Dissecting the Manchester Test Case....

[seriously fed up]

Definition of an executed agreement from CCA 1974

"“ executed agreement” means 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;"

From this it seems undeniable that to be an executed agreement, both parties need to sign. As has been pointed out already, if the debtor hasnt signed then its game over. But what are the consequences of the creditor not signing.

In mainstream contract law there needs to be a process of offer and acceptance. Now one might think that the provision of the application form (or agreement as they keep calling them) is the lender's offer. But its very arguable that it isnt. Take the case of Partridge v Crittenden in 1968. In this case, the accused (it was a criminal case) offered for sale via a newspaper advert bramblefinch cocks and hens. The court held that the newspaper advertisement could only be an invitation to treat, since it could not have been intended as an offer to the world, so the defendant was not guilty of "offering" them for sale. In the same way, when you to the supermarket and remove goods from the shelves, you would then take them to the checkout to pay for them. When you go the checkout, you make an offer of payment, and the shop accepts that.

Applying this to the process of taking out a credit card, when the prospective debtor puts in his/her form, he is making an offer, but there has been no formal acceptance of this by the lender.

In this respect, perhaps s59 (An agreement is void if, and to the extent that, it purports to bind a person to enter as debtor or hirer into a prospective regulated agreement), in that after acceptance by the lender, the formal agreement should be forthcoming for signature?

But, if the lender doesnt sign, then it does seem clear that there has not been an executed agreement, and to be honest I am not really clear what the consequences are/ should be. I will need to have a think about that!

[diddydicky]

it is as has been said "not properly executed and can be enforced only by order of the court

 

it is equally accepted that the court would willingly enforce it on application

 

the reasoning i suspect is simple

 

it is the creditor that is taking all the risk (giving you his money to spend) and therefore his signature usually is appended after you have signed and returned the agreement to him

 

that he forgets or omits to do it at the time is not fatal to him (and often is a corporate stamp in any event)

[freethemice]

Hi freethemice

 

Do you have your own thread on this as it will get lost on this thread. You need to be in legal issues I think. You then need to put a link on here and ask for help and I for one will keep track of your thread and offer as many suggestions as I can.

 

You did well in court, but it will be very difficult next time based on what has been said, although I do believe that you can put a strong defence together with a lot of hard work. This is the next stage in this kind of case and we need to fight fire with fire as I have pointed out earlier in the thread.

 

Pedross

yep for the full thread follow the link below. Just raised it here as it seems the creditors are shooting themselves in the foot. I can't be the only person to have receaved a one page document with no terms to which when challenged the answer has consistently been. "this is a true copy" "This is an executable copy" "All the prescribed terms are here". For the same creditor to 'at court' turn round and say "oh sorry we lost that but this nice 2 page document is what it would have looked like" to me prooves either the answer to the origianal dsar request was a lie or they are now lying to court. Surely they can't have the cake and eat it!

http://www.consumeractiongroup.co.uk/forum/legal-issues/203488-g-nationwide-credit-card.html

[diddydicky]

yep for the full thread follow the link below. Just raised it here as it seems the creditors are shooting themselves in the foot. I can't be the only person to have receaved a one page document with no terms to which when challenged the answer has consistently been. "this is a true copy" "This is an executable copy" "All the prescribed terms are here". For the same creditor to 'at court' turn round and say "oh sorry we lost that but this nice 2 page document is what it would have looked like" to me prooves either the answer to the origianal dsar request was a lie or they are now lying to court. Surely they can't have the cake and eat it!

http://www.consumeractiongroup.co.uk/forum/legal-issues/203488-g-nationwide-credit-card.html

 

they do indeed shoot themselves in the foot

 

in the back of the foot since they seem to send the sig page without the T & Cs whereas the act allows them NOT to send the sigs but insists they send the T & C's

[ceejay123]

Definition of an executed agreement from CCA 1974

"“ executed agreement” means 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;"

From this it seems undeniable that to be an executed agreement, both parties need to sign. As has been pointed out already, if the debtor hasnt signed then its game over. But what are the consequences of the creditor not signing.

In mainstream contract law there needs to be a process of offer and acceptance. Now one might think that the provision of the application form (or agreement as they keep calling them) is the lender's offer. But its very arguable that it isnt. Take the case of Partridge v Crittenden in 1968. In this case, the accused (it was a criminal case) offered for sale via a newspaper advert bramblefinch cocks and hens. The court held that the newspaper advertisement could only be an invitation to treat, since it could not have been intended as an offer to the world, so the defendant was not guilty of "offering" them for sale. In the same way, when you to the supermarket and remove goods from the shelves, you would then take them to the checkout to pay for them. When you go the checkout, you make an offer of payment, and the shop accepts that.

Applying this to the process of taking out a credit card, when the prospective debtor puts in his/her form, he is making an offer, but there has been no formal acceptance of this by the lender.

In this respect, perhaps s59 (An agreement is void if, and to the extent that, it purports to bind a person to enter as debtor or hirer into a prospective regulated agreement), in that after acceptance by the lender, the formal agreement should be forthcoming for signature?

But, if the lender doesnt sign, then it does seem clear that there has not been an executed agreement, and to be honest I am not really clear what the consequences are/ should be. I will need to have a think about that!

 

Hi SFU,

 

The question is, if the debtor can be shown not to have signed anything,

is it game over because section 61 (1) hasn't been complied with and section 127 (3) then applies or because there is no executed agreement to enforce?

 

By definition, an agreement which isn't executed can't be properly executed. It is just an odd concept to consider whether something that doesn't exist complies or doesn't comply with a set of rules because it clearly can't.

 

And logic says that if it isn't an executed agreement, it must be an unexecuted agreement which the definitions say means a prospective agreement i.e. something intended to happen but which may never happen and hasn't happened.

 

My reasoning about section 61 (1) was that signing there meant signing in the prescribed manner which is different to just signing i.e. there is a two stage process - 1) was the agreement signed and therefore executed.

2) If (but only if) yes, was it signed in the prescibed manner - and the consequences could be different depending on which stage wasn't satisfied.

 

I hope to consult Prof. Goode's book to see what he might have to say!

 

I don't think there is a problem about the lender concluding the agreement because he does this by giving the borrower the money or the card with a credit limit. The point is that the legislation says that these sort of agreements need to be signed and satisfy conditions.

[pedross]

Hi SFU,

 

The question is, if the debtor can be shown not to have signed anything,

is it game over because section 61 (1) hasn't been complied with and section 127 (3) then applies or because there is no executed agreement to enforce?

 

I think you will find it is game over because the debtor has not agreed to repay the money. Its as basic as that. I think the point is there is nothing at all to enforce.

 

The debt or the regulations are not relevant in this case because if they give you money and they have no proof that you have agreed to repay it then its a gift.

Edited January 18, 2010 by pedross

[rhos123]

in reply to a recent cca s.78 request, i have recived a copy "of the current reconstituted version of the executed agreement" ? regulation 3(2)(b) does anyone know what this means.

[seriously fed up]

If the debtor (eg you) havent signed then they are toast because it breaches s61 (1), but there is no "get out of jail free" card from 127(3) which allows a breach of s61 (1) by allowing another document with the prescribed terms to be signed by the debtor, but it has to be signed by the debtor. So its breach of s61(1) which takes us to 65(1) - that the agreement can be enforced only by the court - which takes us to 127(3) which prevents the court from issuing the notice as 61)1) has been breached and there is no other sig document.

My view for what its worth is that actually there is a three stage process.

 

1. prospective debtor makes application on the application forms they send us back
   
2. lender considers application and if ok should send an agreement with all the t&cs (laid out according to the agreement regs) to the prospective debtor, already signed by the creditor, to be signed by the debtor. Debtor sends this back when they have signed
   
3. lender sends out card on receipt of the agreement - now properly executed.
   

But the banks, I dont think, could be bothered dealing with all these legal niceties and admin, and reduced it to 2 - application form completed, considered and sends out card (ie all of 2 above simply missed out). This could get them caught up in things like s59 - "An agreement is void if, and to the extent that, it purports to bind a person to enter as debtor or hirer into a prospective regulated agreement". Most of the "agreements" that they send out have this flaw - "if my application is successful" etc. Yes, it also says "this is a consumer credit act agreement and I agree to be bound by its terms" - but if you consider s59 again - purports to bind a person" - then that only makes it worse. Moreover, this view is also supported by wider contract law, as I pointed out.

As for your own view, it is just not deniable that for an agreement to be an executed agreement within the terms of the CCA1974 it MUST be signed by both parties. There is no gainsaying that. The issue is the consequences and there are certainly worse places to start resolving that than Goode.

[seriously fed up]

in reply to a recent cca s.78 request, i have recived a copy "of the current reconstituted version of the executed agreement" ? regulation 3(2)(b) does anyone know what this means.

 

Sounds like someone taking advantage of the recent Manchester judgement allowing reconstituted versions to be sent out in response to a s78.

Regulation 3(2)(b) - no idea. Just dont let them tell you that a reconstituted version is enforceable in court. The Manchester judgement says that a reconstitution can satisfy a s78 request, which means that they can continue their enforcement procedures (phoning, letters etc). But if they want to enforce in court they need a signed agreement and that has to mean the original, with all the prescribed terms.

[diddydicky]

i was referring to a missing creditors signature

[rhos123]

Sounds like someone taking advantage of the recent Manchester judgement allowing reconstituted versions to be sent out in response to a s78.

Regulation 3(2)(b) - no idea. Just dont let them tell you that a reconstituted version is enforceable in court. The Manchester judgement says that a reconstitution can satisfy a s78 request, which means that they can continue their enforcement procedures (phoning, letters etc). But if they want to enforce in court they need a signed agreement and that has to mean the original, with all the prescribed terms.

 

thanks for the reply , sfu. so really in laymans terms, the pile of junk they have sent is all they have got, surley if they had the ace card then then they would deal? or maybe a game of bluff?

[diddydicky]

always remember that the creditors filing and archive systems are immense and as it increasing appears hard to get access to documents

 

many of them will not even attempt to get the original document from archive until court action looms so do not always assume that they have not got it

[ceejay123]

If the debtor (eg you) havent signed then they are toast because it breaches s61 (1), but there is no "get out of jail free" card from 127(3) which allows a breach of s61 (1) by allowing another document with the prescribed terms to be signed by the debtor, but it has to be signed by the debtor. So its breach of s61(1) which takes us to 65(1) - that the agreement can be enforced only by the court - which takes us to 127(3) which prevents the court from issuing the notice as 61)1) has been breached and there is no other sig document.

My view for what its worth is that actually there is a three stage process.

 

1. prospective debtor makes application on the application forms they send us back
   
2. lender considers application and if ok should send an agreement with all the t&cs (laid out according to the agreement regs) to the prospective debtor, already signed by the creditor, to be signed by the debtor. Debtor sends this back when they have signed
   
3. lender sends out card on receipt of the agreement - now properly executed.
   

But the banks, I dont think, could be bothered dealing with all these legal niceties and admin, and reduced it to 2 - application form completed, considered and sends out card (ie all of 2 above simply missed out). This could get them caught up in things like s59 - "An agreement is void if, and to the extent that, it purports to bind a person to enter as debtor or hirer into a prospective regulated agreement". Most of the "agreements" that they send out have this flaw - "if my application is successful" etc. Yes, it also says "this is a consumer credit act agreement and I agree to be bound by its terms" - but if you consider s59 again - purports to bind a person" - then that only makes it worse. Moreover, this view is also supported by wider contract law, as I pointed out.

As for your own view, it is just not deniable that for an agreement to be an executed agreement within the terms of the CCA1974 it MUST be signed by both parties. There is no gainsaying that. The issue is the consequences and there are certainly worse places to start resolving that than Goode.

 

But is an application form an agreement unless and until the lender accepts it and (if yes) does it bind the person filling it in to enter into a prospective agreement if he has the right to cancel?! I suspect that the provision is there so that people can't be made to sign up to an agreement without all the proper formalities.

 

Going back to unsigned, and therefore unexecuted, agreements

section 61 (1), 65 (1) and therefore 127 (3) refer to regulated agreements. If an unexecuted agreement is only prospective, how can these sections apply? I would therefore like to think that there is just no agreement to enforce.

[rhos123]

always remember that the creditors filing and archive systems are immense and as it increasing appears hard to get access to documents

 

many of them will not even attempt to get the original document from archive until court action looms so do not always assume that they have not got it

 

right point taken, but where do they get the information from to reconstitue

the agreement, must it be from the original they have in thier archive system?

[seriously fed up]

they do indeed shoot themselves in the foot

 

in the back of the foot since they seem to send the sig page without the T & Cs whereas the act allows them NOT to send the sigs but insists they send the T & C's

 

Yes, for s78, BUT if they are looking to enforce in court then they need the sigs (or at least the debtor's)

[seriously fed up]

always remember that the creditors filing and archive systems are immense and as it increasing appears hard to get access to documents

 

many of them will not even attempt to get the original document from archive until court action looms so do not always assume that they have not got it

 

Yes, true, but faced with a s78 request is it really feasible for lenders to say ALL THE TIME, or even most of it, we cant find it, here's a recon, but come up with the real deal if/when they take it to court?

[basa48]

there is a copy attached to this. Unfortunately its post 2004 amendments, but a post I saw somewhere suggests that this part wasnt much changed. Copies of the pre 2004 regs are very hard to come by. But if anyone has a copy, or knows where one can be had .......

 

1983 Regs - pre 2004:

[seriously fed up]

But is an application form an agreement unless and until the lender accepts it and (if yes) does it bind the person filling it in to enter into a prospective agreement if he has the right to cancel?! I suspect that the provision is there so that people can't be made to sign up to an agreement without all the proper formalities.

 

Going back to unsigned, and therefore unexecuted, agreements

section 61 (1), 65 (1) and therefore 127 (3) refer to regulated agreements. If an unexecuted agreement is only prospective, how can these sections apply? I would therefore like to think that there is just no agreement to enforce.

 

Well, I suppose as the old saying goes, "it takes two to tango". Certainly most definitions I have seen of a contract require there to be two parties (at least) - one for offer and the other for acceptance. As I explained I am not sure how the process that has been used to send out credit cards fits into that.

On the other hand, if we think in terms of wider contract law (not just within the CCA) then a contract can be put into effect by conduct. For instance, if my employer were to tell me tomorrow that he is cutting my wages by 50% I am not going to be very happy and its likely I would protest. BUT, if I continued to work (for a period - not just a few days/weeks) it would be held that I had impliedly accepted the new contract. By extension it MIGHT be argued (and I am being devil's advocate here ceejay ) that by providing the money for us to spend with the credit card that we had applied for (or loan etc) that the lender had impliedly accepted the contract.

Going back to the CCA, as I have said, in terms of the definition in the Act, I really dont see how an agreement could be said to be executed if the lender hasnt signed up on their side. But the problems come later because 61 (1) would make it improperly executed and enforceable only by a court order. Often - in cases where there are no prescribed terms - 127 (3) comes into play, but not in this case as it only requires that the debtor has signed, and as you, I think, accept, you did sign, so you would have to fall back on 127 (1) or (2) which gives the court discretion, and - maybe I have spent too long reading about the travails of Humbleman - I dont think you could rely on a court offering you protection.

But that is where improperly executed takes us. But if the document has not been signed by the lender is it improperly executed, or is it that it has not been executed at all since it doesnt satisfy the definition of an executed agreement. Unfortunately, improperly executed isnt defined, which would have been helpful. But I can see the argument. I think you have gone on to suggest that 127 (4) could be relevant, which has much the same effect as 127 (3) but on the basis of non-compliance with 62 or 63 or 64 (1). The last of these is irrelevant for our purpose as it has to do with cancellation. Nor does 63 help as it seems to focus on where when the debtor signs the agreement becomes executed, which, it seems to me, must imply that the lender has signed already. S62 seems a bit more interesting as when the debtor signs the agreement is not executed (presumably the lender is still to sign),but what it requires is that when the lender does sign that a copy is sent to the debtor or given there and then. So, in my view, if you focus on 127 (4) it doesnt really take us anywhere

As I have said, I fully see your point. I dont see how an "agreement" that hasnt been signed by the lender can fit the definition of an executed agreement. But in such cases, there has to be the danger that the court will look outwith the CCA (partly because I'm not sure it provides a solution) and might, for instance, follow the logic in my example of reducing my wages by half.

[seriously fed up]

1983 Regs - pre 2004:

 

Thanks (I think) Basa - not quite as good as the 2004 version. For instance the ref to the sig box being last is missing (damn!) but still pretty prescriptive and a requirement that terms shouldnt be interspersed with other information, or failing this, that the information set out in the regs is flagged up in its own section (ie where to find it). So still a few bombs there. Will absorb over the next few days.

Thanks again.

[diddydicky]

right point taken, but where do they get the information from to reconstitue

the agreement, must it be from the original they have in thier archive system?

 

usually a microfiche copy of the front of the agreement taken before they archive or destroy them

 

also from the appl form details that they punched into their computer

 

if they are hard to read they are undoubtedly reconstructed and not copies of the original

 

 

modern photocopiers are so good these days even counterfeiters use them so any photocopy of an original should be very readable

[seriously fed up]

but if they want to enforce at court, then they have to provide the original and not a copy, so a microfiche (or worse a photocopy of a microfiche) wouldnt do?

[the_shadow]

but if they want to enforce at court, then they have to provide the original and not a copy, so a microfiche (or worse a photocopy of a microfiche) wouldnt do?

 

Down to the judge on the day on what evidence they'll accept... in theory the higher the court the more formal evidence required...

 

S.

[seriously fed up]

Down to the judge on the day on what evidence they'll accept... in theory the higher the court the more formal evidence required...

 

S.

 

I see

 

"modern photocopiers are so good these days even counterfeiters use them so any photocopy of an original should be very readable"

[diddydicky]

but if they want to enforce at court, then they have to provide the original and not a copy, so a microfiche (or worse a photocopy of a microfiche) wouldnt do?

 

 

change "have" to "should" and you're right

[diddydicky]

I see

 

"modern photocopiers are so good these days even counterfeiters use them so any photocopy of an original should be very readable"

 

well lets put it this way,

 

if you get a photocopy that is unreadable then that is really good news because it would mean the original it was copied from would be equally as un readable which would be as much use in court as a chocolate fireguard!