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Remedies for Faulty Products under Consumer Credit Act and Soga - Case Study Example

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The paper "Remedies for Faulty Products under Consumer Credit Act and Soga" states that as established by UDT v Taylor [1980] SLT 28, Mr. Brown has the right here to repudiate both the sales and the credit agreement and demand a refund of the sum paid…
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Remedies for Faulty Products under Consumer Credit Act and Soga
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Remedies for Faulty Products Under Consumer Credit Act and SoGA The Sale of Goods Act 1979 and the Consumer Credit Act 1974 say that, if you can show the goods to be faulty or misdescribed, you have 'for a short time after purchase' a right to reject the goods and get a refund of the purchase price. This will include the return of the product in question if this is still available, or of the full value placed on it, if it has been disposed of. In Mr. Green's case, since he had the suite for a short time and as a consequence of the fact that it was faulty and misdescribed (shower cabinet), he is entitled to a refund. Since Mr. Green has decided to try to reject the car, he must stop using it and contact the seller/finance company to clarify his rejection and reasons thereof. Following that, it is necessary to record the rejection and the reasons for the stated, in addition to the desire for a refund, to the finance company/seller. A repair of the taps, replacement of the discolored bath and delivery of the shower cabinet may be accepted as a remedy. However, if this remedy is not satisfactory, consequent to faulty repair or the failure to deliver the shower cabinet, as per the contractually described one, Mr. Green may still claim a refund. Furthermore, considering that the fault was detected immediately upon delivery and installation, another remedy available to Mr. Green is the request for a reduction in price to compensate for the fault and the non delivery of the shower cabinet. In other words, the available remedies are refund, repair, reduction in price or rescission. Scenario 1: Hire-Purchase Agreement John - the assumption here is that the bathroom was bought under a Hire Purchase Agreement and, more specifically, a Debtor-Creditor Supplier agreement (DCS). Assuming that it is not clear in the question you are given whether it is a Hire Purchase Agreement governed by Debtor-Creditor-Supplier terms, you need to be able to identify it. Use the following as a guide: 1) Creditor and supplier are different people but there is an agreement between them that the creditor extends credit services to the supplier's customers 2) Creditor and supplier are the same person; the supplier has a finance facility which extends credit to customer for purchase of their goods (think of Marks and Spencer, Selfridges, etc.) 3) Credit card schemes in which the credit card supplied is restricted for use in a number of shops which are part of the scheme. Assuming that you've identified it as Hire Purchase Agreement - Debtor Creditor Supplier: WARNING - THIS AGREEMENT IS -99%- OF THE CASES FOR CARS. THEREFORE BE VERY VERY CAREFUL BEFORE YOU REACH THE CONCLUSION THAT IT IS RELEVANT TO THE QUESTION! Mr. Greene purchased the Carlton Suite and this should factor into his decision whether or not to pursue the remedy of terminating the contract. In order to clarify how this particular remedy will be financially costly to the debtor, it is first necessary to point out a number of facts associated with this type of credit agreement. In the first place, as per the credit agreement, Mr. Brown does not legally own the goods and shall not be in ownership of them until he has paid the full sum owed. His contract here is with the finance company and not with Breakspears Bathrooms. In other words, and as per Consumer Credit Act, S.11(1)(a), the bathroom was sold to the financial company by Breakspears and not to Mr. Green. In this instance, Mr. Green took delivery of the suite from the financial company. As such, the bathroom suite is bailed to Mr. Green in return for periodic payments and ownership rights shall only pass to him upon his completion of all payments. Should Mr. Green determine termination to be the remedy that he will pursue, the financial burden of doing so may fall upon him. His termination order will be governed by Consumer Credit Act 1974, Section 99 and Section 100. This is further established by Yeoman Credit v Waragowski. In this matter, even though the court recognised the debtor's right to terminate the agreement, it held that the goods be returned to the creditor and that payments made will be forfeited. His payments, in this instance will be as follows: Full Price : 5,000 Deposit Paid : 2,000 Hire Purchase : 3,000 Interest Charge : 300 (10% from 3,000) Instalments : 149 - first payment : 137 - X 22 months Paid instalments : Nil Arrears : Nil WORKOUT Price : Full Price 2 = 2,000 = 2,000 - (Paid Deposit + Paid Instalments) In part exchange of 2,000 = 2,000 - (2,000 + 0) = 2,500 - 2,000 = 500 Thus, the amount will be calculated, inclusive of interest. However, it need be noted that the following liabilities and rights also apply, if Mr. Green is able to prove that the good was faulty upon installation and the debtor did not meet his contractual obligations as pertains to satisfactory quality and conformity: - The Carlton Suite has been hired to Mr. Green who has the right to purchase it. - The contract is between Mr. Green and the finance company, and his rights are, accordingly, against the finance company and not Breakspears. - The implied terms are contained in the SG(IT)A. - As Mr. Green has paid more than a third of the purchase price (2000), the Carlton Suite has become protected goods' under CCA (1974), s. 94. The implication here is that if he defaults on the payment of the installations, the suite cannot be repossessed except by a court order. Scenario 2: Conditional Sale Agreement Assuming that Mr. Greene entered into a Conditional Sale Agreement, he is entitled to the remedies pertaining to defective goods as per the Sale of Goods Act. Within the context of this credit agreement, the bathroom suite does not belong to Mr. Green and will not belong to him until he has paid the last installment. After that, the ownership of the suite automatically reverts to him. However, in light of the non-conformity of the goods, Mr. Green is entitled to the remedies provided him under SoGA. Prior to explaining this, it is important to consider the nature of the transaction. In a conditional sales agreement, the condition of title arises at the time when the buyer is in possession, and not when the final installment payment is made. That is, the seller must be able to pass good title to the buyer at the time the buyer takes possession, even though legal title does not pass to the buyer until a later time. However, the seller may cure title if it is done before the buyer repudiates. Although s. 20(2) prevents exclusion of s. 16(a) in a retail sale, a private seller can exempt him or herself from s. 16(a) subject to the contra proferentum rule that such exemption clauses are construed strictly against the party seeking to rely upon them, and the fundamental breach principle that failure to pass title amounts to a total failure of consideration. Scenario 3: Credit Sale (In this case, Mr. Green purchased the suite through store financing provided by Breakspears) John - it is likely that you could get credit sale. Mr. Green purchased the bathroom suite through a credit agreement/service provided by Breakspears' Bathrooms itself. The facts of the transaction indicate that he paid a deposit of 500, with the remaining 4500 in addition to the standard 10% interest rate, amounting to 450, spread over 22 monthly installments. As per the agreement, therefore, Mr. Green is obligated to pay a monthly installment of 225 for a period of 22 months. However, unlike the hire purchase or the conditional sale agreement the ownership/title of the good purchased, the Carlton Suite has passed to Mr. Green upon the signature of the agreement and not pending payment of the last installation. The implication here is that, within the context of this two-party agreement, Mr. Green's claim is against the store and he is entitled to the remedies provided under SGSA and SoGA as discussed in the above (john - as we discussed in the first document). Remedies are not limited by the form of payment. Therefore, as established by UDT v Taylor [1980] SLT 28, Mr. Brown has the right here to repudiate both the sales and the credit agreement and demand a refund of the sum paid. Further, and as directly pertains to the case at hand, Andrews v Hopkinson [1957] 1 QB 229, establishes the right of the debtor to repudiate the contract and demand a full refund if goods do not meet the description and services were not provided with the required care and diligence. John - send me ur mail. Will contact u. If u need anything, just get in touch with me asap and don't worry about nything. These three are the most relevant to the case - especially the 3rd - the others are not relevant. Read More
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