The court discussed the historic availability of set-off in an insolvency: ‘By the turn of the [20th] century, therefore, the authorities showed that debts whose existence and amount were alike contingent at the date of the receiving order, and claims to damages for future breaches of contracts existing at that date, were capable of proof and, being capable of proof, could be set off under the section provided that they arose from mutual credits or mutual dealings. The only requirement was that they must in fact have resulted in quantified money claims by the time the claim to set off was made.’ The conventional contractual position in a typical credit card use, involves three (or where there is an acquirer in fact four) separate contracts. The contract of supply remains a contract of sale for a price, even where the buyer chooses to satisfy that price by means of a card. Payment by card is not conditional upon anything that may or may not happen in the chain of separate contracts between the buyer, the card-issuing company and the store, since ‘the general understanding of the public’ is ‘that when a customer signs the voucher he has discharged his obligations to the supplier and that he pays for the goods or services he has obtained when he pays the card-issuing company’.
Millet J
[1987] Ch 150
England and Wales
Citing:
Cited – Jones v Mossop 1844
Mr Reed held a bond for pounds 500 given by Mr Jones, who had also guaranteed some loans to Mr Reed by third parties. Mr Reed died insolvent and Mr Jones was called to pay pounds 377 to the lenders under the guarantees. When Mr Reed’s assignee Mr . .
Cited – In re Moseley-Green Coal and Coke Co Ltd, Ex parte Barrett 1865
Mr Barrett owed the company money on his partly-paid shares for which calls were made after it went into insolvent liquidation. He had also guaranteed the company’s liability for the purchase price of a coal mine, for which the vendor held security . .
Cited – In re Asphaltic Wood Pavement Co Ltd 1885
. .
Cited by:
Cited – Secretary of State for Trade and Industry v Frid HL 13-May-2004
The company went into insolvent liquidation. The secretary of state was to make payments to employees and there were other state preferential creditors. At the same time a refund of VAT was due from the Commissioners of customs and Excise.
Cited – Revenue and Customs v Debenhams Retail Plc CA 18-Jul-2005
The store introduced a system whereby when a customer paid by credit card, the charges made to them for card handling were expressed as a separate amount on the receipt. The store then said that VAT was payable only on the net amount allocated to . .
Cited – Banco Santander Sa v Bayfern Ltd and Others ComC 29-Jun-1999
The court was asked whether the risk of fraud on the part of the beneficiary of a confirmed deferred payment letter of credit is to be borne by the issuing bank (and so possibly the applicant for the credit) or by the confirming bank where the . .
Cited – Office of Fair Trading v Abbey National Plc and seven Others ComC 24-Apr-2008
The Office sought a declaration that the respondent and other banks were subject to the provisions of the Regulations in their imposition of bank charges to customer accounts, and in particular as to the imposition of penalties or charges for the . .
Cited – Tam Wing Chuen v Bank of Credit and Commerce Hong Kong Ltd PC 1996
The Board considered a banking transaction and the application of a chargeback by the bank, under which a loan was made only after a deposit by a third party against which it was secured, and particularly in the context of the insolvency of the bank . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Consumer
Leading Case
Updated: 11 November 2021; Ref: scu.196878