The prescribed terms

ScalesA properly executed agreement should contain all the prescribed terms. The prescribed terms are set out in Schedule 6 of the Consumer Credit (Agreements) Regulations 1983.

The regulations state that the agreement must contain:

A term stating how the debtor is to discharge his obligations under the agreement to make the repayments, which may be expressed by reference to a combination of any of the following:

(a) number of repayments;
(b) amount of repayments;
(c) frequency and timing of repayments;
(d) dates of repayments;
(e) the manner in which any of the above may be determined, or in any other way, and any power of the creditor to vary what is payable.

Credit amount

For fixed sum credit such as loans, the agreement must contain:

A term stating the amount of the credit

For running account agreements such as credit cards, the agreement must contain:

A term stating the credit limit or the manner in which it will be determined or that there is no credit limit.

Amount of credit

1. Restricted-use debtor-creditor-supplier agreements for fixed-sum credit:

(a) to finance a transaction comprising the acquisition of goods, services, land or other things specified in the agreement or identified and agreed on at the time the agreement is made;
(b) under which the total amount payable by the debtor is not greater than the total cash price; and
(c) under which there is no advance payment.

A term stating the amount of the credit, which may be expressed as the total cash price of the goods, services, land or other things, the acquisition of which is to be financed by credit under the agreement.

2. Agreements for fixed-sum credit not falling within paragraph 1:

A term stating the amount of the credit.

Credit limit

3. Agreements for running-account credit:

A term stating the credit limit or the manner in which it will be determined or that there is no credit limit.

Rate of interest

4. Agreements for:

(a) running-account credit; and
(b) fixed-sum credit falling within the exceptions in paragraph 9(a) to (c) of Schedule 1 to these Regulations.

A term stating the rate of any interest on the credit to be provided under the agreement.

Repayments

5. Consumer credit agreements:

A term stating how the debtor is to discharge his obligations under the agreement to make the repayments, which may be expressed by reference to a combination of any of the following:
(a) number of repayments;
(b) amount of repayments;
(c) frequency and timing of repayments;
(d) dates of repayments;
(e) the manner in which any of the above may be determined;

or in any other way, and any power of the creditor to vary what is payable.

6. Consumer hire agreements:

A term stating how the hirer is to discharge his obligations under the agreement to pay the hire payments, which may be expressed by reference to a combination of any of the following:

(a) number of payments;
(b) amount of payments;
(c) frequency and timing of payments;
(d) dates of payments;
(e) the manner in which any of the above may be determined;

or in any other way, and any power of the owner to vary what is payable.

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