Agreement Enforceability

[Peterbard]

IS MY AGREEMENT ENFORCEABLE( Via section 127(3) CCA1974)

PRESCRIBED TERMS FOR THE PURPOSES OF SECTIONS 61(1)(0) AND 127(3) OF THE

CONSUMER CREDIT ACT 1974 Taken from sced.6(1983/1553) regulations

(If you just want to find out, skip the bits in between the stars it’s just some extra information)

 

**What do we mean by unenforceable?

In the Consumer Credit Act section 127 there is a provision for making an agreement unenforceable if it does not contain certain pieces of information.

Subsections 1,2,3,4 state which pieces of information these are, and everything mentioned there must be included within the body of the agreement, if one is missing the agreement is unenforceable.

 

How does unenforceable differ from enforceable with a court order only?

When an agreement is unenforceable it means that the court or the judge cannot make a ruling on it. The court cannot make it enforceable.

When an agreement is enforceable only by ruling of the court it means that the agreement can be stopped by the debtor but the court has the power to re-instate it and allow the credit to continue to enforce.**

 

The Pescribed Terms are these

 

A Amount of credit

A term stating the amount of credit

 

B Repayments

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-

(a) Number of repayments;

(b) Amount of repayments;

© Frequency and timing of repayments;

(d) Dates of repayments;

(e) 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.

 

C Rate of interest

A term stating the rate of interest to be applied to the credit issued under the agreement

D Credit limit

This may be a term or the manner in which it will be determined or that there is no credit limit.

--------------------------

 

Which of these applies to you depends on the type of agreement you have?

 

For a Running Account (credit card) agreement

 

BC and D Apply

 

For a Restricted Use Debtor Creditor Supplier

• Where the dealer is the supplier and the creditor is the one providing the finance.
  
• The money can only be used for the purpose it is given.
  
• There is no interest on the purchase (the cash price is the same as the total price)
  
• And there is no advance payment

A is applicable

 

For a fixed Sum Credit Agreement

A conventional credit agreement with none of the above restrictions

 

A and B apply

 

For a Hire Agreement

 

B is Applicable

 

This paper only covers section 127(3) of the Act agreements can also be unenforceable by contravention of sections 1 and4 this will be the subject of the next paper.

Please note that these Prescribed terms where not changed in any way by the 2004/1482 Ammendments although the form in which they appear on the agreement was. Subsection127(3) was repealed on the 6th of April 2007 so that unenforceability due to 127(3) will only apply to agreemens executed before that date.

[ian1969uk]

Hi Peter, wouldn't D apply to running account credit rather than A?

[Peterbard]

Hi Peter, wouldn't D apply to running account credit rather than A?

 

Thanks Ian nice to see someone is watching .

 

Best regards

Peter

[Josie8]

Great idea Peter there's so much confusion on the threads now

[BLADES65]

Fantastic post.

 

A clear layout of what we should be looking for.

 

Look forward to more.

 

Thanks Peter

[Laughing Boy]

Hi,

 

Great thread, would it also be possible at some point to start another thread to explain the correct procedure that creditors should have followed from Application to Executed Agreement (incl cancellation rights)?

[Peterbard]

HI Yes i am working on a post about cancellation rights for this thread it will include what creditors should supply in order to comply with section127(4).

And therefore have an impact on the enforceability of the agreement.

Best regards

Peter

[elsinore]

First rate job, Peter, well done.

 

Els

[dpick]

Hi peter could I just check this with you it will probably be of interest to others with less knowledge like me.

 

From your first post on this thread:

 

**What do we mean by unenforceable?

In the Consumer Credit Act section 127 there is a provision for making an agreement unenforceable if it does not contain certain pieces of information.

Subsections 1,2,3,4 state which pieces of information these are, and everything mentioned there must be included within the body of the agreement, if one is missing the agreement is unenforceable.

Does included within the body of the agreement mean on the same page/pages of the document or are these still enforceable if the pieces of information are within the Term and Conditions supplied on another document.

 

IE for my CCA I received copy of agreement from Feb 2000 and copy of T/C from June 2006 and if they later supply T/C from Feb 2000 do they have to be able to show a link between these documents.

 

Thanks in advance dpick:oops:

[Jeff2000]

Hi,

 

 

Brilliant thread! Excellent idea Peter! Well done!

 

 

Regards, Jeff.

[Peterbard]

Hi peter could I just check this with you it will probably be of interest to others with less knowledge like me.

 

From your first post on this thread:

 

**What do we mean by unenforceable?

In the Consumer Credit Act section 127 there is a provision for making an agreement unenforceable if it does not contain certain pieces of information.

Subsections 1,2,3,4 state which pieces of information these are, and everything mentioned there must be included within the body of the agreement, if one is missing the agreement is unenforceable.

 

Does included within the body of the agreement mean on the same page/pages of the document or are these still enforceable if the pieces of information are within the Term and Conditions supplied on another document.

 

IE for my CCA I received copy of agreement from Feb 2000 and copy of T/C from June 2006 and if they later supply T/C from Feb 2000 do they have to be able to show a link between these documents.

 

Thanks in advance dpick:oops:

 

HI

this is quote from the 1983/1553 regs i hope it answers your question.

(4) Subject to paragraph (5) below, the information about financial and

related particulars set out in paragraphs 3 to 19 of Schedule I to these

Regulations, and also the statements of the protection and remedies available

to debtors under the Act specified in Forms 5 to 10 \of Part I of Schedule 2, shall be shown together as a whole in documents embodying regulated consumer credit agreements and not interspersed with other information apart from subtotals of total amounts and cross-references to terms of the agreement:

The form of Prescribed Terms are all contained within sched 1 3-13

 

Regards

Peter

[Peterbard]

Hi,

 

Great thread, would it also be possible at some point to start another thread to explain the correct procedure that creditors should have followed from Application to Executed Agreement (incl cancellation rights)?

 

Hi

Forgot to say welcome to CAG

 

Best reards

Peter

[Peterbard]

Hi

I intend this to be user friendly to the new subscribers amongst us so i am going to go over a few of the points raised in the last few postings. Hopefully it wil help some understand what is going on the rest of you smart alecks can talk amongst youselves.

 

Firstly the diffeence between an executed agreement and a properly executed agreement.

An agreement can be said to be executed upon the signatures of both the creditor and the debtor.

In order to comply with the Consumer credit Act 1974 however the agreement must be properly executed.

This means that it must contain all the terms like how much interest you are being charged and how long you have to cancell before the agreemnt becomes binding.

Not only must this information (Terms )be in the agreemen.They must be in the correct place (Form). The Terms and form are refered to in section 60 of the Act and are listed in a seperate document called a statutory instrumen each one of these has it's own number this particular one is 1983/1553.

 

Regards

Peter

[stadium_arcadium]

This is an extremely helpful thread and will assist many members, thank you Peter:)

[tifo]

excellent idea.

 

this will be helpful to many people.

[midge61]

HI

Just subscribing

[angry cat]

Welcome Back, Peter!

 

Love AC

[hellhasnofury]

Hello Peter, I am sorry to hear that you have not been 100% and glad that you now are feeling better:D

 

Your a credit to the site with the excellent work you do. Always there to help others.

 

Cant wait for the bit about cancellation rights:D

[vinegarvera]

just subbing, brilliant thread answers a lot of my questions!!

[rich2568]

Not only must this information (Terms )be in the agreemen.They must be in the correct place (Form).

 

Peter- what about Egg`s agreement whereby the Cancellation rights aren`t included on the agreement (double sided) but the clause `You have a right to settle this agreement at any time by giving notice in writing and paying off all amounts payable under the agreement.`

 

For me there are no` Cancellation Rights` -which I believe should be a heading on its own- I`m sure you will clarify for me?

[ian1969uk]

The Egg agreements don't need cancellation rights as there was no face to face discussion between creditor and debtor prior to the signing of the agreement. Therefore, they are non-cancellable agreements.

[rich2568]

The Egg agreements don't need cancellation rights as there was no face to face discussion between creditor and debtor prior to the signing of the agreement. Therefore, they are non-cancellable agreements.

 

Didn`t know there was such a thing as non- cancellable agreements if you don`t come face to face. What about if you are signed up to a card in the branch?

[ian1969uk]

Best to read these to see the difference:

 

OFT guide to cancellable agreements

 

OFT guide to non-cancellable agreements

[surprise]

Peter

Glad to see your back and fighting fit with your dislexic keyboard!

best wishes.

[rich2568]

Ian

 

Best to read these to see the difference:

 

OFT guide to cancellable agreements

 

OFT guide to non-cancellable agreements

 

Are these law then or just guidance from the OFT?