Unregulated Credit Agreements: When is it safe for a lender to rely upon the business purpose exemption? – 11 Stone Buildings

Posted July 27th, 2015 in consumer credit, loans, news by sally

‘Consumer credit legislation requires lenders to negotiate a minefield of regulation and formalities. Even small errors in form, content or procedure can render a loan contract unenforceable and prevent a lender recovering the sums advanced. In the circumstances it is understandable that the exemptions within the legislation, such as that created by s.16B(1) of the Consumer Credit Act 1974 are often invoked to avoid the rigours of regulation. However, this approach can give rise to new risks as demonstrated in Woolsey v Payne [2015] EWHC 968 (Ch) [2015] All ER (D) 24 (May) and Wood v Capital Bridging Finance Limited [2015] EWCA Civ 451. Sarah Clarke, counsel in Woolsey and Payne, suggests how the lawyers and lenders should modify their approach to this exemption in light of these decisions.’

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11 Stone Buildings, June 2015

Source: www.11sb.com