PCH - was an enforceable contract made

[dn719]

Hi

appreciate if a legal mind can clear up if I'm in a legally enforceable contract with a credit broker, for a PCH.

TLDR: credit broker made an offer. I accepted. I did not pay their fee, and I want to cancel. They say I have to pay penalty fee £350, or it's the bailiffs. Do I?

Longer version:
So I found a PCH lease deal through a broker. They sent over a quote, with attached T&Cs. I provided electronic signature.

They send reply, saying "order accepted, please pay fee to proceed".

I do not pay fee (for reasons).

Fast forward three weeks, CV19 happens, I don't want to proceed with PCH. Email them to cancel. They say "Fine, pay the penalty (£350), as per T&C".

The T&Cs (below) say that the order is "an offer", "subject to written acceptance...and payment..of holding deposit".
It also says no cancellation without written agreement...pay £300+VAT.

OK, here's my amateur legal bit, looking for advice.
My understanding is an enforceable contract needs all of (1) offer, (2) acceptance (3) "consideration".
In this case, I agree there is (1), and (2). But as I never replied to their email that said "order accepted, pay broker fee £200", and I never paid the £200, there is no consideration, and therefore no contract, and therefore they can't make me pay a penalty.

if I'm wrong, fair enough, but I'd prefer not to drop £350 right now.

T&Cs also say they'll bring in a debt agency for non payment of the penalty; if they play hardball, how can I prevent that?

Thanks in advance.

27. Your order of a motor vehicle from our website or other direct communications with you is an offer by (Broker). All orders are subject to formal written acceptance by us, the stock availability of the motor 
vehicle concerned, price changes, and the payment by you of a holding deposit (if applicable) in accordance with 
our written acceptance of your order. Credit approval does not guarantee the allocation of a vehicle.
28. If the motor vehicle you have ordered is not available, we will contact you by email or telephone to suggest 
possible alternatives. If the motor vehicle is available and we accept your order then we will contact you to 
confirm the acceptance of your order.
29. No order which has been accepted by us may be cancelled by you except with our written agreement.(Broker) will charge a cancellation fee of £300.00 +VAT. Please be aware that the supplier may also 
charge a separate fee in respect of cancellation. The supplier will notify you of the amount and presence of any 
cancellation fee. In the event any third party suppled accessories or conversions have been ordered, the 
associated costs will be passed on to you. In the event that any cancellation fee or associated costs of the order 
cancellation are not paid,(Broker) reserves the right to engage a third-party debt collection 
agency to recover this fee. This may result in additional charges being incurred.

[IJWS15]

IANAL but a Commercial Manager

Their terms say subject to payment of deposit (if applicable)

They asked for deposit before proceeding indicating that deposit is applicable

I don't think the contract has been formed.

Consideration could be them ordering the car, even initiating their paperwork to order the car.

Edited by IJWS15 on Friday 20th March 10:55

[mr rusty]

I tend to agree with IJWS15, but it could maybe be read either way.

However, it's not "pay or it's the bailliffs". It's pay or it's a disputed debt. Debt collectors have no power without court orders, so you can send any debt collectors away with a flea in their ear and say "see you in court". Bailliffs with powers need court orders.

It's up the Co if they think they have a strong enough case to pursue and up to you to defend if you think you do. Remember, you cannot have a CCJ recorded against you UNLESS you both lose in court AND then don't settle the debt within a month.

[Mrr T]

If this was all done on line or over the phone would it not be covered by Distance Selling legislation?

[irc]

I am not a lawyer but my understanding is that this sum of £350 will go to the small claims track. A company taking a consumer to court needs to bring proceedings in the consumers local court. They can't recover their solicitors cost but only the £350 and some court fees. If the case is lost and the award paid there is no CCJ. No requirement to hire a lawyer to defend.

So, the worst downside is a a few hundred quid and a day in court, and the time to fill out and return the court paperwork.

So either the company decideds it won't spend time and money chasing a dodgy £350.

Or it pursues it and loses at court.

Or it goes to court and wins.

Looks like good odds to me but if it was me I'd get some advice first before deciding. Legal expenses cover on house insurance? Citizens Advice. A legal forum rather than a car forum?

Apart from anything else if a lawyer or the citizeens advice draft a written response it may get the claim dropped more readily than a home drafted letter.

[Roger Irrelevant]

I wouldn't hold out much hope on the consideration point, a promise to pay is just as valid so far as the law is concerned as actually paying there and then. I don't see how the 'subject to deposit' wording really helps either- all that does is give the broker the chance to get out of the contract if you haven't paid the deposit, it doesn't mean a contract isn't formed until you pay it.

I would say that the Consumer Contract regs and the 14 day cooling off period will ride to your rescue but if as you say the contract was concluded three weeks ago they won't be any help.

The other thing that springs to mind is whether you having to pay £350 is a true 'penalty' - i.e. is an amount that is excessive in comparison to the loss that the broker has suffered by your cancellation. Tbh that would be a tough one to prove - it's a pain alright but it doesn't seem obviously excessive.

I think that legally you're on a sticky wicket, sorry to say.

[theboss]

I’d ignore them for now. They will probably go to the wall long before any small claim could be progressed.

[anonymous-user]

IJWS15 said:

IANAL but a Commercial Manager

Their terms say subject to payment of deposit (if applicable)

They asked for deposit before proceeding indicating that deposit is applicable

I don't think the contract has been formed.

Consideration could be them ordering the car, even initiating their paperwork to order the car.

Edited by IJWS15 on Friday 20th March 10:55

The OP was wondering about the consideration moving from him, not from the other party.

The OP made a contract. As correctly noted above, a promise to pay, or to do something else, can be consideration.

As also noted above, the OP may be able to avoid liability because of consumer rules. As also noted, the likelihood of the OP being sued on this is not high.

IAAL but IANYL.