Elderly relative ripped-off by builder.

anotherbob

An elderly relative has given £9000 to a builder to carry out some work at his home. After the family spoke to other traders known and trusted by them it was clear that the price was seriously extortionate. No work has yet been carried out and the builder has been asked to refund the money and cancel the arrangement.
In an email the builder has said he has spoken to my relative to discuss a "repayment plan". This is untrue and in further email correspondence he says that he no longer has the money having used it in financing materials for other work.
We are unclear as to the best way to proceed and would welcome advice. 

the_lunatic_is_in_my_head

How was the contract formed exactly OP?

Did the builder come to your relative's home and the relative agree whilst the trader was there or did the trader leave a quote which they later agreed to?

It's a very important question as the first comes with a right to cancel (timeframes vary but we can go over that if it applies ) where a the second doesn't.

If there isn't a right to cancel the consumer can still breach the contract but there may be reasonable costs to this (again can go over in detail if applicable). 

Was your relative given an exact price for works or was this simply £9k down with no actual total? 

Is the builder trading as a LTD (Limited Company)? 

anotherbob

Thank you for your response. I will need to speak to others more closely involved and get back to you.

the_lunatic_is_in_my_head

anotherbob said:

Thank you for your response. I will need to speak to others more closely involved and get back to you.

It can be a bit technical depending on the exact situation, the more info you can acquire the better for the most accurate advice  

DullGreyGuy

the_lunatic_is_in_my_head said:

If there isn't a right to cancel the consumer can still breach the contract but there may be reasonable costs to this (again can go over in detail if applicable). 

How can the consumer breach the contract if they have already paid in full  @the_lunatic_is_in_my_head ? They typically dont have any other contractual obligations to enable a breach.

the_lunatic_is_in_my_head

DullGreyGuy said:

the_lunatic_is_in_my_head said:

If there isn't a right to cancel the consumer can still breach the contract but there may be reasonable costs to this (again can go over in detail if applicable). 

How can the consumer breach the contract if they have already paid in full  @the_lunatic_is_in_my_head ? They typically dont have any other contractual obligations to enable a breach.

I assumed refusing to allow the service to be performed would be a breach? A builder obviously can't force their way into a home to carry out work simply because contract was formed with them  

Perhaps the correct term is that the relative is bring the contract to a end (possibly without justification)

The builder seems to be suggesting they accept this by mentioning a repayment plan but OP doesn't know (or hasn't said) if that means they intend to give the whole £9k back or retain some of it, the builder may be entitled to do the latter depending upon the exact circumstances. 

DullGreyGuy

the_lunatic_is_in_my_head said:

DullGreyGuy said:

the_lunatic_is_in_my_head said:

If there isn't a right to cancel the consumer can still breach the contract but there may be reasonable costs to this (again can go over in detail if applicable). 

How can the consumer breach the contract if they have already paid in full  @the_lunatic_is_in_my_head ? They typically dont have any other contractual obligations to enable a breach.

I assumed refusing to allow the service to be performed would be a breach? A builder obviously can't force their way into a home to carry out work simply because contract was formed with them  

Perhaps the correct term is that the relative is bring the contract to a end (possibly without justification)

The builder seems to be suggesting they accept this by mentioning a repayment plan but OP doesn't know (or hasn't said) if that means they intend to give the whole £9k back or retain some of it, the builder may be entitled to do the latter depending upon the exact circumstances. 

More likely it would frustrate the contract rather than breach it which has the effect of discharging the obligations of the parties. Generally means that the OP then cannot sue for the monies because they are the author of their own misfortunes and therefore the builder isnt liable for having not completed the work if they were denied access by the OP

the_lunatic_is_in_my_head

DullGreyGuy said:

the_lunatic_is_in_my_head said:

DullGreyGuy said:

the_lunatic_is_in_my_head said:

If there isn't a right to cancel the consumer can still breach the contract but there may be reasonable costs to this (again can go over in detail if applicable). 

How can the consumer breach the contract if they have already paid in full  @the_lunatic_is_in_my_head ? They typically dont have any other contractual obligations to enable a breach.

I assumed refusing to allow the service to be performed would be a breach? A builder obviously can't force their way into a home to carry out work simply because contract was formed with them  

Perhaps the correct term is that the relative is bring the contract to a end (possibly without justification)

The builder seems to be suggesting they accept this by mentioning a repayment plan but OP doesn't know (or hasn't said) if that means they intend to give the whole £9k back or retain some of it, the builder may be entitled to do the latter depending upon the exact circumstances. 

More likely it would frustrate the contract rather than breach it which has the effect of discharging the obligations of the parties. Generally means that the OP then cannot sue for the monies because they are the author of their own misfortunes and therefore the builder isnt liable for having not completed the work if they were denied access by the OP

The CRA states

https://www.legislation.gov.uk/ukpga/2015/15/schedule/2/enacted

Consumer contract terms which may be regarded as unfair

4. A term which has the object or effect of permitting the trader to retain sums paid by the consumer where the consumer decides not to conclude or perform the contract, without providing for the consumer to receive compensation of an equivalent amount from the trader where the trader is the party cancelling the contract.

5.A term which has the object or effect of requiring that, where the consumer decides not to conclude or perform the contract, the consumer must pay the trader a disproportionately high sum in compensation or for services which have not been supplied.

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.

and the CMA guidance states

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/450440/Unfair_Terms_Main_Guidance.pdf

5.13.3 Where customers bring the contract to an end without any justification, and

the trader suffers loss as a result, they cannot expect a full refund of all

86

prepayments.

96 But a term under which they always lose everything they

have paid in advance, regardless of the amount of any costs and losses

caused by the termination, is at risk of being considered an unfair financial

sanction – see paragraph 6 of the Grey List, discussed in paragraphs

5.14.1 of the guidance onwards. 

Reading 5.14 onwards explains further in great detail, broadly speaking simply because a consumer cancels in a instance where they have no right to full retention of payment is likely to be classed as unfair. 

Alderbank

DullGreyGuy said:

the_lunatic_is_in_my_head said:

DullGreyGuy said:

the_lunatic_is_in_my_head said:

If there isn't a right to cancel the consumer can still breach the contract but there may be reasonable costs to this (again can go over in detail if applicable). 

How can the consumer breach the contract if they have already paid in full  @the_lunatic_is_in_my_head ? They typically dont have any other contractual obligations to enable a breach.

I assumed refusing to allow the service to be performed would be a breach? A builder obviously can't force their way into a home to carry out work simply because contract was formed with them  

Perhaps the correct term is that the relative is bring the contract to a end (possibly without justification)

The builder seems to be suggesting they accept this by mentioning a repayment plan but OP doesn't know (or hasn't said) if that means they intend to give the whole £9k back or retain some of it, the builder may be entitled to do the latter depending upon the exact circumstances. 

More likely it would frustrate the contract rather than breach it which has the effect of discharging the obligations of the parties. Generally means that the OP then cannot sue for the monies because they are the author of their own misfortunes and therefore the builder isnt liable for having not completed the work if they were denied access by the OP

If the OP's relative decides not to allow the work to go ahead that is not frustration. That is breaking an (implied) contract term.

Frustration of contract is when it becomes impossible to perform due to a “supervening event” – one that isn't the fault of either of the parties, and that they couldn't reasonably have predicted. For example if the project depended on using a matching building material and that turns out to be no longer available or the landlord revokes permission.

The usual remedy for frustration, since neither party was to blame, is to restore them both to where they were before the contract was made, as far as possible.

anotherbob

the_lunatic_is_in_my_head said:

How was the contract formed exactly OP?

Did the builder come to your relative's home and the relative agree whilst the trader was there or did the trader leave a quote which they later agreed to?

It's a very important question as the first comes with a right to cancel (timeframes vary but we can go over that if it applies ) where a the second doesn't.

If there isn't a right to cancel the consumer can still breach the contract but there may be reasonable costs to this (again can go over in detail if applicable). 

Was your relative given an exact price for works or was this simply £9k down with no actual total? 

Is the builder trading as a LTD (Limited Company)? 

It appears that the sum of £9000 was agreed while the builder was present and a cheque was handed over at that time. This amount was a down payment with no mention of a total cost of the work. The cheque was made out in the name of the individual and not a limited company.

the_lunatic_is_in_my_head

anotherbob said:

the_lunatic_is_in_my_head said:

How was the contract formed exactly OP?

Did the builder come to your relative's home and the relative agree whilst the trader was there or did the trader leave a quote which they later agreed to?

It's a very important question as the first comes with a right to cancel (timeframes vary but we can go over that if it applies ) where a the second doesn't.

If there isn't a right to cancel the consumer can still breach the contract but there may be reasonable costs to this (again can go over in detail if applicable). 

Was your relative given an exact price for works or was this simply £9k down with no actual total? 

Is the builder trading as a LTD (Limited Company)? 

It appears that the sum of £9000 was agreed while the builder was present and a cheque was handed over at that time. This amount was a down payment with no mention of a total cost of the work. The cheque was made out in the name of the individual and not a limited company.

Thank you OP

In that case it's classed as an "off-premises" contract. 

As standard this comes with a 14 day cooling off period (ending 14 days after the day the contract was formed). 

However if the required information on the right to cancel isn't given the consumer has up to 1 year and 14 days to cancel. 

Do you know if any paperwork was given and if it was ideally can you post a readable photo of it please (with any personal information redacted).

Regarding the price:

https://www.legislation.gov.uk/ukpga/2015/15/section/51

(1)This section applies to a contract to supply a service if—

(a)the consumer has not paid a price or other consideration for the service,

(b)the contract does not expressly fix a price or other consideration, and does not say how it is to be fixed, and

(c)anything that is to be treated under section 50 as included in the contract does not fix a price or other consideration either.

(2)In that case the contract is to be treated as including a term that the consumer must pay a reasonable price for the service, and no more.

(3)What is a reasonable price is a question of fact.

If you had 3 quotes to show that the price from this builder isn't reasonable you could pay whatever is reasonable. 

Hopefully the builder hasn't dotted the i's and crossed the t's so there is the right to cancel