Cancellation charges of a deceased

Mr_Lawnmower

!!!!!! wrote: »

As an aside, I wonder why people think that companies should write off debts on death. Things are getting to the point where people seem to consider it a right to have the debt written off.

I agree.


There is rightly a lot on these forums about debt write offs, but this mostly relates to debt arising from regulated financial products, such as providing credit without making proper affordability checks. Any lender knows they will not get full recovery of all sums owed and will structure their business accordingly. If a regulated credit provider makes a bad lending decision, they should have to accept the consequences.


To my mind, the situation is rather different when it comes to service contracts. Whilst some bad debts are expected, service contracts are not credit products in the regulated consumer credit sense. If the providers start making substantial losses from being forced to write off debts, they will pass these losses on in the form of increased customer bills.

Were service contracts to fall automatically on death, the situation would be open to abuse. Someone who was terminally ill could take out as many expensive mobile phone contracts as they could obtain, selling on the handsets and knowing that the contracts under which the provider sought to recover the handset subsidy over time would fall on their death. The law would then be powerless to provide a remedy, as contract law would have nothing to offer and recovery via the proceeds of crime route if the situation amounted to fraud would be impossible, as you can't prosecute a dead person.



In the original poster's case, I think it is only reasonable that the insurance aspect is explored first. If an insurer will pay out for outstanding utility bills following the fire, a claim should be made and Zen are paid off in full. It might be that the insurer will deal directly with Zen on the executor's behalf.

If it is established there is no insurance that will cover the bill, I would approach Zen again to seek a discretionary gesture. It is laudable to want to preserve as much as possible of the estate for the charitable beneficiaries, but there is money in the estate to cover the outstanding liability. Nobody has the right to force Zen to make what is, in effect, a charitable donation on behalf of their shareholders and customers.

I can't speak for Zen, but they might have a policy of making discretionary gestures on death only in the event of survivor hardship or the estate being so small that it might struggle to cover funeral expenses.

Mr_Lawnmower

macman wrote: »

You still haven't told us whether the fire occurred after death, or before. If after, it is not relevant to the contract issue.

I'd be interested in why you think the fire might be irrelevant if it happened after the customer's death.


I'm reasonably confident that the death doesn't frustrate the contract, as the customer's death doesn't prevent Zen from providing the service.

It's possible that the fire frustrated the contract, though as it would be relatively straightforward (albeit pointless) for service to be restored to the burnt out property, I think it is unlikely that the fire frustrated the contract.


I don't see why the timing of the fire is relevant. So far as I can see, if the customer died and a frustrating event occurred after the customer's death, the estate is liable for the charges arising only up to the time the contract was frustrated.

However, I could easily have got this wrong, which is why I'm genuinely interested in your explanation.

macman

Because most 'reasonable' suppliers will agree to terminate a service upon the demise of the customer. Not because there is a fire at the property, in which case their insurance should cover the continuing payments.
I'm surprised that Zen are taking this line and would suggest that the OP tries to contact someone higher up the food chain-most ISP's now have departments dealing with such eventualities, which are hardly unusual.

Silk

Mr_Lawnmower wrote: »

I'm reasonably confident that the death doesn't frustrate the contract, as the customer's death doesn't prevent Zen from providing the service.

A service contract such as a network contract relies on the supplier being able to provide the service and the customer being able to receive the service.
Unless the deceased was Derren Brown I doubt he would be able to receive the service, hence the contract ends.
Any charges up until the death would of course be chargeable to the estate if not already paid.

Mr_Lawnmower

Silk wrote: »

A service contract such as a network contract relies on the supplier being able to provide the service and the customer being able to receive the service.
Unless the deceased was Derren Brown I doubt he would be able to receive the service, hence the contract ends.

The leading cases on frustration of a contract through unavailability of a person are probably Morgan v Manser [1948] 1 KB 184 and Condor v Barron Knights [1966] 1 WLR 87. The common factor to both cases was that an individual essential to a music performance was unavailable (in the Morgan case, the artist had been called up for military service, in the Barron Knights case the drummer was not able to manage all the contracted shows due to illness, which frustrated his contract of employment with the band).

The case law is fairly clear that only a contract for personal services (a contract for a named individual to perform services) can be frustrated by death or illness of a person. This is certainly the conclusion reached by Halsbury's Laws of England (volume 22 (2012) paragraphs 473-474 if you happen to have access).

A contract for provision of services to an individual is not frustrated by that person's death, as the death does not make provision of the service to the address impossible. On the death of the Zen customer, the estate stands in the deceased's place in respect of any contractual obligations and entitlements.

Silk

Mr_Lawnmower wrote: »

A contract for provision of services to an individual is not frustrated by that person's death, as the death does not make provision of the service to the address impossible. On the death of the Zen customer, the estate stands in the deceased's place in respect of any contractual obligations and entitlements.

The provision of service to a given address is not in question. the ability for a deceased person to receive the service is impossible.

Mr_Lawnmower

Silk wrote: »

The provision of service to a given address is not in question. the ability for a deceased person to receive the service is impossible.

As I've already explained, only contracts for provision of services by an individual are frustrated by that individual's death. The ability of the provider to provide service to the estate, which stands in the customer's place following the customer's death, is therefore the key issue determining whether the contract for provision of services to an individual frustrated by that individual's death. The inability of the deceased to benefit from the service is irrelevant to the question of frustration.

A general rule that contracts with an individual are frustrated by that individual's death would have many undesirable consequences for the estate. The most obvious example is that the estate doesn't want a life insurance contract to be frustrated by the insured's death - it wants the contract to terminate by complete performance, which would be payment of the full death benefit due.


I've covered the case law I believe to be relevant to my conclusions on frustration of a contract for services received by a deceased individual in my earlier reply. I checked this answer against the online edition of Halsbury's Laws, which is widely accepted as the most comprehensive general legal encyclopaedia for the law of England and Wales, and gave the reference for anyone else who happens to have access to the current (fifth edition) paper or online editions. I haven't checked specialist works such as Chitty on Contracts, because I believe the information in the Contracts volume of Halsbury's Laws is adequate to verify my own understanding of the situation.

I'm quite happy for my conclusions on frustration to be proved wrong, but am mindful that you cannot do law by logical deduction as law simply doesn't work that way.


Any explicit contractual term covering the customer's death is a separate issue, as is the willingness of the provider to agree to discretionary early termination following the customer's death in the absence of (or in spite of) an explicit term at a zero or reduced termination fee. Most cases of customer death will resolve either via an explicit term that says what happens or provider discretion.

System

Just to be clear, a broadband (ADSL/VDSL) or landline telephone contract is a contract to supply a service to an address in the case of telephone or to a telephone number in the case of broadband. The contract is arranged by someone duly authorised, normally the owner/occupier of the premises. It is not a personal contract.

As an example (I just happen to be with Zen) it states

Unlimited Zen Fibre 1
Provision type: New service activation
Care Level: Standard Bundle: Yes
zen*****@zen 01*********

It is to provide ADSL to a telephone number

Topcat2007

Update - thanks for all your helpful & considered replies. We approached Zen again & dropped 'Which?' into the conversation. We got a call back later saying they had decided to waive the costs, for which we thanked them.

What I can't thank them for are the chasing emails addressed to the deceased!

Persistance paid off in the end.