An Act to establish for the protection of consumers a new system, administered by the Director General of Fair Trading, of licensing and other control of traders concerned with the provision of credit, or the supply of goods on hire or hire-purchase, and their transactions, in place of the present enactments regulating moneylenders, pawnbrokers and hire-purchase traders and their transactions; and for related matters.
Liability of creditor for breaches by supplier.
If the debtor under a debtor-creditor-supplier agreement falling within section 12(b) or (c) has, in relation to a transaction financed by the agreement, any claim against the supplier in respect of a misrepresentation or breach of contract, he shall have a like claim against the creditor, who, with the supplier, shall accordingly be jointly and severally liable to the debtor.
Subject to any agreement between them, the creditor shall be entitled to be indemnified by the supplier for loss suffered by the creditor in satisfying his liability under subsection (1), including costs reasonably incurred by him in defending proceedings instituted by the debtor.
Subsection (1) does not apply to a claim—
under a non-commercial agreement, F1. . .
so far as the claim relates to any single item to which the supplier has attached a cash price not exceeding [£100] or more than [£30,000]
under a debtor-creditor-supplier agreement for running-account credit—
which provides for the making of payments by the debtor in relation to specified periods which, in the case of an agreement which is not secured on land, do not exceed three months, and
which requires that the number of payments to be made by the debtor in repayments of the whole amount of the credit provided in each such period shall not exceed one.]
This section applies notwithstanding that the debtor, in entering into the transaction, exceeded the credit limit or otherwise contravened any term of the agreement.
In an action brought against the creditor under subsection (1) he shall be entitled, in accordance with rules of court, to have the supplier made a party to the proceedings.
Further provision for liability of creditor for breaches by supplier
If the debtor under a linked credit agreement has a claim against the supplier in respect of a breach of contract the debtor may pursue that claim against the creditor where any of the conditions in subsection (2) are met.
The conditions in subsection (1) are—
that the supplier cannot be traced,
that the debtor has contacted the supplier but the supplier has not responded,
that the supplier is insolvent, or
that the debtor has taken reasonable steps to pursue his claim against the supplier but has not obtained satisfaction for his claim.
The steps referred to in subsection (2)(d) need not include litigation.
For the purposes of subsection (2)(d) a debtor is to be deemed to have obtained satisfaction where he has accepted a replacement product or service or other compensation from the supplier in settlement of his claim.
In this section “linked credit agreement” means a regulated consumer credit agreement which serves exclusively to finance an agreement for the supply of specific goods or the provision of a specific service and where—
the creditor uses the services of the supplier in connection with the preparation or making of the credit agreement, or
the specific goods or provision of a specific service are explicitly specified in the credit agreement.
This section does not apply where—
the cash value of the goods or service is £30, 000 or less,
the linked credit agreement is for credit which exceeds £60, 260, or
the linked credit agreement is entered into by the debtor wholly or predominantly for the purposes of a business carried on, or intended to be carried on, by him.
Subsections (2) to (5) of section 16B (declaration by the debtor as to the purposes of the agreement) apply for the purposes of subsection (6)(c).
This section does not apply to an agreement secured on land.
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