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Nicola-mod
Nicola-mod, Moderator
Category: Law
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Experience:  Moderator
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After signing a contract with a company called Creation for

Customer Question

After signing a contract with a company called Creation for the provision of credit for the purchase of furniture with DFS, Creation cancelled the contract. This was after they sent me emails and text messages to say that my credit application made through them for the purchase of said furniture had been approved and a month after I signed a contract in relation to the provision of credit. The reason for cancellation according to Creation was that the credit application was approved in error. They only informed me of this cancellation a day before the furniture was to be shipped. Unfortunately, I had already disposed of the furniture in my house in anticipation of the delivery, so I lost my furniture. I put in a complaint and asked for the reimbursement of the value of the furniture I disposed, £3,000 but was only offered £500 compensation. My question is, can a company decide to cancel a legally binding contract which has been signed by both parties. Note this cancellation occurred after the cooling off period. What should the penalty be for such a cancellation. I complained to the FOS and they said that Creation did not ask me to dispose my furniture so they are not liable, but how could I not as I believed I would be receiving delivery of new furniture because I had signed a legally binding contract.
Assistant: Where is this? And when did the issue begin?
Customer: London and Nov 2018
Assistant: What steps have you taken so far?
Customer: i have already highlighted this
Assistant: Anything else you want the Lawyer to know before I connect you?
Customer: no
Submitted: 13 days ago.
Category: Law
Expert:  JimLawyer replied 13 days ago.

Hello, my name is Jim and I am a qualified lawyer happy to help you this evening.

The FOS's decision doesn't mean you cannot sue for your loss - all you have to prove is that you incurred loss due to the finance company's conduct, the burden of proof only being 51%.

It comes down to basic contract law (offer, acceptance, consideration, intention to create legal relations). My view is the finance company breached the contract with you - there is a defence under "mistake", which can render a contract void if one party made a mistake but generally they can only back out of the contract if the contract was not signed - clearly that doesn't apply here as you had a signed agreement with them.

As such you should consider suing for the cost of your furniture. You would need to calculate your loss and give consideration to the fact your furniture was second hand in effect, so I would not expect the court to award you the cost of new furniture.

Once you have a figure I would recommend that you send the finance company a formal letter before action to demand payment within 14 days and say that if they do not pay you, you will issue county court proceedings against them. See attached template as an example of what to say. Please let me know if you cannot see the letter which I have uploaded. You will need to tailor this letter to your situation.

You will need to register at http://www.moneyclaim.gov.uk so that you are ready to issue the claim in the event they dispute the claim and do not pay you. The website is very user-friendly and you would not need a lawyer to use the money claim site. Claims with a value of under £10,000 are classed as a "small claim", so legal costs are not recoverable and the matter may be dealt with on paper by a Judge, not at a hearing. A hearing may be necessary if the court thinks that oral evidence is required to dispose of the case.

You would claim the sum for the loss, the court issue fee (details of the money claim fees are listed here at page 5: http://www.gov.uk/make-court-claim-for-money/court-fees) and court interest which is 8% calculated on a daily rate from the date of loss to date of court judgment. The site allows you to calculate the interest and add it to the claim.

If you are on a low income or have low savings (or in receipt of benefits), you can ask the court for a fee remission so you do not have to pay the court issue fee. If this applies, let me know as you cannot use the online money claims site – you have to use the paper N1 claim form and the EX160 fee remission form (I have copies).

If you win then once you have the CCJ from the court the defendant has 14 days to pay in full. If they do not then it gets registered with the credit agencies after 30 days. You can also enforce the CCJ with the county court bailiffs or transfer the debt to the High Court for a small additional fee assuming the total amount owed is at least £600 and you can use the high court enforcement officers who have greater powers than county court bailiffs. The transfer fee is added on to the debt and payable by the defendant.

There are other enforcement methods which I can help with, including bank account freeze, charging order on their property (and then apply to force a sale), application to wind up the company, apply to summons them to court for questioning, all of which can ensure you are actually repaid the money.

You may find they just pay you after receiving the letter before action – hopefully they will want to avoid litigation.

I hope this helps - if you can please accept the answer and give me a 5 star rating (there should be a button at the top of your screen to do this), I can answer follow up Q&A's at no extra charge and Just Answer will credit me for helping you today.

Many thanks,

Jim

Customer: replied 12 days ago.
Thank you. The FOS have said I can appeal their decision but what I would like is references to contract law that clearly states that it is a breach and what the penalty is. I want to be able to quote the law to the FOS with specific references so that they appreciate that what was done was illegal and therefore I am due remedies beyond the £500 compensation that I was offered
Expert:  JimLawyer replied 12 days ago.

OK, I was not aware from your initial question that you wanted case law and various references - I will struggle for time this evening so I will opt out to let another expert help you with that. Please do not reply to this as the question will stay with me and there will be a delay.

Thanks

Customer: replied 12 days ago.
Not interested in the call service. Written answer is fine by me
Expert:  Nicola-mod replied 12 days ago.
Hello,

It seems the professional has left this conversation. This happens occasionally, and it's usually because the professional thinks that someone else might be a better match for your question. I've been working hard to find a new professional to assist you with your question, but sometimes finding the right professional can take a little longer than expected.

I wonder whether you're OK with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.

Thank you!
Nicola
Customer: replied 12 days ago.
Yes, I’m still waiting for an answer
Expert:  Nicola-mod replied 12 days ago.
Hello,

We will continue to look for a Professional to assist you.

Thank you for your patience,
Nicola
Customer: replied 11 days ago.
Still waiting