Need more grounds than just the penalty clause arguement....

[Russe11]

"The courts are normally pre-disposed where possible to uphold contractual terms that have been freely agreed between the parties. Thus, other than in the most exceptional of cases, the courts are unlikely to find a liquidated damages clause to be a penalty clause. Consequently, other than in the most blatant of cases, it would be foolish to rely on overturning a liquidated damages clause on the basis that it was indeed a penalty clause, after the contract has been entered into."

 

 

So what other grounds have they done wrong ?

 

Though is it best to just state the reason is, I found out the reports show the banks made 3 billion from penalty clauses there fore they must be overcharging ! state the obvious, but would it hold up..... I'm trying to see how strong I the case really is....

 

Is it garenteed that if my case is such on the penalty clause rule, that the court will have to ask the bank how it comes to these figures ?

[BankFodder]

Please could you give your sources when you quote them. That way we can understand the context in which the statement to which you refer was made.

 

However it seems to me that the important qualifier in your quotation is "freely agreed between the parties".

 

The law relating to penalty clauses has developed to give some protection against dominant contracting partners.

Where there has been free negotiation bewteen the parties, then this is less likely to be so.

Where one party imposes his standard form contract up on a consumer - such as is the case of the banks, then it can never be said that the contract has been freely agreed.

It can not even be said that the customer had the choice of banking elsewhere on better terms, because all of the banks operate in broadly the same way.

 

Because of this, the quote you give is most unlikely to be applied against a customer who takes on his bank.

[Russe11]

full article found here....

 

http://www.alway-associates.co.uk/legal-update/article.asp?id=82

[rbrears]

Of limited relevance in my opinion.

 

The contract in the case is not a consumer contract, but one negotiated at arms length between two commercial organisations. As noted above a standard form contract of a bank is not considered to be freely entered into with its customer.

 

The predispositioon of the court to uphold such damages clauses stems from the ability of the parties to agree on an equal footing about the terms of the contract. The Unfair Terms in Consumer Contracts Regulations quite clearly state that contracts between banks and customers "shall always be regarded as not having been individually negotiated" - See Regulation 5 (2) and, in respect to charges, Schedule 2 1(e).

 

Hope this helps.

[Russe11]

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