Creditor signature on Credit Agreement - Help

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Creditor signature on Credit Agreement - Help

Postby mark1963 » Wed Sep 16, 2009 9:55 am

I wrote to my loan company asking for a true copy of the contract. The loan was taken out in 2006.

They have sent a copy of the credit agreement signed by myself, my wife (now divorced) and another signature on behalf of the loan company.

My question is - can they do that and enforce it as a contract?

I know they did not give full disclosure and they have no consideration, but can they sign the credit agreement?

They additionally say they will not provide a true copy signed by their CEO unless I can assert authority.

Any help would be appreciated.
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Re: Creditor signature on Credit Agreement - Help

Postby mark1963 » Wed Sep 16, 2009 5:17 pm

I have had a letter today from the loan company further to my inquiring about the legitimacy of a contract without full disclosure and equal consideration.

They have completely ignored the full disclosure bit, but have given an interesting explanation based on precedent.
Consideration is defined as:

"....some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility suffered or undertaken by the other" (Currie v Misa (1875) LR 10 Ex 162)

and

"An act of forbearance of one party, or the promise thereof, is the price for which the promise of the other is bought, and the promise thus given for value is enforceable" (Dunlop v Selfridge [1915] AC 847)

This most definitely not what I have read in all the freeman forums and sites.

What do you all think?
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Re: Creditor signature on Credit Agreement - Help

Postby Jim » Wed Sep 16, 2009 6:31 pm

Interesting. It's good to have a definition of "Consideration" set out in clear(ish) terms like this. "An act of forbearance of one party... is the price for which the promise of the other is bought." However, if the act of signing a loan application "creates" the money to be lent then surely this cannot count as an act of forbearance by the creditor. Could this be why they are so reluctant to discuss the "Disclosure" element of the loan agreement?
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Re: Creditor signature on Credit Agreement - Help

Postby huntingross » Wed Sep 16, 2009 7:41 pm

forbearance n. an intentional delay in collecting a debt or demanding performance on a contract, usually for a specific period of time. Forbearance is often consideration for a promise by the debtor to pay an added amount.


I don't understand the relevance.
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Re: Creditor signature on Credit Agreement - Help

Postby huntingross » Wed Sep 16, 2009 7:54 pm

Outline of the Dunlop case is here

Or here

I've studied it in the context of consideration, here's my notes from it:

Similarly, in Dunlop Pneumatic Tyre Co v Selfridge (1915) HL, the HL explained consideration in terms of sale and purchase:
· Viscount Haldane “In the law of England certain principles are fundamental… A second principle is that if a person with whom a contract not under seal has been made is to be able to enforce it, consideration must have been given by him to the promisor or to some other person at the promisor’s request”
· Lord Dunedin – “I am content to adopt from a work of Sir Frederick Pollock … the following words as to consideration: ‘an act or forebearance of one party, or the promise thereof, is the price for which the promise of the other is bought, and the promise thus given for value is enforceable”

I know it's also come up in at least one other area.... which is privity of contract. This is the summary I have in my revision notes - sorry if you're looking for more detail!

Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd (1915) AC 847
* In a contract dated 12/10/11, wholesalers Dew & Co agreed to buy tyres from manufacturers Dunlop
* It was expressly agreed in the contract that Dew & Co would not sell the tyres for a price lower than that fixed by Dunlop
* Dew & Co also undertook to obtain price-fixing agreements with any party with whom they subsequently contracted (i.e. those buying wholesale tyres)
* Dew & Co later sold tyres to Selfridge & Co Ltd on these terms
* Selfridge & Co Ltd broke the agreement and sold the tyres at discounted prices
* Dunlop sued Selfridge & Co Ltd, seeking an injunction
* The claim failed for lack of privity - Selfridge & Co was a third party to the contract between Dew & Co and Dunlop; meaning that they could not sue or be sued under it

Hope that helped! x
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Re: Creditor signature on Credit Agreement - Help

Postby mark1963 » Wed Sep 16, 2009 8:04 pm

I've just had this given to me.

It appears that in english law consideration implies an economic value, even £1. The loan co. did not even give this amount as their part of consideration.

From the Oxford Dictionary of Law, 5th Edition.


consideration n.
An act, forbearance, or promise by one party to a contract that
constitutes the price for which he buys the promise of the other.
Consideration is essential to the validity of any contract other than
one made by deed.
Without consideration an agreement not made by deed is not binding:
it is a nudum pactum (naked agreement), governed by the maxim ex nudo pacto non oritur actio
(a right of action does not arise out of a naked agreement).

The doctrine of consideration is governed by four major principles.

(1) A valuable consideration is required, i.e. the act, forbearance, or promise must have some economic value.
Good consideration (natural love and affection or a moral duty) is not enough to render a promise enforceable.

(2)Consideration need not be adequate but it must be sufficient.
Not to be adequate in this context means that it need not constitute a realistic
price for the promise it buys, as long as it has some economic value.
If X promises to sell his £50,000house to Y for £5000,Y is giving valuable
consideration despite its inadequacy.
£1 is often the consideration in commercial contracts.
That it must be sufficient means sufficient in law.
A person's performance of, or promise to perform, an existing duty usually cannot in law constitute consideration.

(3) Consideration must move from the promisee. Thus if X promises to give Y £1000 in return for Y's
promise to give employment to Z, Z cannot enforce Y's promise, for he has not supplied the consideration for it.

(4) Consideration may be executory or executed but must not be past.
A promise in return for a promise (as in a contract of sale) is executory consideration; an act or forbearance in return for a promise (as in giving information to obtain a reward) is executed consideration.
However, a completed act or forbearance is past consideration in relation to any subsequent promise.
For example, if X gives information to Y gratuitously and Y then promises to reward him this is past consideration, which does not constitute consideration.
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Re: Creditor signature on Credit Agreement - Help

Postby huntingross » Wed Sep 16, 2009 8:14 pm

So what is your interpretation of this in the context of your agreement, and what you asked them to provide ??

I don't see what the relevance is to the specifics.
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Re: Creditor signature on Credit Agreement - Help

Postby mark1963 » Wed Sep 16, 2009 8:19 pm

I have asked them to provide evidence of their part of the consideration, even the £1 minimum.

Is this not right?
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Re: Creditor signature on Credit Agreement - Help

Postby huntingross » Wed Sep 16, 2009 8:26 pm

I'd agree with that.

They seem to have provided you with irrelevant case law....unless they have given some consideration that you may not have recognised as such.

And if they can't prove that they gave you ANY consideration.....They have just given you case law that says no contract exists.....

This is a high risk strategy by them..!!!!
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Re: Creditor signature on Credit Agreement - Help

Postby consumerpada » Wed Sep 16, 2009 9:10 pm

Hold on a minute first things first.....they have jumped the gun,(as per usual, silky smooth)

But you still haven't seen the original right? as in your promise? do accept that they have it ?

Do you submit to their validation of the copy?

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