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Contracts, Termination, Repudiation and Rescission


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Contracts, Termination, Repudiation and Rescission

Lately there has been much debate about the above , this is my take on it.

 

If we first look at an unregulated business contract we can perhaps define the terms a little more easily.

My simple definition of a contract is ; An agreement between two or more parties to provide benefits to all sides in equal proportion in consideration of there respective expectations.

These respective expectations are laid out in the terms of the agreement.

If we first look at an unregulated business contract we can perhaps define the terms a little more easily.

 

Worked example:

A window cleaner contracts to do your windows at a fee that you pay in arrears of service for instance.

This kind of an arrangement would not usually be documented but just humour me and lets say an agreement was drawn up.

The contract would say I the window cleaner do ,etc etc for the weekly fee of £*** .

So far so good but what happens if the customer fails to pay .

This is a simple contract and common law would say that the breach by the customer was a repudiation

of agreement and the window cleaner would be within his rights to accept that repudiation, terminate the contract and claim damages of the sum owed.

If this where to be litigated the court would seek to remedy by rescinding the agreement ,ie removing the liability of the customer by ordering repayment thus returning the relationship between the two parties to the time when no agreement existed.

 

Say now that the window cleaner had negotiated a contract with a housing association to clean all their windows, on a house by house costing and on the strength of this contract had invested in building his business to the degree where he could fulfil his obligations under the contract.

Since it would be some time until he could recoup his investment he would want to ensure the continued custom of the housing association so he includes a time element into the contract. The housing association agrees to an annual contract.

If the association now fails to pay then this would still be a core term breach and covered under the common law rights of repudiation, termination and recovery but in addition common law would allow the window cleaner to reclaim an amount which would represent the future loss of income(a genuine pre-estimate of loss).

Failure to perform of the window cleaner, also would be covered in the same way under common law.

Say then the window cleaner being a sound business man said what I need is the ability to terminate this agreement if for instance the number of houses referred to me dropped to the extent that it was no longer profitable for me to continue. This would not be a repudiatory breach of contract as none of the core terms would have been compromised, so the common law would not operate.

So he introduces a new term in the agreement saying that if the number of referrals drops to a certain level he has the right to terminate the agreement and includes that in this event all outstanding charges due at the time of termination would be due and payable.

So now the contract has two means of termination one is contractual and one is through repudiation and the common law rights of the aggrieved party to recover damages.

 

I think we should pause here and recap the difference represented by these two different types.

“Termination” means the withdrawal of all rights under the agreement this is unchanged, what is different is the actions that can be taken because of the way the termination is made.

The contractual termination(made under a term of the agreement) is not a core breach, the termination was made by the trader so he would not be able invoke common law and sue for future losses, in the case of a repuiatory breach whilst the trader still terminates, it is due to the actions of the association and termination would allow a claim.

Looking at it another way by invoking a term of the contract the trader has affirmed that the agreement still exists so he can not claim it has been repudiated.

 

Before applying these definitions to consumer agreements I would like to make a point. There has been much talk on here of contract law taking over when the act does not apply( by this I presume they mean common law). This is to my mind a basic misconception.

A consumer credit agreement was just a business contract until 1983 and it still is. Contract law still applies to the agreement in the same way it always has, it is up to the creditor to say what terms appear on the agreement and the debtor to agree or not just as it always was.

All statute does is place parameters on those terms in the intent of protecting consumers.

This is important to understand as it is not for the statute to permit or initiate actions under the agreement.

The act may require the creditor to take certain actions, provide copies , default notices, bit these are requirements of statute not of the contract.

So when someone says,” where does it say in the act that you can do such a thing ?” , the answer is, “it doesn’t” the act does not work like that.

The question should be,” where is the statute that limits the creditor to contractual right to do a thing?”

All this may seem to be off the original topic but I think when it comes to discussing default notices the connection will become clearer

Regulated agreements

In the knowledge that a regulated agreement is no different in essence from any other agreement we can apply the above definitions.

 

Termination under contract

This is usually a section contained in the contract(Terms and Conditions) which states the creditor may terminate at any time and on termination all sums due under the agreement become payable.

The common reaction to this is, ”They cant do that can they” well has we have previously established they can, the reason is that there is nothing in the statute that says they cannot.

But lets just consider what is being said the agreement is being terminated and all sums are due, it does not say immediately due it cannot because that would be breaching another term of the contract.

All that is being effectively terminated is the creditor obligations under the contract, the rights of the debtor to continue paying his instalments continues, only a breach on his part would alter that.

The liabilities under the contract are still there and common law would still expect them to be replayed In the manor originally required by the contract.

However having said that the agreement has been terminated, on a consumer credit agreement there is no real difference between a contractual termination and a termination under common law, because there are no issues of damages just recovery of liabilities currently under the contract.

 

 

Termination on breach of contract

 

The other cause for termination is breach by the debtor of one of the core terms of the agreement, the repayment schedule.

The act of not repaying the loan would be a repudiatory breach of the agreement and actionable under common law. If it where not for the act this repudiation would be accepted, the agreement discharged and procedures commenced to recover the liabilities due under the contract.

However as part of its function of consumer protection the act ensures that we have a chance to remedy before the agreement is discharged. (section 87)

In this respect the default notice could be considered as the acceptance of the repudiation.

As a consequence of this analysis it is plain that the associated termination /discharge of the agreement cannot take place unless the repudiation is confirmed (a correctly executed default is issued)therefore there can be no termination.

This conclusion is further compounded by the wording of section 87

(1) Service of a notice on the debtor or hirer in accordance with section 88 (a “default

notice”) is necessary before the creditor or owner can become entitled, by reason of any

breach by the debtor or hirer of a regulated agreement

Notice it says “breach of an agreement” not, “ breach of a term of the agreement”

Also it says,” can be come entitled to “ this means that if there is no breach no repudiation there is no entitlement to terminate under this statute.

 

So the issue of whether a termination issued after a incorrectly executed notice is effective is solved because the contract cannot be terminated in that instance.

 

I have personal experience that supports this analysis. A few years ago one of our members (Credit union) was having trouble with a well known HP provider they had repossessed his vehicle for arrears of payment.

On examination of his default notice it was proven to be seriously defective in the amount of payment required for remedy.

One of our other members who is a solicitor was roped in to help.

We succeed in getting the case set aside and then our solicitor put a counter claim against the company for conversation (theft) of the vehicle.

The argument was that since the default was defective the termination of the account was also ineffective. That being the case the car was still the property of the purchases and the company had no right to take it.

The result was the case being dropped in short order the car returned and the account closed with amounts owed written off.

Source material for this post are to be found in Stocksnya Gdynia SA V Geaarbrook Holdings Ltd 2009

 

Consumer Credit Act 1974 Assoc SI

Best regards

Peter

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Thanks for this Peter.

 

With regard to the taking of the car on the back of a faulty DN we are surely looking at a different form of agreement for starters. Secondly, if the vehicle is taken on the back of a faulty DN the consumer has one of two options dependent on the amount they've paid so far.

 

If less than a third has been paid the car is not protected from repo, however the taking of it after a faulty DN allows the consumer to state the right to possession has been unlawfully interfered with and can use Chartered Trust plc v King (2001) WL 172107 to recover all of the money that had been paid, irrespective of the duration involved.

 

If more than a third has been paid the car is protected from repo under section 90 of the CCA and the consumer can again recover all payments made under section 91 of the CCA regardless of how long they had the car.

 

So, in both of these examples the consumer after being wronged by the creditor issuing a faulty DN has the right to recover all of the payments they have made to the creditor. The court seems happy to effectively punish the creditor by awarding all sums paid to be returned after repo has happened on the back of the bad DN.

 

Why then would it seem to be the case that where a creditor has issued another invalid DN on a credit card account for example and then terminated that the principle of that invalid DN and subsequent (ineffective) termination is essentially overlooked, tolerated even?

 

Why is termination on this type of account different to termination (with the repo of the car) on a car loan?

 

How is the creditor effectively entitled to issue DN after DN once they have indicated their desire to terminate the agreement with formal notice, especially when the consumer has accepted that desire to terminate with their own letter?

 

If the consumer has accepted the offer to terminate what place has the court got to intervene when the creditor realises their error and effectively asks the court to undo their mess and force the consumer to accept the agreement is still in fact 'alive'?

 

I can't take a bank to court if they don't want to give me a premium account for example, it is the choice of the bank if they wish to enter into an agreement with me and provide me with that sort of account.

 

The court can't intervene with the business practice of the bank and force them to enter into an agreement with me so how can the court brush aside the fact the consumer is holding a letter of termination in their hand from the creditor along with a copy of their recorded delivery letter of acceptance and declare that the creditor 'didn't mean to terminate' so your acceptance of that is ineffectual and the agreement is still live?

 

I do not understand how the failure to issue a correct DN categorically undermines any subsequent termination, I believed the CCA is there primarily to protect the consumer from unscrupulous lenders and secondly to protect the legitimate business interests of the creditor.

 

If the lender fails to observe the regulations enacted to give them the right to recover their money how can they then rely upon it at a later stage? I understand from your points above that the CCA takes something of a lower standing compared to the specific terms agreed upon between the creditor and the consumer for each individual agreement.

 

If I have that right then how can the lower standing CCA then adopt higher priority when the creditor decides it suits them to use that once they realise they have messed the DN and termination stage up?

 

Lots of questions I know but this is a big subject and I do not understand how the clear intent of the bank as communicated by letter to terminate an agreement is dissolved purely because they have chosen not to comply with seemingly secondary and arguably optional (given history to date) parts of the CCA that are there to protect their rights to recover their money.

 

If they choose not to protect their interests what concern is that to the courts or to the consumer (primarily protected by the CCA over the creditor) when they have clearly chosen to pull the agreement?

 

We have seen the case law supporting the notion of using caution as to what leaves your hand, and to what you have signed.

 

How does an official termination and demand for the whole balance escape this, on top of the earlier points above?

Edited by emandcole

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Thanks for this Peter.

 

With regard to the taking of the car on the back of a faulty DN we are surely looking at a different form of agreement for starters. Secondly, if the vehicle is taken on the back of a faulty DN the consumer has one of two options dependent on the amount they've paid so far.

 

If less than a third has been paid the car is not protected from repo, however the taking of it after a faulty DN allows the consumer to state the right to possession has been unlawfully interfered with and can use Chartered Trust plc v King (2001) WL 172107 to recover all of the money that had been paid, irrespective of the duration involved.

 

If more than a third has been paid the car is protected from repo under section 90 of the CCA and the consumer can again recover all payments made under section 91 of the CCA regardless of how long they had the car.

 

So, in both of these examples the consumer after being wronged by the creditor issuing a faulty DN has the right to recover all of the payments they have made to the creditor. The court seems happy to effectively punish the creditor by awarding all sums paid to be returned after repo has happened on the back of the bad DN.

 

Why then would it seem to be the case that where a creditor has issued another invalid DN on a credit card account for example and then terminated that the principle of that invalid DN and subsequent (ineffective) termination is essentially overlooked, tolerated even?

 

Why is termination on this type of account different to termination (with the repo of the car) on a car loan?

 

How is the creditor effectively entitled to issue DN after DN once they have indicated their desire to terminate the agreement with formal notice, especially when the consumer has accepted that desire to terminate with their own letter?

 

If the consumer has accepted the offer to terminate what place has the court got to intervene when the creditor realises their error and effectively asks the court to undo their mess and force the consumer to accept the agreement is still in fact 'alive'?

 

I can't take a bank to court if they don't want to give me a premium account for example, it is the choice of the bank if they wish to enter into an agreement with me and provide me with that sort of account.

 

The court can't intervene with the business practice of the bank and force them to enter into an agreement with me so how can the court brush aside the fact the consumer is holding a letter of termination in their hand from the creditor along with a copy of their recorded delivery letter of acceptance and declare that the creditor 'didn't mean to terminate' so your acceptance of that is ineffectual and the agreement is still live?

 

I do not understand how the failure to issue a correct DN categorically undermines any subsequent termination, I believed the CCA is there primarily to protect the consumer from unscrupulous lenders and secondly to protect the legitimate business interests of the creditor.

 

If the lender fails to observe the regulations enacted to give them the right to recover their money how can they then rely upon it at a later stage? I understand from your points above that the CCA takes something of a lower standing compared to the specific terms agreed upon between the creditor and the consumer for each individual agreement.

 

If I have that right then how can the lower standing CCA then adopt higher priority when the creditor decides it suits them to use that once they realise they have messed the DN and termination stage up?

 

Lots of questions I know but this is a big subject and I do not understand how the clear intent of the bank as communicated by letter to terminate an agreement is dissolved purely because they have chosen not to comply with seemingly secondary and arguably optional (given history to date) parts of the CCA that are there to protect their rights to recover their money.

 

If they choose not to protect their interests what concern is that to the courts or to the consumer (primarily protected by the CCA over the creditor) when they have clearly chosen to pull the agreement?

 

We have seen the case law supporting the notion of using caution as to what leaves your hand, and to what you have signed.

 

How does an official termination and demand for the whole balance escape this, on top of the earlier points above?

 

Hi

It was a staqndard car HP agreement regualtedunder the act.

The one third rule would allow them to reposses without oreder of the coujrt for sedction 90 they would need a court order whichch they had due to the action taken for arrears.

 

Customers cant accccept offes to terminate if they could they could also refuse

Read the article or the case law or just read

 

It is repudiation that has to be accepted

 

i dont know why i get drawn into this rubbish no longer.

 

Peter

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ok so lets start and build up the picture

 

the creditor, under a clause in the agreement- the consumer not being in breach- excercises his right to terminate the agreement............and you agree that this does not mean that he can demand immediate repayment of those sums not yet due - so the consumer carries on making monthly payments

 

without going on to any other tack......can you say which terms and conditions pertaining to the agreement- which the creditor has now terminated- remain in force?

 

if it is your case that all the terms and conditions remain in force- then what exaclty is it that the creditor has terminated?

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Hi

It was a staqndard car HP agreement regualtedunder the act.

The one third rule would allow them to reposses without oreder of the coujrt for sedction 90 they would need a court order whichch they had due to the action taken for arrears.

 

Customers cant accccept offes to terminate if they could they could also refuse

Read the article or the case law or just read

 

It is repudiation that has to be accepted

 

i dont know why i get drawn into this rubbish no longer.

 

Peter

 

Thanks, very helpful :evil:

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ok so lets start and build up the picture

 

the creditor, under a clause in the agreement- the consumer not being in breach- excercises his right to terminate the agreement............and you agree that this does not mean that he can demand immediate repayment of those sums not yet due - so the consumer carries on making monthly payments

 

without going on to any other tack......can you say which terms and conditions pertaining to the agreement- which the creditor has now terminated- remain in force?

 

if it is your case that all the terms and conditions remain in force- then what exaclty is it that the creditor has terminated?

 

Hi

This is a good question for once.

On a business contract this is a very important issue because I would as said limit the liability for the injured party to reclaim his genuine pre estimated costs if the agreement was terminated under the contractual terms rather than the result of a breach. this does not apply of course in a consumer credit agreement.

I digress

If you look at the case law at the bottom of my original post youi wil lsee that even the judges are divided on this ,although the ruling suggested that the earlier termination does not stop the agreement being terminated on repudiatory breach under common law this I think is the case here.

Simplistically I would say that a termination is a termination. But the contract, (small c) still endures under common law until the agreement is relived of the liabilities under it.

Sorry if that is a bit complicated I certainly find it so but I think it is correct

 

Peter

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Hi again

 

as an addition to the above i would find it very unlikely that the creditor wuld totallly termiant the agrement under this clause even though he couold he my just wish to terminate the debtors right to draw down credit.

 

There is also an added part to this damages thing in regrding to section 98.

 

If a fixed term agreemnt is cancelled early by the debtor he has to pay a proportion of the losses incured buy the loss of brgain of the creditor, these are calcualted using the early repaymetn regulations, if however the creditor terminates using section 98 i do not believe he would be entitled to do this only the amount due at the time of termination would be recoverable.

peter

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hi this may be useful an analysis of the gearbrook case

 

A customer's decision to terminate a contract and then to use that contract's remedies to recover money did not prevent that company also suing for common law damages over a supplier's failure to fulfil the contract, the Court of Appeal has ruled.

 

 

Last week's ruling could make it easier for customers to exercise both contractual and common law remedies on the termination of a supply contract, a legal expert has said.

Shipyard Stocznia Gdynia failed to build three ships as agreed with buyer Gearbulk Holdings so Gearbulk terminated the contract for each ship. It did so by exercising a right in the contracts that required Stocznia to repay any money already paid.

In its letter of termination, Gearbulk demanded the return of its prepaid instalments. Gearbulk then sought to recover common law damages for the shipyard's failure to fulfil the contract.

When a contract is breached so fundamentally that the other party is allowed to terminate that contract common law damages can be sought. Such damages are known as repudiatory damages. By failing to deliver the ships at all, Gearbulk said that Stocznia had acted in repudiatory breach of contract.

The shipyard argued, though, that Gearbulk could not treat the contracts as repudiated because it sought to rely on the refund provisions.

When a supplier fundamentally breaches the terms of a contract, the customer has a choice either to treat the contract as still in existence, which is called affirming the contract; or terminate and seek damages for repudiation at common law. Stocznia said that Gearbulk's exercise of the refund provision affirmed the contract.

If the shipyard's argument was upheld, i.e. if the contract had been affirmed, Gearbulk would not be able to then seek repudiatory damages.

The High Court said that there was affirmation, but the Court of Appeal disagreed. Overturning the earlier decision, it said that Gearbulk's exercise of its contractual right to terminate did not remove its right to claim damages under common law.

"[stocznia's QC] Mr. Dunning sought to argue that Gearbulk had no right to recover damages for loss of bargain in this case because the effective cause of its loss was not the Yard's breach of contract but its own decision to exercise its contractual right of termination. I cannot accept that," wrote Lord Justice Moore-Bick. "I think it is clear that in this case the contract proceeds on the footing that if Gearbulk chose to exercise its right, the Yard's breach was to be viewed as the effective cause of the contract's termination."

"[Termination clause] Article 10 does not exclude Gearbulk's right to recover damages at common law for the loss of its bargain," he wrote. "I am quite unable to accept that the exercise by Gearbulk of its right to recover instalments of the contract price under Articles 5.9 and 10.7 involved an election on its part to affirm the contract."

"In the first place, Gearbulk's letters exercising its right to terminate the contracts … were wholly inconsistent with an election to affirm them, so there can be no doubt that the contract in each case was discharged," said Lord Justice Moore-Bick. "The right to recover the instalments of the price, together with the right to obtain payment under the bank guarantee, arose only on and by reason of the termination of the contract. I think it is clear, therefore, that the parties intended it to survive the termination of the contract, just as, for example, they intended the arbitration clause to survive. Reliance on that obligation could not, therefore, amount to an election to keep the contract in being."

Dispute resolution specialist Richard Twomey said that the ruling is good news for companies that are being let down on major contracts.

"Companies are sometimes wary to terminate the contract and seek to enforce the contractual remedies because they fear prejudicing their ability to claim damages at common law. The rights have always been rather uncertain," he said.

Twomey said that common law damages can be much higher than contractual remedies sometimes allow, so that is often a company's preferred claim.

"A party seeking repudiatory damages will be seeking a sum that puts it in the position that it would have been in had the contract been performed properly. That can be much more than, for example, the sums specifically recoverable under the contract," he said. "But this ruling will give companies confidence that they can make both contractual and common law claims."

As this case demonstrates, suppliers should consider addressing repudiatory damages in their contracts, according to Twomey.

"The ruling might have been different if the contract had provided that a claim under the contract would exclude any right to repudiatory damages," he said. "It would be worth suppliers trying to get such an exclusion or waiver into their contracts to reduce the range of remedies available to claimants like Gearbulk.

Twomey said that a customer seeking to terminate an agreement should make clear in its letter of termination not just that it's claiming any benefits under the contract's termination provisions, but also that it reserves all rights, including the right to seek repudiatory damages. "This approach gives the terminating party maximum flexibility when it comes to enforcing its rights," said Twomey

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Hi

I would like again to challenge the percieved view of the Woodchester judgement in relation to the creditor’s repudiation, and authority that only the arrears are due on an invalid notice. I know it has been going on for some time on here but I just cannot see it. Never could

As far as I can see the pleadings, in the case they where in two parts the recovery of the arrears, which was also the amount to remedy and the sum amounting to the future loss of income under the agreement.

The arrears where admitted but the amount was in question.

Also in question was if the breach by the debtor was a repudiatory breach under common law

(mentioned in the report as item 4)this was not ruled on because the judgement on the invalid notice settled the question.

This is important is because, if the breach was contractual(not repuiatory) then the estimate of future losses would be a penalty and not recoverable under common law.

This is in essence what happened when the default notice was judged to be defective, obviously the arrears which where actual liabilities were payable but the future earnings were not.

This was a hire agreement.

If it were a loan the total amount would be due and payable, if the default is defective then the creditor can just re issue the default for the corrected amount of arrears, but the full balance still owes whatever happens.

Actual liabilities under a contract cannot just disappear. This would contravene the creditors human rights an any way the act will not allow such a sanction.

In woodchester the appellant was found not to owe future costs under the agreement, and the arrears where only due.

Unless the debtor continued to hire no further actual costs would accrue, the creditor cannot claim further repudiation because the account would be up to date. This would not be the case with a loan as there would still be a balance of liabilities on the agreement.

If of course the creditor remedies the breach then he is entitled to continue repaying those liabilities as per the contract

Peter

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the debtor misses three monthly payments (or 6 or 9)

 

YOU say that this amounts to an unlawful repudiation by the debtor- then if this is the case why can the creditor NOT simply "elect to accept the debtors actions as an unlawful repudiation " and relieve himself of HIS obligations?

 

the fact is that the Creditor CANNOT accept the debtors actions as a repudiation- which is what parliament intended...........

 

the creditor must serve a (Valid) DN on the debtor- stating precisely what the debtor has done wrong- and what he must do to "put it right" - - and if the debtor does so- it will be as if the breach had never occurred.

 

ONLY when the debtor fails to remedy the DN- does he repudiate- which is ENTIRELY in keeping with the act of "envincing the other party of an intention not to perform"- since hitherto the debtor has merely "failed" for whatever reason to make the agreed repayments on time which is not the same as saying "i refuse to perform" .

 

you will note that there is no such procedure to follow on the part of the debtor - if the creditor "envinces an intention not to perform" and the debtor (if the creditors actions are serious enough and "go to the heart of the agreement" - can immediately make an election

 

there can be no CLEARER statement of an intention not to perform - as made by the creditor in a defective DN and/or subsequent TN

 

you just will NOT see that the CCA is deliberately biaised towards the unsophisticated consumer- and it is more to do with a failure to plead the case and requirements of the act properly in court that leads to bizarre decisions- rather than any different view of the act on the part of lower court judges

what the creditor MUST do- is give the debtor a chance to remedy the alleged default- and if he does- then it is as if the breach had never occurred

 

 

the debtor, on the other hand does not have to serve any Dn on the creditor if the creditor unlawfully repudiates- he can make the election right off

 

herefore it is as clear as a pikestaff that the debtors actions cannot amount to a repudiation UNTIL

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the debtor misses three monthly payments (or 6 or 9)

 

YOU say that this amounts to an unlawful repudiation by the debtor- then if this is the case why can the creditor NOT simply "elect to accept the debtors actions as an unlawful repudiation " and relieve himself of HIS obligations?

 

Because the act will not let him he must serve a valid defaul notice

the fact is that the Creditor CANNOT accept the debtors actions as a repudiation- which is what parliament intended...........

 

ice

the creditor must serve a (Valid) DN on the debtor- stating precisely what the debtor has done wrong- and what he must do to "put it right" - - and if the debtor does so- it will be as if the breach had never occurred.

 

Yes This is true

ONLY when the debtor fails to remedy the DN- does he repudiate- which is ENTIRELY in keeping with the act of "envincing the other party of an intention not to perform"- since hitherto the debtor has merely "failed" for whatever reason to make the agreed repayments on time which is not the same as saying "i refuse to perform"

 

Only when the repudiaton is accepted is it complete .

 

you will note that there is no such procedure to follow on the part of the debtor - if the creditor "envinces an intention not to perform" and the debtor (if the creditors actions are serious enough and "go to the heart of the agreement" - can immediately make an election

 

No Idea what this means,i think you are saying thast if the creditor says he is going to terminate it is a bigger breach than if the debtor actualy breaches .I have to say nonesense

 

there can be no CLEARER statement of an intention not to perform - as made by the creditor in a defective DN and/or subsequent TN

 

The DN defective or not was tought about by the debtors default

you just will NOT see that the CCA is deliberately biaised towards the unsophisticated consumer- and it is more to do with a failure to plead the case and requirements of the act properly in court that leads to bizarre decisions- rather than any different view of the act on the part of lower court judges

 

Not to the extent you seem to think it is

 

what the creditor MUST do- is give the debtor a chance to remedy the alleged default- and if he does- then it is as if the breach had never occurred

 

well yes i think we all know that. That is if the breach is capable of remedy.

 

the debtor, on the other hand does not have to serve any Dn on the creditor if the creditor unlawfully repudiates- he can make the election right off

 

herefore it is as clear as a pikestaff that the debtors actions cannot amount to a repudiation UNTI

Yes i see and your authority for this?

So a debtor cannot repudiate an agrement wow interesting. All them judjes wrong ,hadn't someone better tell them!

 

L

 

Anyway not a lot to say really.

 

You either believe that the creditor can repudiate his own agrement when the debtor has already defaulted and is in the middle of being taken to court or you dont.

 

It is pretty clear that the judiciarry do not, you and your cohorts have been plugging away at this for nearly twelve months now advising people to accept terminations and going on about the creditor invincing something or other, up to date the result has been 100% failure.

Really it is about time some of your friends started thinking for themselves and not following some post made back in 08 which was totally missconcieved.

 

I cannot argue against it because it has no substance for me to argue against it is a total fiction.

 

 

 

Anyway the point of my previous post was that there is no supporting evidence for this theory in the judgement mentioned.

Regards Peter

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This will never be resolved :|

 

It has been E.

 

Just that some are not acknowledging it , this has been tried on many occasions ,it never even gets into court because it is not a valid argument.People send there acceptance of termination letters to creditors and they put them in the bin because they know they are irrelevant rubbish, they do not even include them in their POcs.

 

You knolw i have some contacts in the legal proffession and iusually consult them if i am unsure about something, but on this i have not , i would be to embarrassed, it is such a ludicrous idea.

 

Peter

 

 

Peter

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the creditor, under a clause in the agreement- the consumer not being in breach- excercises his right to terminate the agreement............and you agree that this does not mean that he can demand immediate repayment of those sums not yet due - so the consumer carries on making monthly payments

 

without going on to any other tack......can you say which terms and conditions pertaining to the agreement- which the creditor has now terminated- remain in force?

 

if it is your case that all the terms and conditions remain in force- then what exaclty is it that the creditor has terminated?

Diddydicky,

In order to resolve the questions you raise, it is neccesary to know what kind of regulated agreement you are referring to.

For example, in the case of a credit card agreement, -in the example you give-

"under a clause in the agreement- the consumer not being in breach- excercises his right to terminate the agreement......."

Such a clause would be void, because it would be inconsistent with the provisions of CCA 1974 and it's associated Regulations. i.e. there is no provision in CCA for non-default termination of credit card agreements by the creditor, consequently the creditor, in a credit card example, would not be able to "exercise his right to terminate the agreement", as such a right would not be available to him under CCA.

 

On another point. All this talk of repudiation of the contract is quite irrelevant to discussion of credit card agreements, because it does not apply to them. That is to say, all questions related to termination and breach of the agreement can be fully dealt with within the provisions of CCA, which - so far as I am aware- does not use the word "repudiate" anywhere in the Act or the Regulations.

The ordinary consumer, who is intended to be protected by CCA, is not expected to understand that terminology, nor should he need to.

 

Regards.

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From Lacors:

 

In the case of Financings v Baldock, it was decided that the Waragowski measure of damages could only apply to a repudiatory breach. Because the debtor's breach (late payment) was not serious enough to be repudiatory, it was held that the creditor had exercised a choice to terminate and that they could only claim arrears. This would appear to have little application nowadays, as most hire purchase agreements now contain a clause stating that all breaches are repudiatory. However, in the light of the Unfair Terms in Consumer Contracts Regulations, such a clause may itself be an unfair term with no effect, and open to challenge. So Financings v Baldock and other similar judgments may yet find fresh relevance

 

Conrad Meehan, Consumer Protection Officer at Leicester City Council's Consumer Protection Service.

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Thankyou "white charger" for your star comment :wink:

PLEASE NOTE... I AM MOST SORRY BUT I HAVE VERY LIMITED AVAILABILITY AT THE MOMENT DUE TO EXTREME PRESSURE OF WORK - IF YOU REQUIRE URGENT HELP ON YOUR THREAD AND ARE GETTING NO RESPONSE PLEASE HIT THE TRIANGLE FOR SITE TEAM ASSISTANCE. ELSA XXX

 

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Hi

In the case of Financings v Baldock, it was decided that the Waragowski measure of damages could only apply to a repudiatory breach. Because the debtor's breach (late payment) was not serious enough to be repudiatory, it was held that the creditor had exercised a choice to terminate and that they could only claim arrears. This would appear to have little application nowadays, as most hire purchase agreements now contain a clause stating that all breaches are repudiatory. However, in the light of the Unfair Terms in Consumer Contracts Regulations, such a clause may itself be an unfair term with no effect, and open to challenge. So Financings v Baldock and other similar judgments may yet find fresh relevance

Yes thanks for this, it illustrates exactly what i was saying, this is indeed what happened in Woodchester the contractural term used to terminate was being used by the debtor to challenge the issue of if the breach was repudiatory or not. If not then as above losses could not be reclaimed only arrears.

In woodchester no ruling was made on this because the Statute ensured the default was treated as a repudiatory breach.

Of course you realise that this is a hire agrement and only applies because the liabilities under the agrement are future losses, not actualliabilities.

Peter

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Diddydicky,

In order to resolve the questions you raise, it is neccesary to know what kind of regulated agreement you are referring to.

For example, in the case of a credit card agreement, -in the example you give-

"under a clause in the agreement- the consumer not being in breach- excercises his right to terminate the agreement......."

Such a clause would be void, because it would be inconsistent with the provisions of CCA 1974 and it's associated Regulations. i.e. there is no provision in CCA for non-default termination of credit card agreements by the creditor, consequently the creditor, in a credit card example, would not be able to "exercise his right to terminate the agreement", as such a right would not be available to him under CCA.

 

On another point. All this talk of repudiation of the contract is quite irrelevant to discussion of credit card agreements, because it does not apply to them. That is to say, all questions related to termination and breach of the agreement can be fully dealt with within the provisions of CCA, which - so far as I am aware- does not use the word "repudiate" anywhere in the Act or the Regulations.

The ordinary consumer, who is intended to be protected by CCA, is not expected to understand that terminology, nor should he need to.

 

Regards.

 

have met this poster before

He is totally unreachable by any logical route i suggest you ignore. I intend to.

 

Peter

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Because the act will not let him he must serve a valid defaul notice

 

 

spot on peter..........the penny has finally dropped-- the fact of a debtor breaching the agreement in this way -not being deemed by parliament as an unlawful repudiation.hence the requirement for the creditor to give the debtor "another chance"- since if the debtor does remedy the breach as detailed in the DN- no loss to the creditor has occurred- nor did the debtors actions "go to the heart of the contract"

 

remember that the creditor holds all the aces.......and can simply increase the individuals interest rate- but more likely- as is normal in the credit industry- generally increase interest rates to cover any temporary losses incurred through the costs of chasing missed payments

 

ALL credit card companies work on the basis of factoring in bad debt- the credit card company loses NOTHING through bad debt- all the losses incurred are paid by every other customer- hence why credit card rates are 16-23% APR when bank LIBOR rates are under 1%

 

seems everybody (except you) including parliament and the authors of the credit act understand this principle-hence the way the act was drafted to allow for breaches by the debtor not to be regarded as an unlawful repudiation

 

the difference being that if the debtor does not remedy a valid DN only THEN does he ENVINCE AN INTENTION not to perform.

 

i see no point in flogging the horse any more - since the RSPCA will be on my back

 

you have your opinion ........... and around 90% of other forum users i suspect..have theirs

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Because the act will not let him he must serve a valid defaul notice

 

 

spot on peter..........the penny has finally dropped-- the fact of a debtor breaching the agreement in this way -not being deemed by parliament as an unlawful repudiation.hence the requirement for the creditor to give the debtor "another chance"- since if the debtor does remedy the breach as detailed in the DN- no loss to the creditor has occurred- nor did the debtors actions "go to the heart of the contract"

 

remember that the creditor holds all the aces.......and can simply increase the individuals interest rate- but more likely- as is normal in the credit industry- generally increase interest rates to cover any temporary losses incurred through the costs of chasing missed payments

 

ALL credit card companies work on the basis of factoring in bad debt- the credit card company loses NOTHING through bad debt- all the losses incurred are paid by every other customer- hence why credit card rates are 16-23% APR when bank LIBOR rates are under 1%

 

seems everybody (except you) including parliament and the authors of the credit act understand this principle-hence the way the act was drafted to allow for breaches by the debtor not to be regarded as an unlawful repudiation

 

the difference being that if the debtor does not remedy a valid DN only THEN does he ENVINCE AN INTENTION not to perform.

 

i see no point in flogging the horse any more - since the RSPCA will be on my back

 

you have your opinion ........... and around 90% of other forum users i suspect..have theirs

 

Hear hear.

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Because the act will not let him he must serve a valid defaul notice

 

 

spot on peter..........the penny has finally dropped-- the fact of a debtor breaching the agreement in this way -not being deemed by parliament as an unlawful repudiation.hence the requirement for the creditor to give the debtor "another chance"- since if the debtor does remedy the breach as detailed in the DN- no loss to the creditor has occurred- nor did the debtors actions "go to the heart of the contract"

 

remember that the creditor holds all the aces.......and can simply increase the individuals interest rate- but more likely- as is normal in the credit industry- generally increase interest rates to cover any temporary losses incurred through the costs of chasing missed payments

 

ALL credit card companies work on the basis of factoring in bad debt- the credit card company loses NOTHING through bad debt- all the losses incurred are paid by every other customer- hence why credit card rates are 16-23% APR when bank LIBOR rates are under 1%

 

seems everybody (except you) including parliament and the authors of the credit act understand this principle-hence the way the act was drafted to allow for breaches by the debtor not to be regarded as an unlawful repudiation

 

the difference being that if the debtor does not remedy a valid DN only THEN does he ENVINCE AN INTENTION not to perform.

 

i see no point in flogging the horse any more - since the RSPCA will be on my back

 

you have your opinion ........... and around 90% of other forum users i suspect..have theirs

 

 

 

Unfortunately 100% of the courts have their opinions and they coincide with mine.

In this regard anyway

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I Usually just ignore these rediculous tirades but i have a few minutes

 

Because the act will not let him he must serve a valid defaul notice

 

 

spot on peter..........the penny has finally dropped-- the fact of a debtor breaching the agreement in this way -not being deemed by parliament as an unlawful repudiation.hence the requirement for the creditor to give the debtor "another chance"- since if the debtor does remedy the breach as detailed in the DN- no loss to the creditor has occurred- nor did the debtors actions "go to the heart of the contract"

 

I think you are mixing quotations from differnt sourses here.

The repudiation by the debtor is simply not accepted if the notice is remedied so the repudiation is not complete, this is what the judge in brandon said anyhway.

remember that the creditor holds all the aces.......and can simply increase the individuals interest rate- but more likely- as is normal in the credit industry- generally increase interest rates to cover any temporary losses incurred through the costs of chasing missed payments

 

Well hardley news this bit is it

 

ALL credit card companies work on the basis of factoring in bad debt- the credit card company loses NOTHING through bad debt- all the losses incurred are paid by every other customer- hence why credit card rates are 16-23% APR when bank LIBOR rates are under 1%

 

Are you saying the banks make a profit therefore they are not entitled to their loans being repaid?

 

seems everybody (except you) including parliament and the authors of the credit act understand this principle-hence the way the act was drafted to allow for breaches by the debtor not to be regarded as an unlawful repudiation

 

the difference being that if the debtor does not remedy a valid DN only THEN does he ENVINCE AN INTENTION not to perform.

 

Yep just me and every court room in the country

 

Envince attention like that though what does it mean exactly in this context, hell in any context

 

 

i see no point in flogging the horse any more - since the RSPCA will be on my back

 

They may well be able to help i understand it is quite painless just a little prick

 

you have your opinion ........... and around 90% of other forum users i suspect..have theirs

 

Unfortunately 90% of forum users do not know and are subjected to your nonsense. and missinformation

 

Peter

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Please don't shout Peter, or you'll be sent to the naughty step

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PLEASE NOTE... I AM MOST SORRY BUT I HAVE VERY LIMITED AVAILABILITY AT THE MOMENT DUE TO EXTREME PRESSURE OF WORK - IF YOU REQUIRE URGENT HELP ON YOUR THREAD AND ARE GETTING NO RESPONSE PLEASE HIT THE TRIANGLE FOR SITE TEAM ASSISTANCE. ELSA XXX

 

Please check out my BLOG for the quick guide to debt threats - it has all the info & letter template links you need to get started on your journey of TAKING CONTROL. :roll:

 

All opinions are my own based on research. I am not legally qualified, if in doubt please consult a legal expert.

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I Usually just ignore these rediculous tirades but i have a few minutes

 

 

 

Unfortunately 90% of forum users do not know and are subjected to your nonsense. and missinformation

 

Peter

Peter,

I do not understand the meaning of the following comment made by you about the Brandon case:

 

The repudiation by the debtor is simply not accepted if the notice is remedied so the repudiation is not complete, this is what the judge in brandon said anyhway.

 

Perhaps, for the benefit of fellow caggers, you could clarify the point you are making.

As I understand the Brandon judgement, the judge said that the default notice was valid, and that Amex were entitled to give Brandons details to a credit reference agency, because he did in fact owe amex money, and that the late payment account charges were included in the terms of the agreement.

Apart from that, the Brandon case does not in any way relate to termination of credit card agreements in non-default cases. - which, as you know, is not provided for in CCA.

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