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EQUAL LIABILITY (s.75)

Equal liability is the joint liability of the creditor for breaches by a supplier. It is easy to forget the restrictions on the effect of this Section, so be careful! Section 75 provides that :

1. If the debtor under a debtor-creditor-supplier agreement falling within Section 12(b) or (c) has, in relation to a transaction financed by the agreement, any claim against the supplier in respect of a misrepresentation or breach of contract, he shall have a like claim against the creditor, who, with the supplier, shall accordingly be jointly and severally liable to the debtor.
2. Subsection (1) does not apply to a claim - (a) under a non-commercial agreement, or (b) so far as the claim relates to any single item to which the supplier has attached a cash price not exceeding £100 or more than £30,000.

The key points, for Section 75 to apply to an agreement, are:

• it must be a D-C-S agreement,
• the cash price of any specified single item must be more than £100 and no more than £30,000, and
• there must be a potential claim against the supplier.

Note that Section 75 does not apply in the case of hire-purchase, conditional sale and credit sale agreements. In these, the owner/seller is the creditor, the supplier merely acting as his agent. It follows that, in general, there can be no claim for breach of contract or misrepresentation against the supplier, since such action would have to be taken against the creditor. Section 75 is therefore irrelevant, and claims fall automatically against the creditor.

It also does not apply in the case of debit cards - where recovery of a payment is made almost immediately, or at least within one month as a single payment. These cards are not regarded as "credit" and are therefore exempt from the Consumer Credit Act. However, there are limited rights for holders of

• Visa Connect and Visa Delta cards, where there is non-supply or fraud, and
• Maestro and Switch cards for fraud only.
• In case of difficulty over claims in such cases, it may be worth trying the Financial Ombudsman Service