperly executed agreement ("IEA").
   

 

1. Specifically, s61 (1) provides as follows:
   

s61 (1) "A regulated agreement is not properly executed unless:

(a) a document in the prescribed form itself containing all the prescribed terms and conforming to regulations under section 60(1) is signed in the prescribed manner both by the debtor or hirer and by or on behalf of the creditor or owner, and

(b) the document embodies all the terms of the agreement, other than implied terms, and

© the document is, when presented or sent to the debtor or hirer for signature, in such a state that all its terms are readily legible."

 

1. Section 189 (1) defines "prescribed" as "prescribed by regulations made by the Secretary of State". The relevant power here is contained in s60:
   

s60 (1) "The Secretary of State shall make regulations as to the form and content of documents embodying regulated agreements, and the regulations shall contain such provisions as appear to him appropriate with a view to ensuring that the debtor or hirer is made aware of -

(a) the rights and duties conferred or imposed on him by the agreement,

(b) the amount and rate of the total charge for credit (in the case of a consumer credit agreement),

© the protection and remedies available to him under this Act, and

(d) any other matters which, in the opinion of the Secretary of State, it is desirable for him to know about in connection with the agreement.

(2) Regulations under subsection (1) may in particular -

(a) require specified information to be included in the prescribed manner in documents, and other specified material to be excluded;

(b) contain requirements to ensure that specified information is clearly brought to the attention of the debtor or hirer, and that one part of a document is not given insufficient or excessive prominence compared with another...."

The Consumer Credit (Agreements) Regulations 1983 ("the Agreements Regulations")

 

1. These were made by the Secretary of State pursuant to s60.
   

 

1. By Regulation 2 (1) and Schedule 1, the credit card agreements with which I am concerned had to contain certain information. This included the following:
   

(1) By paragraph 2 of Schedule 1, "The name, postal address and, where appropriate, any other address of the debtor". Prior to 31 December 2004 Schedule 1 paragraph 2 of the Agreements Regulations required that 'All Types' of regulated agreement provide "The name and a postal address of the debtor". The present reference to "other address" is intended to cover electronic addresses such as e-mail addresses;

(2) By paragraph 8 of Schedule 1, the credit limit which could be expressed in different ways, including "a statement indicating the manner in which the credit limit will be determined by the creditor and that notice of it will be given by the creditor to the debtor..";

(3) By paragraph 10 of Schedule 1, the rate of interest and the total amount of other charges included in the total charge for credit;

(4) By paragraph 15 of Schedule 1, the APR.

 

1. By Regulation 2 (3) and Schedule 2, a description of the protection and remedies available to the debtor. By paragraph 3, where the agreement was cancellable, this would include the following: "Your right to cancel. Once you have signed this agreement, you will for a short time have a right to cancel it."
   

 

1. Then, by Regulation 6 and Schedule 6 the following terms had to be contained in a regulated agreement for running account credit if it was not to be an IEA, and were prescribed for the purposes of s61 (1) (a):
   

"A term stating the credit limit or the manner in which it will be determined or that there is no credit limit" (paragraph 3 of Schedule 6);

"A term stating the rate of any interest on the credit to be provided under the agreement" (paragraph 4 of Schedule 6);

"A term stating how the debtor is to discharge his obligations under the agreement to make the repayments, which may be expressed by reference to a combination of any of

the following:

number of repayments;

amount of repayments;

frequency and timing of repayments;

dates of repayments;

the manner in which any of the above may be determined;

or in any other way, and any power of the creditor to vary what is payable." (paragraph 5 of Schedule 6).

I shall refer to these as "the Prescribed Terms".

 

1. Accordingly, the document which is signed by the parties (and which forms all or part of the executed agreement) must itself contain the Prescribed Terms and the name and address of the debtor. Other terms may be incorporated by reference but not the Prescribed Terms.
   

Copies of the agreement at the time when it is made

 

1. The initial duty is to provide a copy of the unexecuted agreement, as set out in s62 as follows:
   

"s62 (1) If the unexecuted agreement is presented personally to the debtor or hirer for his signature, but on the occasion when he signs it the document does not become an executed agreement, a copy of it, and of any other document referred to in it, must be there and then delivered to him.

(2) If the unexecuted agreement is sent to the debtor or hirer for his signature, a copy of it, and of any other document referred to in it, must be sent to him at the same time.

(3) A regulated agreement is not properly executed if the requirements of this section are not observed."

 

1. A further duty imposed upon the creditor by s63 is to supply copies of the executed agreement as follows:
   

"s63 (1) If the unexecuted agreement is presented personally to the debtor or hirer for his signature, and on the occasion when he signs it the document becomes an executed agreement, a copy of the executed agreement, and of any other document referred to in it, must be there and then delivered to him.

(2) A copy of the executed agreement, and of any other document referred to in it, must be given to the debtor or hirer within the seven days following the making of the agreement unless -

(a) subsection (1) applies, or

(b) the unexecuted agreement was sent to the debtor or hirer for his signature and, on the occasion of his signing it, the document became an executed agreement.

(3) In the case of a cancellable agreement, a copy under subsection (2) must be sent by an appropriate method.

(4) In the case of a credit-token agreement, a copy under subsection (2) need not be given within the seven days following the making of the agreement if it is given before or at the time when the credit-token is given to the debtor.

(5) A regulated agreement is not properly executed if the requirements of this section are not observed."

Enforcement of IEAs

 

1. The basic rule is stated by s65:
   

"s65 (1) An improperly-executed regulated agreement is enforceable against the debtor or hirer on an order of the court only.

(2) A retaking of goods or land to which a regulated agreement relates is an enforcement of the agreement."

 

1. Then sl27(l) provides as follows where an application to enforce is made by the creditor:
   

"..the court shall dismiss the application if, but only if, it considers it just to do so having regard to:

(i) prejudice caused to any person by the contravention in question, and the degree of culpability for it; and

(ii) the powers conferred upon it by sub-section 2 and sections 135 and 136 [power to reduce or discharge the sums owed to compensate for prejudice caused, to suspend or place conditions on enforcement or amend an agreement or security].."

 

1. Then, sl27(3) provides, in relation to agreements made before 6 April 2007, as follows:
   

"The Court shall not make an enforcement order under s 65(1) if section 61(1) (a) (signing of agreements) was not complied with unless a document (whether or not in the prescribed form and complying with regulations under s60(l)) itself containing all the prescribed terms of the agreement was signed by the debtor ..(whether or not in the prescribed manner)."

 

1. Accordingly, non-compliance with the relevant regulations is capable of being cured upon application by the court unless the document signed by the debtor did not contain the Prescribed Terms. In such a case the non-compliance cannot be cured and, in the words of Lord Hoffman in Dimond v Lovell [2002] 1 AC 384 at p397F, the agreement is "irredeemably unenforceable".
   

[diddydicky]

The "four corners" of a document refer neither to the four corners of the first page or topcopy, nor to the number of documents

 

an agreement can be 100 pages in length and if sequentially numbered and obvious to a reasonble minded person that they are part of the same "document" then anything within the 100 pages would be deemed to be contained within the four corners of the document

 

if this document also contained a "signature page" then you would have a document of which the signature document comprised 100 pages.

 

it is not even necessary that the pages be bound together.

 

therefore if as you say the PT's were on the reverse and also there is reference to them being on the reverse in all likelyhood the agreement will be valid,

 

however, common sense dictates that the signature page would be the last page of any document and that one normally signs at the end of the terms and conditions of an agreement or document therefore you should be suspicious of any document where your signature appears in the middle of or interspersed within the terms and conditions of the alleged document as clearly a right thinking person would not expect to find your signature there

 

with respect to credit agreements the normal or usual concern where the signature appears on page one and the terms on the reverse or subsequent pages is that what you have been sent is in fact likely to be extracts from more than one document- which purely co incidentally appear as though they are one document (not)

Edited January 2, 2010 by diddydicky