cross-posted from: https://linkage.ds8.zone/post/341870
I signed an agreement with a creditor that obligates me to pay them using a bank inside the country. This was fine initially but then I moved out of the country and the acct was closed. Other banks will not open an account for me and the creditor refuses cash. So the creditor is treating me like a non-payer to a quite harsh extent.
I have over-simplified here but I just want to know very generally what the common practices are around the world for contract law situations where someone without much bargaining power signs a contract that obligates them to do something that’s only achievable if other 3rd-parties agree to serve them, and then those other 3rd-parties later refuse.
BTW, I am not interested in advice on situational hacks and angles like “find a friend to pay for you”. I want to know how courts treat the situation when all options have failed. Are people typically held accountable for agreeing to something which relied on actions of others?
(the situation is not in the UK but I am still interested in answers as to how these kinds of situations are dealt with in the UK)
As I understand it, you were not compelled to sign the contract, so did so of your own free will, and likewise took an action, namely leaving the country, of your own free will that directly lead to you being in breach of contract by breaching your contract with your bank.
None if that is the fault if the party you had a contract with, so you’ll likely be considered at fault. It is up to you to remedy the situation, deal with any penalties you’ve incurred and return to compliance with the contract.
I don’t know which country you are in, but you may have luck with an international bank that has branches in your current country and your original one.
You’re probably right. But certainly I have seen laws that push back in situations where the party with the greatest amount of power and privilige subjects the other party to various factors outside of their control, where the law counters that to mitigate unfairness.
The GDPR exhibits this with a “fairness” clause, which the EDPB reflects on as follows:
EDPB interpretation of fairness clause
- Non-exploitation – The controller should not exploit the needs or vulnerabilities of data subjects.
- Power balance – Power balance should be a key objective of the controller-data subject relationship. Power imbalances should be avoided. When this is not possible, they should be recognised and accounted for with suitable countermeasures.
- No risk transfer – Controllers should not transfer the risks of the enterprise to the data subjects.
- Respect rights – The controller must respect the fundamental rights of data subjects and implement appropriate measures and safeguards and not impinge on those rights unless expressly justified by law.
- Ethical – The controller should see the processing’s wider impact on individuals’ rights and dignity.
None of that applies to my non-GDPR situation, but just an example of law that tries the shift burden of risks back onto the party with the most power. Labor law often has rules to protect workers from becoming subject to risks and factors outside of their control. In my case I need to look more at credit and debt laws, where the creditors tend to have disproportionate power. The UK’s legal tender law is one such tool to relieve debtors from the disempowerment of forced banking (which is weak where I am but there may be another mechanism).
took an action, namely leaving the country, of your own free will
It’s perhaps worth noting the Universal Declaration of Human Rights art.13:
- Everyone has the right to freedom of movement and residence within the borders of each State.
- Everyone has the right to leave any country, including his own, and to return to his country.
That does not necessarily contradict anything you said, but I think it is a bit harsh for a creditor to make debtors choose between their human rights and satisfying their contractual obligations.
The clauses you quoted from the GDPR refer to data processing, not contract law in general. I understand your point about a power imbalance, but I doubt any court would see requiring a bank account in the country to be particularly onerous as the situation was entirely within your control. I doubt it would be seen as an imposition on your rights either as you are still free to move, you just needed to arrange appropriate banking first. As I mentioned, take a look for an international bank, they may be able to help.
You’re going to have to find out about the law in your country, not anywhere else. If you try the argument “but it works this way in the UK”, the court’s response will be “cool story, but this isn’t the UK”. Talk to a lawyer, not us.
The post was composed with the understanding that different countries have different laws. It is not an attempt to practice UK law outside of the UK. It’s to get a general grasp on core legal theories and common practices and concepts.
For example, I learnt basics of contract law from Nolo. Nolo gives a good basic understanding of legal concepts and norms. Of course Nolo is not an all encompassing reference and does not cover variation from one jurisdiction to the next in detail. But I find that what I have learned from Nolo is very similar concepts span many different jurisdictions. You can imagine that if a law school were to only teach legal concepts that apply specifically in the location of the school, it would be a school of low standards, where lawyers could not easily adapt to other jurisdictions.
I don’t even know if the legal scenario at hand has a wild variation across jurisdictions. Some situations have more variation than others. I’m in the very early stages of trying to get a grasp on what question to ask. I don’t even speak the language of the laws that apply to me, so without even knowing the common concepts for the situation, searching for the relevant statutes is quite an undertaking. If there were some kind of latin jargon to describe the situation of being bound by the action of non-contracting actors, even that would help in finding my way to the precise statutes (or case law) that I need.
Talk to a lawyer, not us.
I qualify for a free lawyer since I have no income. But the agency that allocates pro bono lawyers has very narrow verification requirements (in short, I must have a certificate that proves I am in in the unemployment system). So because I am not in that system, I fall through the cracks. Which means I have to work pro se in this case.
I get it, I don’t want you to think I’m trying to dismiss you. The reason I say to consult a lawyer in your own country is not just because laws are different in different places, because yes small differences between countries can make a big difference, but law is interpreted, and the culture of the country has an impact on how the law will be interpreted. A good lawyer understands not just how to interpret the law, but how to argue that interpretation in the context of their country’s legal system. You might be able to find one who would work pro bono; if your courts are anything like the US or UK, pro se is an expensive way to guarantee a loss.
If you know a little about contract law then you should also know that if the clause about paying from a local bank was in the contract, then there’s very little you can do to get out of it. You agreed to the terms; it was on you to uphold the terms of the deal you made. Anything that’s going to get you out of that is going to be reliant on the specifics of the law your country.
As I understand it. Legal tender in the UK means you cannot refuse cash for any debt.
I suspected that. It is interesting to know indeed. That is also the case in the US, where contracts cannot trump legal tender law.
But I believe I’m in a cash-unfriendly country where legal tender does not distinguish debts from points of sale and contracts trump law in this case, so I am still mainly interested in knowing the very general legal theories in contract law for situations where someone is bound by the actions of those not a party to the contract.
Another example: what if a contract required someone to obtain and maintain a mobile phone service, then later in the contract SIM registration is implemented and the obligated party cannot get service because their ID card is rejected or they don’t meet whatever KYC requirements? Hypothetical, but I am increasingly finding myself in situations where a supplier of some kind forces me to be served in some way by some other service.
Really seems off that I can be contractually obligated in a way that requires action by others. Fair enough if I have to make an effort to get served by a 3rd party, but when the effort fails I’m very annoyed that I might be accountable for the consequences.
Guess as IANAL. But in your described situation in the UK, the contract would still be valid. As you, leaving the nation of its jurisdiction was entirely your choice/responsibility.
But if the banks closed down, or it was actually choices of the bank/3rd party. Rather than your actions and the bank’s legal jurisdiction. Then the question would require a court to decide unless parties are propared to compromise.
You will generally find banks in the UK have rules over what type of customers they are allowed to accept. Depending on the banking authority, they are under. (IE investment vs consumer banking). And placing yourself in a situation where you’re failing to meet those rules. Would be considered your responsibility, not the 3rd party/bank. The same would be true of any other 3rd party agreement. Unless the agreement is illegal. (IE legal tender etc) Your ability to qualify is seen as your actions.
Legal tender also has some hoops to jump through, you can’t just scream legal tender and throw physical money at your creditor¹. If I remember rightly you need to lodge it with the courts and then it basically prevents you from being sued as the money is there to pick up. Or rather they can begin the process but it is resolved and the court won’t assist them in recovering it in other ways.
Of course I don’t think it does anything to protect your credit rating, though the documents might help you dispute the record and get it cleared.
- Well, you can, but it probably won’t help.
you can’t just scream legal tender and throw physical money at your creditor¹.
IIRC in the US it’s written simply that if you leave legal tender in the creditor’s possession, your debt is reduced by that amount regardless of what they do with it. But of course gathering evidence in that case can be dicey.
If I remember rightly you need to lodge it with the courts and then it basically prevents you from being sued as the money is there to pick up.
There was a guy in Germany who fought the forced use of electronic payment for radio licensing fees that way. He escrowed it in a blocked account so that the gov could not claim he was just looking to evade the fees. It seems like a good approach.
