Please help!!!!!!

bris

George_Michael wrote: »

That is incorrect.
Even when signing a contract and agreeing to buy goods or services, you still have the right to refuse to complete the purchase.
The caveat with this is that although you might decide to cancel, you can still be held liable for any losses or costs incurred by the trader because of your cancellation.
In the OP's case, the retailer can't legally keep all of the money paid so far unless they can prove that this money only covers the costs of the initial appointment and any associated administration costs.

You do know how contracts are formed don't you?
If one party wasn't made aware of or given an option to read any T&C's, the other party can't then hold them liable for T&C's that didn't exist at the time the contract was formed.

This is also incorrect, a company doesn't even need to give out T&C's. The T&C's can add to your consumer rights but never diminish them so with the lack of T&C's, which doesn't seem to be the case anyway, contract law applies.


The costs associated with the sale would need to be paid as if the contract was fulfilled. That doesn't limit to the buyer to admin costs, it means that the retailer is entitled to what the would have received if the sale was completed and that is profit. Learn about loss of profit and you will understand more about why deposits are seldom refunded other than goodwill.

steampowered

George_Michael wrote: »

That is incorrect.
Even when signing a contract and agreeing to buy goods or services, you still have the right to refuse to complete the purchase.
The caveat with this is that although you might decide to cancel, you can still be held liable for any losses or costs incurred by the trader because of your cancellation.
In the OP's case, the retailer can't legally keep all of the money paid so far unless they can prove that this money only covers the costs of the initial appointment and any associated administration costs.

That's not accurate. The law treats debt claims and damages claims differently. The requirement to "mitigate your loss" does not apply to debt claims.

If you enter into a contract to buy an item, and you refuse to complete, the seller is entitled to claim the agreed price for that item in full as a debt. Of course the seller would then have to provide the item.

If the Op does attempt to claim a refund, the shop could legitimately turn around and counterclaim for the remainder of the agreed price.

George_Michael wrote: »

You do know how contracts are formed don't you?
If one party wasn't made aware of or given an option to read any T&C's, the other party can't then hold them liable for T&C's that didn't exist at the time the contract was formed.

shaun_from_Africa wrote: »

Kezbobs74 didn't state that they decided not to read the T&C's. they stated that they were not told that the T&C's were on the back of the form, hence they didn't read them.

The Op will be judged to the standards of a reasonable person. I am struggling to see how a credible argument could be made that a reasonable person would not be aware of T&Cs printed on the back of an order form. Printing T&Cs on the back of order forms is standard practice for all types of business.

I don't think the Op would have much luck convincing a judge that the T&Cs are not binding because the shop used two-sided paper.

steampowered

bris wrote: »

The costs associated with the sale would need to be paid as if the contract was fulfilled. That doesn't limit to the buyer to admin costs, it means that the retailer is entitled to what the would have received if the sale was completed and that is profit. Learn about loss of profit and you will understand more about why deposits are seldom refunded other than goodwill.

Loss of profit is a concept which applies to damages claims. It doesn't apply to debt claims. The seller doesn't have to prove any loss at all; it can simply claim the agreed price.

unholyangel

steampowered wrote: »

That's not accurate. The law treats debt claims and damages claims differently. The requirement to "mitigate your loss" does not apply to debt claims.

If you enter into a contract to buy an item, and you refuse to complete, the seller is entitled to claim the agreed price for that item in full as a debt. Of course the seller would then have to provide the item.

If the Op does attempt to claim a refund, the shop could legitimately turn around and counterclaim for the remainder of the agreed price.



The Op will be judged to the standards of a reasonable person. I am struggling to see how a credible argument could be made that a reasonable person would not be aware of T&Cs printed on the back of an order form. Printing T&Cs on the back of order forms is standard practice for all types of business.

I don't think the Op would have much luck convincing a judge that the T&Cs are not binding because the shop used two-sided paper.

Sorry but thats laughable. When you are in breach of contract, the other party are entitled to damages. There is no entitlement to any amount they could reasonably save.


From unfair term guidance:

Part 1 of Schedule 2 states that the following may be unfair:
(6) A term which has the object or effect of requiring a consumer who
fails to fulfil his obligations under the contract to pay a
disproportionately high sum in compensation.


5.14.1 It is unfair to impose disproportionate sanctions for breach of contract. A
requirement to pay more in compensation for a breach than a reasonable
pre-estimate of the loss caused to the trader is one kind of sanction that is
liable to be considered disproportionate. Such a requirement may be void
to the extent that it amounts to a penalty under English common law.

5.14.3 Other kinds of penal provisions which may be unfair are clauses saying that
the business can:
 claim all its costs and expenses, not just its net costs resulting directly
from the breach;
 claim both its costs and its loss of profit where this would lead to being
compensated twice over for the same loss; and
 claim its legal costs on an ‘indemnity’ basis, that is all costs, not just
costs reasonably incurred. The words ‘indemnity’ and ‘indemnify’ are
also objectionable as legal jargon – see the section on transparency in
part 2 of the guidance.

5.14.4 Potentially penal terms. A disproportionate financial sanction involving
requirement to pay a fixed or minimum sum, in all circumstances, will be
open to challenge if the sum could be too high in some cases.

5.14.6 Termination charges. A term which says, or is calculated to suggest, that
inflated sums could be claimed (or retained from prepayments) if the
consumer ends the contract is likely to be challenged as unfair. For
example, a charge for wrongful termination that requires payment of the
whole contract price, or a large part of it, is likely to be unfair if in some
cases the business could reasonably reduce (‘mitigate’) its loss. If, for
example, it could find another customer, generally, the law would allow it to
claim no more than the likely costs of doing so, together with any difference
between the original price and the resale price.

If OP cancels then its wrongful cancellation which places them liable for damages incurred.

5.16.7 Again, fairness is more likely to be achieved if cancellation terms merely
reflect the way in which the ordinary law would apply in any event. A cancellation
clause is, for instance, unlikely to raise concerns if it fairly alerts
the consumer to his or her liability in damages for wrongful cancellation

steampowered

unholyangel wrote: »

Sorry but thats laughable. When you are in breach of contract, the other party are entitled to damages. There is no entitlement to any amount they could reasonably save.

From unfair term guidance:

First, a plea for civility. It would be nice if we can raise the tone of discussion so that we don't have unpleasant remarks when people disagree. It brings down the whole tone of the forum when people are making comments such as "thats laughable" or "You do know how contracts are formed don't you" - I am a professional in this area and know exactly what I'm talking about, thank you very much!!!

The law is clear that neither the requirement to "mitigate your loss" nor the rule against "penalty clauses" apply to debt claims. A claim for the agreed price of an item is a debt claim, not a damages claim.

For example, if you sign up for a 12 month broadband contract with Vodafone at £30 a month and fail to pay, the amount Vodafone can claim is £30 a month. Vodafone doesn't have to prove the contract is actually worth £30. Vodafone doesn't have to prove that it incurred costs. It simply claims the agreed price.

If you are unsure about this, here is an article from a major law firm, which states the difference between debt claims and damages claims in black and white.

You could also have a read of the House of Lords decision on banking charges. The decision in that case was that banking charges are to be viewed as the agreed price for a service, not a penalty. As a result the banks do not have to prove any loss, don't have to prove their administration costs and don't have to mitigate their loss. The banks can simply charge the agreed fee. Have a read of the MSE article about this here.

None of the guidance you have posted applies to the Op's situation because it all concerns penalty charges. The law isn't interested in whether the Op agreed a good price for the dress or a bad price. If we were talking about some kind of late payment charge then the guidance would be relevant, but it doesn't apply to a claim for the price of the dress.

Apologies for the long post. The point underlying all of this is that, if the Op agreed to buy a dress and agreed to pay a particular number of monthly installments, she doesn't have a right to get a refund, doesn't have a right to cancel the contract and could be liable for all the remaining installments. T&Cs or no T&Cs! Unless of course the shop told her she could cancel, which doesn't seem to be the case.

Kezbobs74

Thanks everybody for the advice. I don't claim to know anything about consumer law, hence the reason for the thread in the 1st place.

I always thought when entering into a credit agreement, you should be made aware of the terms of the agreement regarding payment, cancellation, non payment etc. I work in retail myself where customers sign up to a store card. We're not able to just presume that people have read the terms, we're to read them to the customer and ask if they're happy to proceed. My peeve is that the dress doesn't even exist yet, hasn't been ordered or started to be made so how can it be justified to keep all the money I've paid so far as there's no losses incurred by the shop. A percentage is fair enough, but all the money? I suppose it's a valuable lesson learnt on my behalf and I'm grateful for all the comments made so thank you everyone.

Mr.Generous

I wonder if on the form you signed it says something along these lines ....

Customer signature..



I agree to the terms and conditions of sale printed on the reverse of this document.

Or

Terms and conditions apply, see reverse of sheet.

Or

By signing this order you have read and understood the terms and conditions on the rear of the sheet and agree to them

Etc etc.

If they don't then its a very amateurish effort, they were setting up a credit agreement so I would be amazed if they hadn't done this.

Kezbobs74

I don't know as I wasn't given a copy. I'm going into the shop tomorrow so I can have a look. I just wanted to know where I stood before I went in there to be honest.

unholyangel

steampowered wrote: »

First, a plea for civility. It would be nice if we can raise the tone of discussion so that we don't have unpleasant remarks when people disagree. It brings down the whole tone of the forum when people are making comments such as "thats laughable" or "You do know how contracts are formed don't you" - I am a professional in this area and know exactly what I'm talking about, thank you very much!!!

The law is clear that neither the requirement to "mitigate your loss" nor the rule against "penalty clauses" apply to debt claims. A claim for the agreed price of an item is a debt claim, not a damages claim.

For example, if you sign up for a 12 month broadband contract with Vodafone at £30 a month and fail to pay, the amount Vodafone can claim is £30 a month. Vodafone doesn't have to prove the contract is actually worth £30. Vodafone doesn't have to prove that it incurred costs. It simply claims the agreed price.

If you are unsure about this, here is an article from a major law firm, which states the difference between debt claims and damages claims in black and white.

You could also have a read of the House of Lords decision on banking charges. The decision in that case was that banking charges are to be viewed as the agreed price for a service, not a penalty. As a result the banks do not have to prove any loss, don't have to prove their administration costs and don't have to mitigate their loss. The banks can simply charge the agreed fee. Have a read of the MSE article about this here.

None of the guidance you have posted applies to the Op's situation because it all concerns penalty charges. The law isn't interested in whether the Op agreed a good price for the dress or a bad price. If we were talking about some kind of late payment charge then the guidance would be relevant, but it doesn't apply to a claim for the price of the dress.

Apologies for the long post. The point underlying all of this is that, if the Op agreed to buy a dress and agreed to pay a particular number of monthly installments, she doesn't have a right to get a refund, doesn't have a right to cancel the contract and could be liable for all the remaining installments. T&Cs or no T&Cs! Unless of course the shop told her she could cancel, which doesn't seem to be the case.

That was civil.

Perhaps you need to reread the links you posted:

The principle that sums due under an indemnity are recoverable as a debt found favour in the case of Royscot Commercial Leasing Limited v Ismail (1993), in which the Court of Appeal held that:

“a claim under a contract of indemnity, such as this, is not a claim in damages at all, but is a claim in debt for a specified sum due on the happening of an event which has occurred. Accordingly, it should not be open to a person providing an indemnity to challenge his obligation to pay under the contract of indemnity by reference to principles relating to the assessment of damages for breach of contract which have no application to debts.”

This approach was also applied by the High Court in the case of Codemasters Software v Automobile Club de L’Quest [2009] 3194 (Ch):

“The law, so far as I am concerned, is therefore that questions of mitigation do not arise under contracts of indemnity” (per Mr Justice Warren paragraph 32).

More recently Flaux J, in ABN AMRO Commercial Finance plc v Ambrose McGinn, Ross Lawrance Beattie, Marcus Leek [2014] EWHC 1674 (Comm), similarly concluded that mitigation is not a relevant consideration under a claim for a contract of indemnity. In this case, the claimant was a factor and had purchased the entire debts of the defendants’ company.

This was not a claim under contract of indemnity.

This solicitors page perhaps helps explain it (although you'll notice it comes under business leases and not consumer contracts):
http://www.raymondcooper.co.uk/business-leases/tenants-indemnity-covenants-leases/

In the case of an action for breach of contract, the claimant must take all reasonable steps to mitigate the loss which he has sustained consequent upon the defendant’s default; if he fails to do so, he will not be able to claim damages for any such loss which he ought reasonably to have avoided. Again the question arises of whether a similar rule would apply in an action based on an indemnity covenant. There is little case law, but one relevant decision is Royscott Commercial Leasing Limited v Ismail (Court of Appeal 29 April 1993, apparently unreported but the transcript is available online at lexisnexis.com). That case dealt with a lease in which the lessee agreed to indemnify the landlord if the landlord incurred certain costs. The tenant argued that the landlord should have tried to mitigate the expenses and the Court of Appeal held that an indemnity was a debt claim and therefore the mitigation rule did not apply. However, as mentioned, the claim related to particular expenses and was not concerned with the general indemnity for breach of contract the same can be said for the other cases considered in Royscott i.e. Scottish Midland Guarantee Trust v Woolley [1964] 144 LJ 272 and White and Carter (Councils) Limited v McGregor [1962] AC 413. In all of these cases it would have been difficult to see how the expenses could have been mitigated. A court may be more likely to apply the rule in the case of the kind of general indemnity under consideration here, but there is no certainty.

No one is saying OP has a right to cancel. Thats what wrongful cancellation is - where you don't have a right to cancel but do it anyway.

And if you think the guidance in no way applies to OP and only relates to late payment penalties perhaps you'd like a read of the unfair terms annexes (which gives examples of terms found to breach the legislation under OFT and what action was taken):

Group 5: Financial penalties

Cancellation fees and penalties

Original term
In the event of a cancellation after seven days of order the customer will
be liable to pay the balance due for the goods purchased.
Action taken
Term deleted

Original term
The Company reserves the right to charge a cancellation fee, the
minimum being 30 per cent of the order value, this does not represent a
penalty and serves to liquidate the company's costs.
Action taken
Term deleted.

Original term
Without prejudice to its right to claim damages for breach of contract the
company may in its sole discretion agree to the cancellation of an order
which a purchaser has no right to cancel, upon payment to the company
of all expenses incurred.
Action taken
New term: If the purchaser cancels this agreement otherwise than in
accordance with these provisions, the seller may be entitled to claim
damages in accordance with the general rules of English law.

Original term
In the event of cancellation of orders we reserve the right to make a
cancellation charge sufficient to cover all expenses for handling charges
and in any event a minimum of 20 per cent of the total order values will
be charged.
Action taken
New term: If you cancel an order, we will lose the time we have spent on
your order up to the time at which you cancel and so we reserve the right
to charge you a cancellation fee which is sufficient to cover our lost
expenses and handling charges.

You'll notice it comes under the heading "cancellation fees & penalties" and that late payment penalties has a section all of its own.

ETA: Also in the MSE article you'll see it hinged on whether bank charges formed the core part of a bank account or not - ie whether the chrages amounted to a penalty for breach of contract or whether it was simply a fee for exercising a contractual option - because as you said it doesn't relate to price. Can't see any logical way that the same would apply regarding cancellation with a retailer though.

ess0two

Kezbobs74 wrote: »

Thanks everybody for the advice. I don't claim to know anything about consumer law, hence the reason for the thread in the 1st place.

I always thought when entering into a credit agreement, you should be made aware of the terms of the agreement regarding payment, cancellation, non payment etc. I work in retail myself where customers sign up to a store card. We're not able to just presume that people have read the terms, we're to read them to the customer and ask if they're happy to proceed. My peeve is that the dress doesn't even exist yet, hasn't been ordered or started to be made so how can it be justified to keep all the money I've paid so far as there's no losses incurred by the shop. A percentage is fair enough, but all the money? I suppose it's a valuable lesson learnt on my behalf and I'm grateful for all the comments made so thank you everyone.

You didn't enter a credit agreement? more a savings / deposit scheme to me?