untitled

Credit transactions 423

Neither the Sale of Goods Act nor the Supply of Goods and Services Act apply to pledges,
but the Consumer Credit Act does apply if the agreement is a regulated agreement.
Table 16.1 gives an overview of the different types of credit transactions.

Creditor and

supplier the

same person?

Does customer

get immediate

ownership of

the goods?

Which statute

implies term as

to satisfactory

quality?

Does Consumer

Credit Act

apply?

Loan to buy

goods

No

Not

applicable

Not

applicable

Yes, if the agreement is a regulated agreement

Goods on HP

(triangular

transaction)

No

No

SGITA 1973

Conditional

sale (if not

triangular

transaction)

Yes

No

SGA 1979

Credit sale

of goods

Yes

Yes

SGA 1979

Hire/rent

of goods

Yes

No

SGSA 1982

Table 16.1Rights of ownership and statutory provisions governing credit transactions

The Consumer Credit Acts 1974 and 2006

The Consumer Credit Act 1974, as amended by the Consumer Credit Act 2006, gives
important rights to creditors, but only if the credit is given under a regulated agreement.

The definition of a regulated agreement

Figure 16.2 shows how to decide whether or not a credit agreement is a regulated agree-
ment. As the diagram shows, a contract of hire can be a regulated agreement.
There are several points to make about the diagram:

(i) The parties might make a regulated agreement without intending to do so. In Dimond
vLovell (2000)the House of Lords held that a form of short-term car hire, which was
available to motorists whose cars had been damaged by the fault of another, was a
consumer credit agreement because the hirer did not have to pay anything when the
period of hire ended. The hirer had been given credit because she had been given the
hire of the car, and if there had been no credit she would have been required to pay for
it during the contract of hire or at the end of that contract. The House of Lords held that,
generally, credit will have been provided whenever a contract gives a debtor the right, or
the option, to pay at a later time than would have otherwise been the case. However,
in commercial contracts payment might be deferred for reasons other than providing
credit, for example as security for the performance of some other obligation by the
creditor.

(ii) Living people and partnerships with two or three partners are regarded as individuals,
but companies, LLPs and partnerships with four or more partners are not. So when a
company is given credit the agreement cannot be a regulated agreement.