I have previously posted on the subject of Pheonix and have been to court and successfully defended a claim. PheonixBusiness Agents v S Wynn (2012) CASE No. 1SE02571 - Walsall County Court I must point out that it is not a good idea to try and defend this on the basis of any consumer laws as these do not apply in the case of Pheonix contracts. As was made clear in the case I defended, all contracts are not between a business and a consumer, as in every case both parties to the contract are in fact a business. Therefore the contract is made between two parties on an equal footing. The judge in my case stated very clealry that when two equals enter a contract they may give away their rights within the terms of the contract and therefore tests of fairness do not apply. The only good defence is the same defence used in "Private Parking Ticket" cases. I used the same defence supplied by some great members of consumer action group to win this case. That a charge for breach of contract must be a "GENUINE PRE-ESTIMATE OF LOSS" If IT IS NOT it becomes a penalty and is uneforceable in law. I am not a solicitor - Pheonix came with a solicitor who in private chambers told me I didn't have a chance. BUT using the following case, the judge threw out the Pheonix claim: "OB Services V ThurlowWorcester Combined Court 10 February 2011".

To give a recap. Excel had taken action against me for dishonouring a cheque and as is well known this is very difficult to defend. We ended up having three hearings in Walsall County Court and they sent their legal rep on the first visit and on the other two they had a manager and assistant turn up. On our final hearing the case was heard and my defence of "no consideration in the transaction" was successful and therefore the judge allowed my cheque to be cancelled. This was due to the fact that I had not parked to shop but to visit my place of employment. The judge stated that as I had not parked to shop and it was a shoppers car park he would allow an action of tresspass against me and awarded £25 for each day I parked. This with the basic costs meant that I had to pay £115 to Excel. Excel parking had originally invoiced me for £240 and later claimed £120 for the cheque. The costs of their travel to and from Sheffield on three occasions was estimated at £210 (which they did not claim) As each visit to Walsall lasted most of the day they lost five working staff days. My employers gave me the time off and stated that they considered it a training excercise. Would I do it again - Yes Would I write a cheque for an invoice again - No What the judge did confirm was that had I been a shopper who overstayed in the car park and had refused to pay the invoice, I would have been able to successfully defend on the principle of the claimant only being able to demand a "genuine pre-estimate of loss". My big mistake was sending a cheque. I must also add that the support I had from this forum and others who made contact was invaluable and I would always recommend not paying these invoices and that "as the judge said in my case - these charges are unenforceable in law as they are a penalty" I was in a catch 22 situation. To defend the cheque I had to be a tresspasser and as a tresspasser they could claim a small damages fee. Had I been a shopper the judge would have agreed that this was an unenforceable penalty but the "Bills of Exchange Act" would have forced me to honour my cheuqe.

The main franchise owners provide the franchise with two solicitors - probably covering UK North and South, are you in the north? as part of the franchise package the solicitors will take on cases but are given the green light by the actual owners. So in your case I presume that the head office will have to give the go ahead for such an action.

Widdows Pilling are one of the two they normally use - the £7200 needs to reflect an actual loss, had negotiations already begun for a sale?

In the case I mentioned they were trying to sue for £3000 and presented a loss estimate which came to about £1765. The judge wouldn't even award that amount as this did not match the £3000 which then makes the £3000 a penalty. So the other side have to provide a calculated loss breakdown equal to £7200 - I'd like to see that!!

Hi tb Yes the whole thing gets a little more scary when you get out of the small claims arena and paying their solicitors costs would not be good if you don't win. But the fact still remains they will have to prove that the £7200 is an actual loss and not a penalty for cancellation. Which solicitors are they using? The case I referred too was due to the cancellation of the contract after the initial first six months. The circumstances of the cancellation are not really relevant... .the judge will stick to a point of law and that will be ...is the £7200 a genuine pre estimate of loss. I would ask their solicitor to send you a breakdown of the what the £7200 consists of and state that you will consider the matter on receipt of such a breakdown. Don't mention the pre estimate of loss. If they aren't able to give you a valid loss breakdown for the amount then continue to challenge - and oops you have a nice little bit of evidence to put before the judge!!!

Hi Ragingbull - - This company have a contract with solicitors and will sometimes venture to go to court but in your case it seems unlikely. The defence used in the case mentioned on the other thread was a defence of Unenforceable Penalty Charge for contract breach. The judge will ask Pheonix to quantify their loss and as they had already stated in the contract that they took payment for administration / marketing they will have to prove that your breach caused them to ACTUALLY suffer a loss. What is that loss, you've already paid upfront for marketing and therefore they must present the judge with a GENUINE PRE ESTIMATE of loss. The solicitor at the prior hearing could not produce anything other than the marketing costs - the judge dismissed their case as these had already been paid and the £3000 was defined as a penalty! Remember in small claims hearings neither party can claim for the cost of a solicitor so its a huge gamble for anyone taking a solicitor. Write to their solicitor and tell them you will defend on the basis of "unenforcable penalty" as not a "genuine pre estimate of their loss". As you've been told - when debt collection companies offer you a discount is usually means that desperation is setting in! If its just debt collection letters from a debt collector then ignore them. If it does go to court you can post again and get help but I doubt it will go that far.

Unfair Contract Terms Act 1977 (UCTA) You don't have the same protection as individual consumers when you make purchases exclusively for the use of your business. A consumer contract excluding liability for defective goods would be automatically invalid. But when buying as a business it's up to you to check in advance what terms and conditions you're agreeing to. Sole traders count as businesses rather than consumers for any purchases they make in connection with their business activities. However, if the trader offers you credit terms up to £25,000, you receive the same protection as individuals under the Consumer Credit Act 1974 for this element of the contract. The test of reasonableness The UCTA doesn't define precisely what is meant by 'reasonable', but courts will usually take into account: the information available to both parties when the contract was drawn up whether the contract was negotiated or in standard form whether the buyer had the bargaining power to negotiate better terms You don't have the same protection as individual consumers when you make purchases exclusively for the use of your business. "You could try to issue a claim against Pheonix for the £1000 in the small claims court - you might get a sympathetic Judge - but you will need to PROVE that the contract was unreasonable"

Just to clarify I actually attended the hearing with a business owner and spent time both in the hearing and outside the hearing in discussion with the claimants solicitors. Phoenix have a contract with several solicitors who are contracted to represent the franchise owners. The case we presented to the court relied on consumer guidance as produced by the OFT and the issue of an unenforceable penalty. The judge went through the matter in detail and made it clear that this transaction was a business contract as both parties were "a business" and that it related to the sale of a business and therefore parties were on an equal footing. He stated that the contract was signed and agreed by the parties concerned and that my client had the chance to check the contract. We could not prove that verbal agreements invalidated the contract as it was one parties word against the other. The Judge spent a long time going through the case law for Consumer Law and the sale of a Business as supplied by Pheonix. I thought we had lost the case until the Judge went through the matter of "penalties" in contract, once again in great detail. It was on this point that the claimant and his solicitor were at a loss to defend their position and the Judge dismissed their claim but stated that our counter claim was also dismissed. We lost the £1000 but I had seen their costs for the hearing which were over £1500. I doubt that they will attempt to take you to court if you advise them that you will defend any such action on the grounds of it being an unenforcable penalty. In the event that you are taken to court I will supply you with the defence used in this recent case with personal info removed and amended to take account of the Judges position on consumer contracts.

The contract is the same as the one posted in the first post and when this went to court the matter of signing as a private individual made no change to the fact that it is a business contract. I tried to use consumer protection and the judge dismissed this within the first 10 minutes of the hearing as the claimants solicitor provided case law to establish that the selling of a business is not covered by consumer regulations even if you sign as an individual. The judge stated that the £1000 paid upfront was the cost of administration and marketing as it says in your contract. He therefore said that the £3000 was a penalty and unenforcable in law as it was not a genuine pre estimate of loss. It cannot be the loss suffered as the £1000 is a payment for marketing - so what have they lost. In my view you will have lost the £1000 but the £3000 is a penalty and unrecoverable in law. If your £1000 had been a deposit they would be on stronger ground but it states that it is a marketing fee. I may be wrong on the loss of the £1000 but in the case at court that I attended the judge dismissed the counter claim for the £1000.

The case being heard the following is applicable. The claimant was a franchise and therefore negotiated terms possibly without reference to the main franchise holder. The issue of OFT rules for consumer transactions was not applicable in this case as the defendant was not deemed to be a consumer but a business. At no point was the contract deemed to be unfair and it was made clear that both parties being on an equal footing would be binding themselves to contract terms. The claimants case was dismissed on the grounds that the £3000 was a penalty charge and not a genuine pre-estimate of loss and therefore unenforcable.

terms posted

I have attached the contract - This is the only contract text - there are no supplements. contract.pdf

Several months ago I was asked to assist a small business owner who had signed a contract with Phoenix Business Agents Limited, a company that offers to sell your business for a fee. The business owner had paid a deposit of £1000 and agreed to pay £6500 if they managed to sell his business in 6 months. He was told that if they failed in the time period he could request a full refund. After six months of no interest from buyers and no real evidence of this companies efforts to promote he withdrew from the contract in writing. The problem came when he looked more closely at the contract. The contract is by OFT guidance, very unfair. It states in complex terms that if you cancel in the first six months you will pay £3000 but in a further clause in small print it states that if you cancel after the six months you still pay £3000. This company have the deal nicely put together. If you don't cancel then they have sole sellers rights and get to keep your £1000 deposit - so your fully locked in. After posting a on few web sites I have had a number of owners contacting me who have either fallen into the trap already or have managed to avoid it by reading the emails. My research has found that this company are a franchise covering the whole of the UK and therefore all my contacts are dealing with different company directors. It would be really good if we could get a further web entry on this site for those who are searching for what is rather limited info on this company. The only work this company have to do is get you to sign their contract. I have a court case coming up against one of the franchise companies in the next few weeks and can post contracts and other material after that date.

Case relisted without sanction - so here we go again!!!!