Businesses And Consumers Law News

Consumer protection through Statute Law

Wed, 2 Feb 2011 00:00:00 0000

Statutory provisions have been put in place to protect consumers in their day to day dealings with sellers. We look at the main provisions in turn.

The Sale of Goods Act 1979 (SOGA)

The sale and purchase of goods carried out between two parties is probably the most common type of contract entered into everyday. SOGA governs the terms upon which the parties contract to and implies those terms which the parties have not considered. It protects both the consumer and the seller (who has the right to retain the goods for example, if the purchaser defaults on a payment or becomes insolvent.) Therefore, the SOGA gives both parties a degree of certainty and security.

Sections 12 -15 are implied into contracts and the seller is obliged to adhere to these rules. These conditions allow the injured party to the contract to reject the goods within a reasonable time if the conditions are breached. If the goods are not rejected within reasonable time then the conditions are held as warranties and the injured party is able to seek damages.

The Supply of Goods and Services Act 1982 (SGSA)

The supplying of goods and services is governed by the 1982 Act. It gives consumers protection if they have been supplied with faulty goods or been offered a service which has been carried out without reasonable care and skill.

The significance of SGSA is that it imposes conditions that require 'reasonableness'. It obligates the seller, when acting in the course of a business to, carry out that service with reasonable care and skill; within a reasonable time and to charge a reasonable amount for the service.

The Unfair Contract Terms Act 1977 (UCTA)

UCTA sets out the provisions determining how reasonable a clause is that has been interpreted into a contract. UCTA does not apply to every type of contract. The types of contracts UCTA does not apply to are set out in Schedule 1, for an example, insurance contracts.

UCTA does not allow parties to rely on a clause which seeks to exclude liability for death or personal injury; however, it does allow parties to exclude liability for loss arising out of negligence, as long as the test of reasonableness is satisfied.

The courts generally consider that a business is more powerful therefore it is in a better position to protect itself then a consumer is. The party relying on the clause will have to satisfy that the clause incorporated into the contract is a reasonable one and there are tests put into place to determine this under Schedule 2 of UCTA. And had also been demonstrated through case law; see George v Finney Lock Seeds.

This is just a brief summary of the protection available to consumers. If you have any concerns of your own then it advisable to seek legal advice.

Consumer loss through poor financial advice

Thu, 27 Jan 2011 00:00:00 0000

Just a week after Barclays were hit with this they decided to stop offering financial advice. It has now put the jobs of 1,000 staff at risk and has become the first bank on the high street to stop offering financial advice.

Consumer Credit Act 1974

Sat, 1 Jan 2011 00:00:00 0000

Consumer Credit Act 1974 explained The consumer credit Act 1974 gives people who enter into credit agreements protection in the following ways (as long as the credit was not more than £25,000). Your rights If you have signed a credit agreement and you want to cancel it you can do so within a certain period of time as long as you did not make the deal over the phone and you did not sign the agreement at the seller's shop, office or workplace, (this can include an exhibition stand). Therefore if you signed the agreement in your own home you will be able to cancel after you have signed the agreement. The seller is supposed to send you a written notice telling you how you can cancel and how long you have to cancel. You must cancel by writing to the address given on the notice. You will be entitled to the return of any deposit paid or goods traded in part-exchange if you cancel the agreement in time. What the creditor must do? A creditor, (the one who provides credit) cannot demand early payment, try to get the goods back or end the agreement without first serving a written notice on you giving you 7 days notice of their intention to take such action, (Default Notice). The notice has to be written in a particular way. If you receive a notice you should get legal advice to check that it is a proper notice. The notice should contain the following: Â·1. The notice should say how much should be paid to bring payments up to date. Â·2. When payments should be made. Â·3. What will happen if payments are not made. Â·4. How the agreement can be brought to an end and that if payments are made the agreement will not be brought to an end.

Remedies for Breach of Contract

Fri, 21 Jan 2011 00:00:00 0000

A breach of contract occurs where a party to a contract fails to fulfill the obligations in the terms incorporated into the contract. This can occur in many situations such as the failure to supply goods or perform a service as agreed.

Remedies available for breach of contract are as follows:

Damages

The main remedy available to the innocent party in a breach of contract claim is damages. This is a monetary sum fixed by the court to compensate the injured party. It is the process in which damages are assessed and is designed to put the injured party in the same position they would have been in if the contract had been performed.

There a two types of damages:

(1) Liquidated damages; and

(2) unliquidated damages.

Liquated damages

A liquidated damage is described as 'monetary compensation for a loss, detriment or injury to a person's rights or property awarded by a court judgment or by a contract stipulation regarding breach of contract. '

Usually parties to a contract may agree to incorporate a set amount that would be paid in the event of a breach of contract; this clause is referred to as a liquidated damages clause and is enforceable by law. Under these circumstances the courts are not required to asses or calculate losses sustained by the party.

Unliquidated damages

Unliquidated damages are assessed by the courts in order to recover any loss incurred by the claimant in relation to harm or damages caused to them or their property arising from breach of contract. The remedy is not designed to put the claimant in a better position than they would have been if the breach had not occurred.

In order to recover losses arising out of different situations there are three ways in which unliquidated damages are calculated.

Expectation loss - the innocent party seeks to recover profits which he expected to receive had the contract been performed; he is entitled to damages for loss of bargain.

Reliance - compensates the innocent party for expenses sustained and losses incurred in reliance on the contract.

Restitution (defendant must have unjustly enriched at the expense of the claimant) - seeks to reverse that unjust enrichment, by restoring the relevant benefit of enrichment to the claimant.

Other remedies are available to a claimant if damages are not an adequate means of compensating them. These are known as equitable remedies:

(1) Specific performance; and

(2) Injunction.

Specific Performance

Specific performance is the remedy which allows the courts to order the party in breach of the contract to perform their contractual obligations. This is used by courts when no other remedy such as one that holds monetary value will adequately compensate the other party.

Injunction

An injunction like specific performance is a form of remedy which is granted at the discretion of the courts if damages will not be adequate in compensating the claimant in relation to the damage caused. An injunction imposes an obligation on the party in breach of the contract to refrain from doing something.

Your Rights To Buying Goods Abroad

Mon, 17 Jan 2011 00:00:00 0000

The rights explained below only apply to goods bought from EU based sellers only.

The growing use of the internet has enabled consumers to do internet shopping from the comfort of their own homes.This relates to the increase in consumers making trips abroad to shop. Although it has become so easy to shop online, one thing that is rarely considered is the rights that we have as consumers when making those purchases.

Generally, across the EU you will find that your rights as a consumer are the same throughout since the law is derived from EU directives. The European Small Claims court procedure is available across 26 member states in the EU. This procedure enables consumers to enforce their rights and take legal action. This procedure is known to save time and cost and is already well known and used by many consumers. The procedure allows consumers to make monetary and non monetary claims. Claimants can only pursue sums of up to 2,000 Euros.

When purchasing goods and services from abroad you are covered by the rights of the sellerâ€™s country as well as the Sale of Goods Act 1979 ("SOGA") and the Sale of Goods and Services Act 1982 in the UK. But what do you do when you receive faulty goods?

When buying goods they must be in accordance to the Sale of Goods Act 1979:

Section 13 - As described- fit the description given by the seller

Section 14(2) -The goods must be of satisfactory quality; and

Section 14(3) - The goods must be fit for purpose.

When buying online, as well as your rights under SOGA you also have the right to:

Obtain information and specification of the goods and services offered before you buy them.

Written confirmation of the information after you have made your purchase.

A cooling off period of 7 working days in order for you to cancel your order and obtain a full refund if you do not wish to go ahead with the purchase.

A full refund within 30 days if the retailer has failed to deliver the goods or services on the delivery date you both agreed on. In the case a delivery date was not agreed you can obtain a full refund if the goods were not delivered within 30 days of informing the retailer that time is of the essence.

Under SOGA sections 13, 14 and 15 imply strict conditions on the sale of goods and In the event you receive faulty goods, you are entitled to return the item and get your money back. Under these circumstances it is the seller's responsibility to cover the cost of returning items.

Assessing the reasonableness of a contract term

Wed, 12 Jan 2011 00:00:00 0000

People know that they ought to read the small print before signing anything, even if they are entering into simple contracts, but how many of us really do this? This is particularly true on business transactions where we are ordering goods or services from another business. These transactions generally take place over the internet or telephone and then the terms and conditions are printed off and signed.

Requirement of reasonableness

'...a fair and reasonable [term]...having regard to the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made' s11 Unfair Contract Terms Act 1977 ("UCTA")

UCTA states that contract terms have to be "reasonableâ€. The regulation provides criteria for determining which terms may be unfair and the effect is that those terms found to be unreasonable will be held as void.

In assessing the reasonableness of a term incorporated into a contract the following has to be taken into account:

- The strength of the bargaining positions of the parties relative to each other.

- Whether the customer received an inducement to agree to the term, or in accepting it had an opportunity of entering into a similar contract with other persons, but without having to accept a similar term.

- Whether the goods or services were sold or supplied to the special order of the customer.

- The extent to which the seller or supplier has dealt fairly and equitably with the customer.

The courts assume that businesses should be in a better position to protect themselves than consumers dealing with a business. Therefore where the parties were of equal bargaining power the courts are inclined to accept exclusion clauses than if it was an agreement made between a business and a consumer.

The reasonableness of exclusion clauses are demonstrated through case law. In particular, George Mitchell v Finney Lock Seeds where seeds were sold between businesses, but an exclusion clause restricted any claim for loss to the cost of the seed not the potential harvest which would have been far greater. The House of Lords held the clause to be unreasonable. The farmers were not able to identify the quality of the seed and incurred a great loss. It was seen unreasonable as the seller could have obtained insurance at a cheap price.

People assume that businesses are of equal bargaining strength and unless you can demonstrate that, this is not how it stands. If this is not the case, then you will not be able to rely on terms being unreasonable if later on you decide that you do not want to be bound by them.

Statue and Common Law protection – Unfair Consumer Contracts.

Wed, 22 Dec 2010 00:00:00 0000

Whether it is for a mobile contract or booking a holiday, everyday consumers are signing contracts and entering into agreements. Companies generally have standard terms that they incorporate into their contracts normally in 'small print' and these enable the company to have a set contract for all customers. These are called Standard terms. Standard terms would generally outline the contract, the price and the terms that legally have to be incorporated into the contract. These terms must be fair.

In order to establish whether a term in a contract is fair or unfair the consumers can rely on common law protection, below are 2 examples:

Olley v Marlborough Court [1949] 1 K.B. 532

The claimant booked into a hotel. In the hotel room on the back of the door a notice sought to exclude liability of the hotel proprietors for any lost, stolen or damaged property. The claimant had her fur coat stolen.

Held: The notice was ineffective. The contract had already been made by the time the claimant had seen the notice. It did not therefore form part of the contract.

Curtis v Chemical Cleaning [1951] 1 KB 805 Court of Appeal

The claimant took her wedding dress to the cleaners. She was asked to sign a form. She asked the assistant what she was signing and the assistant told her that it excluded liability for any damage to the beads. The form in fact contained a clause excluding all liability for any damage howsoever caused. The dress was returned badly stained.

Held: The assistant had misrepresented the effect of the clause and therefore could not rely on the clause in the form even though the claimant had signed it.

Under the Unfair Contract Terms Act 1977 ('UCTA') statue law offers protection from unfair consumer contracts. If a company tries to exclude liability from by incorporating an unfair term into a contract, the contract is rendered ineffective and it would stand as if it never existed.

Below are some examples which would be unfair in a contract (the list is non-exhaustive):

- Exclusion of liability for death or personal injury.

- Restricting your rights or remedies.

- Binding you to hidden terms or variation clauses.

- Unequal cancellation rights

- Restricting the level and type of liability

- Allowing termination of the contract without any notice.

Thus unfair terms in contracts are against the law and failure to incorporate fair terms in a contract can render your contract void. In deciding whether or not a contract has unfair terms you should seek legal advice.

Unfair relationships

Mon, 13 Dec 2010 00:00:00 0000

Extortionate credit' ss. 137-140 of the Consumer Credit Act 1974 has been repealed and replaced by the idea of the 'unfair relationship' test as found in ss. 19-22 of the Consumer Credit Act 2006. It allows borrowers to challenge loans and credit agreements that create an 'unfair relationship'.

The test which is now applied is that of 'unfair relationships' rather than 'extortionate credit bargains'. The unfair relationships test considers whether the relationship between the lender and the borrower arising out of an agreement is unfair because of;

-        The terms of the agreement; or

-        the way in which the lender operates the agreement; or

-        any other thing done or not done by or on behalf of the lender before the agreement is made.

The burden of proof lies on the lender to prove whether or not they employed an unfair relationship.

Blemain Finance v Peter Bentley

In this case, the meaning of unfair relationships under Section 140A of the Consumer Credit Act (CCA) 1974 (This section was added into the 1974 Act by the Consumer Credit Act 2006, which repealed sections 137-140, extortionate credit bargains) was used to allege that a loan contract with Blemain Finance was an unfair one. Bentley successfully argued that Blemain had 'loaned the money to him irresponsibly and that the agreement took advantage of his naivety, vulnerability and desperation'.

The high court order was made by Judge Milwyn Jarman. The parties agreed that in exchange of Mr. Bentley withdrawing his argument and not pursuing legal action in relation to the claim that there had been an unfair relationship under CCA, the finance firm agreed;

-        to re-write the secured loan account,

-        to cut the repayments,

-        not to levy any interest, charges or legal costs whatsoever.

Blemain's repossession claim was dismissed and they cannot enforce repayment of the loan for the next five years.

The Sale of Goods Act 1979

Fri, 26 Nov 2010 00:00:00 0000

The Sale of Goods Act 1979 ("SOGA") is implied into contracts for the sale of goods.

The main sections of the Sale of Goods Act 1979 are:

Sale by description- s13

'Satisfactory quality'- s14(2)

'fitness for purpose'- ss 14(2), 14(3)

Sale by sample - s15

S.13 'Sale by description'

s.13 (1) provides that 'where there is a contract for the sale of goods by description, there is an implied term that the goods will correspond with the description.' The words used must be words of description rather than words identifying the goods.

If the buyer inspects the goods before he purchases them then S.13 cannot be relied upon. This is apparent in Harlington & Leinster Enterprises v Christopher Hull Fine Art [1991] 1 QB 564 where the buyers purchased a painting that turned out to be a fake could not rely on S.13 as it had already been inspected by their agents prior to the purchase.

On the other hand, the buyer was entitled to rejects the goods he purchased as it did not correspond with the description of how the goods would be packed Re Moore v Landauer & Co [1921] 2 KB 519.

S14 (2) 'Satisfactory quality'

S14 (2) states that 'where the seller sells goods in the course of a business there is an implied term that the goods supplied under the contract are of satisfactory quality.'

In Thain v Anniesland trade centre [1997] SCLR 991, a six year old car was bought for £2,995, it was held to be of satisfactory quality even though the gearbox failed two weeks after the purchase of the car.

On the other hand contamination of carbon dioxide gas, supplied by making soft drinks was held to make the gas of unsatisfactory quality for drinks manufacturing in Britvic Soft Drinks v Messer UK Ltd [2002] EWCA Civ 548.

S14 (3) 'Fit for purpose'

'If the buyer expressly or impliedly makes his purpose for the goods known to the seller, then the seller has an obligation to ensure that the products or services are fit for its purpose.'

In Bolan v Friern Hospital [1957] 1 WLR 583 it was held that a Supplier's liability depends on proving that they had failed to exercise the reasonable care and skill required by an ordinarily competent member of their trade profession.

S15 Sale by sample.

S15 implies a term where goods are bought in bulk and the buyer has tested or sampled a small number of those goods, the seller has to ensure that every item in the bulk corresponds with the quality of the sample tested in that bulk.

In Godley v Perry [1960] 1 WLR 9 The goods were held not to comply with the sample in breach of S15 as there had been reasonable examination of the sample which had not shown up any defects. However a product bought by a customer broke and injured the child using it.

Finally, consumers may seek protection through statute law (terms incorporated expressly or impliedly) and common law. This article has highlighted some of the rights and obligations under the contract and under the general law.

Buying goods and Consumer Rights

Thu, 25 Nov 2010 00:00:00 0000

UK Consumer law is a vast abyss of laws and regulations that affect us all in our daily lives. And with the forthcoming festive season fast approaching, millions of goods and services will be bought in shops, through mail order, online and from door to door traders. This article gives a brief but essential guide to the main rules that apply to every purchase made.

Every time you buy an item, certain rights will be implied by the Sales of Goods Act (as amended) 1979 ("Act").

Under the Act, goods bought must:

-        Fit the description given;

-        Be of satisfactory quality; and

-        Be fit for purpose.

1.        Fit the description given

The product should fit the description given for it. Any description given, such as the packaging and labelling, must be clear and honest.

For example, if you buy a jacket that says it is '100% Waterproof' then you shouldn't be soaked through when you're caught in a thunderstorm. And if you buy a dining table that says it's 100% solid pine, you shouldn't then find it is pine laminate.

2.        Be of satisfactory quality

Consumers have the right for the goods bought to be safe, work properly, and to be free from defects. This includes a right not to be put at risk from something bought, and whatever the function of the product, it must perform that function safely.

For example if you buy a new washing machine which continually floods your kitchen, it might not be safe, and could be putting your health and safety at risk. And, if you buy an item of clothing and it shrinks after one wash, even though you have followed the manufacturer's instructions you could argue that it has a defect and that you expect to wear it more than once.

3.        Be fit for purpose

Any goods that are sold to you must be capable of doing what they're meant for.

For example, if you buy a golf club and it bends in half when you hit a ball, then it could be said that it is not fit for the purpose you bought it for, since clearly, a golf club should be made to hit a golf ball. And if you buy a gadget to perform a specific task, and discover that it can't perform that task, then it isn't fit for that purpose you identified.

Other points to consider

Purchasing through different mediums

There are lots of different ways to buy goods and services - at a shop, directly from a seller in your home, or through an online website.

It is important to note that different rights will exist in each environment, which are as follows:

Shop purchases: if goods are faulty it is the retailer's responsibility to sort the problem out. This is in addition to any warranty or guarantee that the manufacturer provides.

Buying at home directly from a Seller: This is where a trader visits your home to sell you something. Here, you generally have a 'cooling off' period of 7 days after the contract is made, during which an order can be cancelled without any reason and a full refund must be given.

Online: If you buy goods on the internet you generally have a 'cooling off' period of 7 working days, starting the day after receipt of the goods, during which an order can be cancelled without any reason and a full refund must be given.

Credit card purchases

Any goods bought for over £100 using a credit card, will be protected by the Consumer Credit Act 1974, which states that the credit card company is equally liable. Therefore, should a problem arise, you can claim either from the trader or from the credit card company. In practice, if you have a problem with the goods, you can contact the credit card company and they can help sort the problem for you.

Store Policies

Whatever the store policy says, it will not detract from the consumers' statutory rights discussed above. Unfortunately, many shoppers are unaware of this and fail to exert the rights given to them by UK law. Most shops (and receipts issued by them) usually display the wording 'This does not affect your statutory rights', which means that despite the store policy, shoppers still have the rights given to them by consumer law, and where a conflict arises, then the consumer law will prevail.

Further Information and Help

For more information about your consumer rights, visit www.consumerdirect.gov.uk

If you have any consumer issues, then please get in touch with our Consumer Law Department, who will be happy to help and assist.

By Inam Ali

Consumer Credit Loan Agreements

Thu, 28 Oct 2010 00:00:00 0000

This article will take a look at the instances in which a court may, at its discretion declare that a regulated consumer credit agreement is not enforceable. Please note that section 127(3) of the Act has been repealed by the Consumer Credit Act 2006, therefore agreements entered into on or after 6 April 2007 cannot be held to be, to coin the words of Lord Diplock: 'irredeemably unenforceable'.

WHAT IS THE STATUS OF THE AGREEMENT?

It is common sense that one should assess whether the agreement has been properly executed before considering appling for a declaration of unenforceability. The first question is whether the agreement as signed (or not as the case may be) by both parties. If you do not have a copy you can instructed us to formally serve your lender with a information request under the Consumer Credit Act 1974 (CCA).

"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

(c) 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."

In terms of section 61(1)(a) of the Act and section 127 and schedule 6 to the Consumer Credit (Agreements) Regulations 1983 ('the Regulations'). The Regulations set out the prescribed terms which, as a minimum, must be present under a regulated agreement.

WHAT SHALL I DO IF THE AGREEMENT IS NOT PROERLY EXECUTED?

Section 142(1)(b) of the CCA which entitles the court to declare that it will not entertain an order for enforcement of the regulated agreement.

Also section 127(3) as it was, prevented the court from making an enforcement order under section 65 of the Act where the requirements of section 61(1)(a) have not been complied with unless a document whether or not in the prescribed form and complying with the regulations itself containing all the prescribed terms of the agreement is signed by both parties to the same.

By Paul Bicknell

Office of Fair Trading to Merge with Competition Commission

Mon, 18 Oct 2010 00:00:00 0000

The Office of Fair Trading (OFT) is to be merged with the Competition Commission (CC) in a move which the Government said would improve efficiency and increase transparency. The new body will act as the sole authority for competition and market authority matters, with the OFT's consumer and enforcement functions passing to local authorities to be incorporated as part of trading standards.

The OFT has traditionally carried out antitrust investigations and merger enquiries, while the Commission has given further consideration to the preliminary findings of the OFT to ensure competition is not stifled. The Government hopes that duplication between the two will be cut and that the time taken to carry out merger reviews and market investigations will be reduced.

Whilst the proposal has been broadly welcomed by business leaders, there is some concern as to whether trading standards will be able to adequately deal with nationwide issues, such as fraud, at a local level. The greatest challenge the combined body will face will be to ensure that it is able to carry out investigations in the same thorough way and to the same degree as under the OFT and CC can separately. Questions have also been raised as to how the two bodies will be integrated, with the OFT presently being structured like a company while the Commission is more akin to an enquiry with a presiding chairman.

The general consensus, however, is that a single competition and markets authority will be better placed to deliver a better service for consumers and greater consistency for businesses.

Widespread debt management industry problems addressed by the Office of Fair Trading.

Fri, 15 Oct 2010 00:00:00 0000

The Office of Fair Trading (OFT) have recently completed a detailed review of the debt management sector and found widespread problems in 129 firms.

The review included an examination of company websites, visits by Trading Standards Officers and anonymous shopping trips.

The result showed that there is not enough awareness of the Financial Ombudsman Service rules in the industry for dealing with consumer complaints and that debt management company employees are incompetent and provide poor advice on information which insufficient.

The main area of non compliance with the OFT's Debt Management Guidance is with misleading advertising. Debt management companies are falsely advertising debt management services as being free when in fact customers are being charged.

The debt management companies are providing these services to consumers who are in serious financial distress, desperate for help and vulnerable. The fee charging debt management companies are providing the same services (including negotiating settlements with creditors, Individual Voluntary Arrangements etc), next to the same free government-funded services.

The OFT stated they will begin licensing action against debt management firms who face losing their consumer credit licences if they do not address identified concerns and comply with the OFT's Debt Management Guidance. These firms will need to supply audited evidence in the next 3 months that they have addressed these identified problems.

The OFT report provides a detailed plan for improving practice standards in the sector. Debt management companies who do not implement these new plans will face serious consequences including having their licences revoked.

Since April 2008 on 37 occasions the OFT have shut down websites, addressed issues of cold-calling, intervened where companies falsely advertise as charities etc, and are working with the Trade Standards to prevent debt sale scams.

By Owen Ross

Proposed Directive May Inadvertently Weaken Consumer Rights

Thu, 14 Oct 2010 00:00:00 0000

A proposed EU Directive may inadvertently erode consumer rights in some states rather than strengthening them, according to the European Parliament's Committee on Economic and Monetary Affairs. The EU wants to implement full harmonisation of consumer rights law across the European Union, meaning that whilst consumer rights will be strengthened in some states, they will invariably be weakened in others.

The proposed Directive seeks to limit a guarantee period to just two years, which is shorter than the guarantee period under the domestic law of several Member States, and to impose EU-wide rules governing unfair contract terms. MEPs have again highlighted the strong protection which currently exists under the domestic law of several states and that this stands to be undermined by the introduction of Europe-wide rules.

A previous draft of the Directive including proposals governing the right to reject faulty goods was also objected to by MEPs and the latest objections highlight the problems associated with harmonising the law across the EU. EU Commissioner Viviane Reding stated earlier this year that full harmonisation of consumer rights law was not feasible.

Unenforceable loans

Fri, 24 Sep 2010 00:00:00 0000

This article takes a look at the instances in which a court could declare that an agreement is unenforceable.

The reader must note that section 127(3) of the Act has been repealed by the Consumer Credit Act 2006, therefore agreements entered into on or after 6 April 2007 cannot be held to be, to coin the words of Lord Diplock: 'irredeemably unenforceable'.

IS THE AGREEMENT IMPROPERLY EXECUTED?

It is important to assess whether your agreement is properly executed before considering applying for a declaration that tha agreement is unenforceable.

The first issue of unenforceability is the agreement itself. The question is whether the agreement is actually the agreement as signed (or not as the case may be) by both parties. If you do not have a copy you can instructed us to formally serve your lender with a information request under the Consumer Credit Act 1974 (CCA).

Section 61(1) reads: "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

(c) 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".

In terms of section 61(1)(a) of the Act and section 127 and schedule 6 to the Consumer Credit (Agreements) Regulations 1983 ('the Regulations'). The Regulations set out the prescribed terms which, as a minimum, must be present under a regulated agreement.

CAUSE OF ACTION

Section 142(1)(b) of the CCA which entitles the court to declare that it will not entertain an order for enforcement of the regulated agreement.

Also section 127(3) as it was, prevented the court from making an enforcement order under section 65 of the Act where the requirements of section 61(1)(a) have not been complied with unless a document whether or not in the prescribed form and complying with the regulations itself containing all the prescribed terms of the agreement is signed by both parties to the same.

By Paul Bicknell

Consumer rights before entering into credit agreements

Tue, 27 Jul 2010 00:00:00 0000

Antecedent negotiations

Prior to making the agreement, negotiations by the sales person is deemed to be made as agent to the lender, it is therefore possible that these negotiations can move on to and form some of the terms to the eventual agreement.

Though as a matter of evidence the consumer or lender seeking to rely on these negotiations may struggle to prove that these negotiations took place.

A clear attendance note should be made of all communications between the parties.

Right to withdraw

Section 57 of the Consumer Credit Act 1974 allows a party to withdraw by giving notice in writing or orally. This must be done before entering into the agreement, in other words section 57 does not allow a consumer to withdraw from an agreement and therefore their obligations under it after the agreement has been executed.

By Paul Bicknell

Downloading music track is not a performance but a stream is US Court rules

Sun, 3 Oct 2010 00:00:00 0000

Yahoo and Real conceded that they owed monies in respect of licensing revenues when users made copies when they downloaded music tracks. However Real and Yahoo sought to dispute ASCAP's claim that downloading fell within the definition of a performance under US copyright law.

The court found that "...we turn to section 101 of the Copyright Act, which states that to perform a work means to recite, render, play, dance, or act it, either directly or by means of any device or process...a download plainly is neither a dance nor an act. Thus, we must determine whether a download of a musical work falls within the meaning of the terms recite, render, or play."

The court concluded that: "the downloads at issue in this appeal are not musical performances that are contemporaneous perceived by the listener...they are simply transfers of electronic files containing digital copies from an on-line server to a local hard drive. The downloaded songs are not performed in any perceptible manner during the transfers; the user must take some further action to play the songs after they are downloaded."

The court went to on to draw a distinction between a download and a stream finding that: "...stream transmissions, which all parties agree constitute public performances, illustrate why a download is not a public performance. A stream is an electronic transmission that renders the musical work audible as it is received by the client-computer's temporary memory. This transmission, like a television or radio broadcast, is a performance because there is a playing of the song that is perceived simultaneously with the transmission".

This clarification draws an importance distinction between what constitutes a performance under section 101 of the Copyright Act in the context of online peer to peer file sharing, with an increasing volume of hand held mediums being available to consumers at a relatively cheap price on to which users can download or stream as the case maybe users should be aware that streaming will constitute a performance within section 101.

By Paul Bicknell. Paul is a trainee solicitor who specializes in intellectual property litigation.

Payment protection insurance what's it for

Thu, 4 Feb 2010 00:00:00 0000

The purpose of payment protection insurance (PPI) is to cover your repayments owed in relation to your credit card for example, should you be unable to meet the repayments in the event of injury or illness.

It's always advisable to read the policy so that you fully understand the implications of this insurance and the amount (on top of your repayments) which you will have to pay.

If you are unclear as to the meaning or construction of certain terms, you should ask the sales person and do not allow yourself to be forced into taking out the PPI policy.

By Paul Bicknell

Purchased faulty goods or services using a credit card

Wed, 20 Jan 2010 00:00:00 0000

Section 75 of the Consumer Credit Act 1974 allows the consumer to bring an action against the creditor as well as against the supplier of the goods or services. Both the creditor and the supplier are jointly and severally liable.

By section 75(2) creditor "shall be entitled to be indemnified by the supplier for loss suffered by the creditor in satisfying his liability, including costs reasonably incurred by him in defending proceedings instituted by the debtor."

The application of section 75 is restricted in that the goods or services must have cost from £100 to £30,000.