In July 2009, the Office of Fair Trading welcomed a landmark ruling that the use of unfair terms that Foxtons Limited (letting agents) in their contracts with landlords.
OFT v Foxtons
David Rhodes of Horizon Business Agents writes about the case on his blog "In my opinion the agreement that the seller should avoid is the one where there is both an upfront fee and a severance/cancellation fee, especially where the agent is operating under a sole selling rights agreement. There are agents such as RTA Business Consultants who operate such an agreement."
It seems that those of us caught out by RTAs unfair agreements must raise our profile.
Perhaps all of those business owners with a story to tell should contact the Trading Standards Office local to RTA in Stockport? Details below.
Stockport Metropolitan Borough Council
Trading Standards Service
Environment & Economic Development Division
Stopford House
Piccadilly
Stockport
SK1 3XE
Telephone: 0845 644 4301
Fax: (0161) 474 4369
E-mail: trading.standards@stockport.gov.uk
Stockport Trading Standards
Thursday, 25 February 2010
RTA cold calling methods making business owners unhappy
The whocallsme website has been inundated with updates about RTA's unsolicited calling and their use of autodiallers.
Some call receivers have requested that RTA remove their telephone numbers from their lists as many as 17 times!
Are you, perhaps, becoming a nuisance Mr O'Reilly?
http://whocallsme.com/Phone-Number.aspx/08450510598
Some call receivers have requested that RTA remove their telephone numbers from their lists as many as 17 times!
Are you, perhaps, becoming a nuisance Mr O'Reilly?
http://whocallsme.com/Phone-Number.aspx/08450510598
Federation of Small Businesses list RTA as a 'scam'
The Federation of Small Businesses appear to be warning their members about using RTA (Business Consultants) Limited - they have RTA listed in their 'scams library'!!
RTA Business Transfer Agents
It is claimed that small businesses are losing large sums of money by attempting to sell their businesses through RTA (Business Consultants) Ltd. In some cases small businesses are paying thousands of pounds. After a time period as agreed with RTA, e.g. 5 months, small businesses are finding that they have had no potential buyers and that they are entitled to no refund.
UPDATE : 29th March 2010
Peter Scargill of the FSB has confirmed that they removed the listing 'for now' from their website following correspondence from RTA. Is this another action of bullying and the threat of legal action by RTA?
RTA Business Transfer Agents
It is claimed that small businesses are losing large sums of money by attempting to sell their businesses through RTA (Business Consultants) Ltd. In some cases small businesses are paying thousands of pounds. After a time period as agreed with RTA, e.g. 5 months, small businesses are finding that they have had no potential buyers and that they are entitled to no refund.
UPDATE : 29th March 2010
Peter Scargill of the FSB has confirmed that they removed the listing 'for now' from their website following correspondence from RTA. Is this another action of bullying and the threat of legal action by RTA?
Wednesday, 24 February 2010
The RTA Sales Pitch - Penman & Sommerlad investigation
The Mirror investigators, Penman and Sommerlad, went undercover to record the RTA sales pitch given by the RTA rep Andy Dearing.
You can read the article here - http://blogs.mirror.co.uk/investigations/2009/12/we-nail-that-rta-sales-pitch.html
You can read the article here - http://blogs.mirror.co.uk/investigations/2009/12/we-nail-that-rta-sales-pitch.html
Tuesday, 23 February 2010
Consumer protection regulations
Gill Drapers case concludes that, as this is a contract not associated with your normal business-as-usual practice it is therefore a consumer contract and not a commercial contract. Therefore consumer contract law should apply.
Amongst other things, the Consumer Protection (Cancellation of Contracts Concluded away from Business Premises) Regulations 1987 apply to a contract made:-
during an unsolicited visit by a trader-
a) to the consumer's home or to the home of another person; or
b) to the consumer's place of work
So, like a lot of our circumstances, where RTA contacted us via telephone out of the blue and then set up an appointment for their sales representative, this constitutes an unsolicited visit by a trader.
The Regulations state:-
"No contract to which these Regulations apply shall be enforceable against the consumer unless the trader has delivered to the consumer notice in writing in accordance with paragraphs (3) and (4) indicating the right of the consumer to cancel the contract within the period of 7 days"
This means, if RTA did not give you notice in writing of your right to cancel then they cannot enforce the contract.
Amongst other things, the Consumer Protection (Cancellation of Contracts Concluded away from Business Premises) Regulations 1987 apply to a contract made:-
during an unsolicited visit by a trader-
a) to the consumer's home or to the home of another person; or
b) to the consumer's place of work
So, like a lot of our circumstances, where RTA contacted us via telephone out of the blue and then set up an appointment for their sales representative, this constitutes an unsolicited visit by a trader.
The Regulations state:-
"No contract to which these Regulations apply shall be enforceable against the consumer unless the trader has delivered to the consumer notice in writing in accordance with paragraphs (3) and (4) indicating the right of the consumer to cancel the contract within the period of 7 days"
This means, if RTA did not give you notice in writing of your right to cancel then they cannot enforce the contract.
The 'contra proferentem' rule
Contra proferentem is a rule of contractual interpretation which provides that an ambiguous term will be construed against the party that imposed its inclusion in the contract – or, more accurately, against (the interests of) the party who imposed it. The interpretation will therefore favor the party that did not insist on its inclusion. The rule applies only if, and to the extent that, the clause was included at the unilateral insistence of one party without having been subject to negotiation by the counter-party. Additionally, the rule applies only if a court determines the term to be ambiguous, which often forms the substance of a contractual dispute.
What this means is, where RTA (or any other entity issuing a consumer contract) rely on a clause which is deemed ambiguous (ie they think it says one thing but it can be read as something else) then the clause will be deemed to read in the favour of the other party (ie against RTA)
What this means is, where RTA (or any other entity issuing a consumer contract) rely on a clause which is deemed ambiguous (ie they think it says one thing but it can be read as something else) then the clause will be deemed to read in the favour of the other party (ie against RTA)
The case of Draper v RTA at Huntingdon Court
On 16th September, RTA went to court with Gill Draper (see Gill's Story by clicking on the link under Information in the left hand menu) after initially claiming £20,000 + VAT in 'lost commission' due to Gill withdrawing from the signed agreement and then deciding to reduce this to £5000 in order to use the Small Claims Court.
Gill's barrister, Tim Williams, put forward the case that, as Gill was not in business to buy and sell businesses she was, therefore, not working in her normal business-as-usual manner and that made the contract a consumer contract rather than a commercial contract - and therefore subject to consumer contract regulations.
The Consumer Contract Regulations 1999 prevents terms which cause significant imbalance in the parties rights and intentions. As RTA intend to get paid, regardless of their performance or delivery, this shows a significant imbalance of rights.
Gill won her case.
RTA appealed and went back to court on 28th October 2009 at Peterborough County Court but the appeal was dismissed.
Gill's barrister, Tim Williams, put forward the case that, as Gill was not in business to buy and sell businesses she was, therefore, not working in her normal business-as-usual manner and that made the contract a consumer contract rather than a commercial contract - and therefore subject to consumer contract regulations.
The Consumer Contract Regulations 1999 prevents terms which cause significant imbalance in the parties rights and intentions. As RTA intend to get paid, regardless of their performance or delivery, this shows a significant imbalance of rights.
Gill won her case.
RTA appealed and went back to court on 28th October 2009 at Peterborough County Court but the appeal was dismissed.
Friday, 1 January 2010
Gill's Story
Me and my partner own a pub in Cambridgeshire. On the 23rd of November 2006 we asked for a rep from rta to come to see us, we had flown in from Spain as the people renting the pub wanted to come out so we decided to sell it.The salesman arrived and the first thing he said was I need an upfront fee. We said we can,t give you anything so he said he would up the withdrawel to £6000 + vat. We did ask him what this involved and he said as long as you do a year you don,t pay the withdrawel fee. The money is just to cover there costs.I myself initialed the changes on the contract but my partner didn,t. I think this is why they only took me to court. They valued our pub at £470,000 which we thought was excessive it is wet sales only it has a three bedroom apartment upstairs and a beer garden and car park.We reckon it was £100,000 to much, we had one viewing in the twelve months and they had to get our number from Bt because rta didn,t send them any details so they stopped asking and got the number themselves. After that we had no more phone calls so in October 2007 we sent a registered letter informing them that as from the 23rd of November we no longer required them to advertise our property. They sent us a letter asking for £6000 + vat about a month later which we ignored because the rep told us if you do twelve months you don,t pay. They then sent us another saying they had passed our debt onto a debt collector who sent us a letter asking for £7400, which we ignored. In January 2008 rta rang us and said they had a Mr Johnson who wanted to look round the pub. I told them that he couldn,t because we were no longer on there books, the girl told me yes you are as you havent paid the withdrawel fee. I told her I wasn,t paying because of what the rep said and she said she would contact there legal department, so I said carry on. We then received about a month later a bill for £20,000 + vat, because we had stopped them earning there commision. When I was back in England I contacted our solicitor who said he had to read the contract four times before he understood it and that we shouldn,t have signed it. Then rta decided to take us to court in the small claims which is no more than £5000. The first hearing had to be adjourned in front of Judge Farquot because our solicitor forgot to tell us we had to be there and we were in Spain. Rta tried to claim £1000 expenses which the judge said was excessive and awarded them £200.
We went back to court the 16th of September in front of judge Dak at Huntingdon county court, when we won using the 1999 consumer protection act as a defence. They appealed and on the 28th of October we went Peterborough county court in front of judge De Mille,we won and were only awarded £80 costs for one flight for me from Spain. I have now received the letter with the cheque from them and have framed it. We have suffered for three years with this and now its time for other people to use our defence and make them pay. I will do everything I can to help other people to take them to court, I have already had many people contact me for information.
You can see Gill's full details of her case here
We went back to court the 16th of September in front of judge Dak at Huntingdon county court, when we won using the 1999 consumer protection act as a defence. They appealed and on the 28th of October we went Peterborough county court in front of judge De Mille,we won and were only awarded £80 costs for one flight for me from Spain. I have now received the letter with the cheque from them and have framed it. We have suffered for three years with this and now its time for other people to use our defence and make them pay. I will do everything I can to help other people to take them to court, I have already had many people contact me for information.
You can see Gill's full details of her case here
Paul's Story
Went to RTA in June 2006, signed and paid a fee.
After 1 year, they had sent around just two buyers.
After this year had passed I decided they had had their chance. I ‘phoned them and said I didn’t want to use them any more.
I followed this up with a letter sent Recorded Delivery.
I used another estate agents
A month later, received a call from RTA wanting to send around a potential buyer. Told them I had cancelled with them. They apologised.
Another month later I receive a further call from them again wanting to send around a potential buyer. Told them this is the third conversation I had with them, could they please update their records. Person from RTA was incredibly rude and I ended up putting the ‘phone down on them.
I sold the business in December 2007
That was the end of it ... or so I thought!
Went to my bank a month or so ago to enquire about a loan. Was told by them I had something ‘adverse’ on my credit file. Further investigation revealed that RTA had issued a summons against me in April 2008 for about £3,000. (It was sent to an address I was not living at (and apparently returned back to the court marked “not known at this address”))
I am sending back a request to have judgement set aside, but will be seeking further legal advice.
Yesterday, I got home to find a bailiff had visited my house!
** FOLLOW UP - 23rd July 2010 **
After 1 year, they had sent around just two buyers.
After this year had passed I decided they had had their chance. I ‘phoned them and said I didn’t want to use them any more.
I followed this up with a letter sent Recorded Delivery.
I used another estate agents
A month later, received a call from RTA wanting to send around a potential buyer. Told them I had cancelled with them. They apologised.
Another month later I receive a further call from them again wanting to send around a potential buyer. Told them this is the third conversation I had with them, could they please update their records. Person from RTA was incredibly rude and I ended up putting the ‘phone down on them.
I sold the business in December 2007
That was the end of it ... or so I thought!
Went to my bank a month or so ago to enquire about a loan. Was told by them I had something ‘adverse’ on my credit file. Further investigation revealed that RTA had issued a summons against me in April 2008 for about £3,000. (It was sent to an address I was not living at (and apparently returned back to the court marked “not known at this address”))
I am sending back a request to have judgement set aside, but will be seeking further legal advice.
Yesterday, I got home to find a bailiff had visited my house!
** FOLLOW UP - 23rd July 2010 **
I contacted the bailiff to advise that I am applying to have judgement set aside (I would advise anyone to do this immediately. The Sheriff’s office agreed to hold off further action pending my request, the bailiff himself was a very nice chap who was very amenable.) Don’t be scared or intimidated by words like “Bailiff” or “Sheriff’s Office.” There are people behind these words simply doing their jobs.
I prepared and submitted my defence to the court using the information supplied by Paul and Gill Crane as a basis. I received a date to attend court (purely to deal with the aspect of having judgement set aside) and this was successful (RTA didn’t turn up.)
The court then copied me in on a letter they sent to RTA advising that if they wish to pursue their claim, they will need to resubmit it within fourteen days.
No response was received by the court so RTA were given a further seven days.
RTA failed to respond so their case has been dismissed completely! Another victory for the small business man!
Mal's Story
My husband and I have a greeting card shop. Someone from RTA called us in early January 2010 and as we'd been planning our retirement, we agreed to see one of their representatives on 26th January. The rep arrived and we discussed the sale in the shop, in between serving customers and trying to be discrete. The 'sell' was very low key. We suggested a price of £55000, and were told that their commission of £4000 would be added to that figure. My husband joked that £65000 would be better, and the rep said, 'Why not?' He even said we could add their commission on top if we wanted, but we felt that was going too far. I got the impression that if we had said we wanted £100,000, he would have agreed. He told us that part of the commission was due in advance - £1000 plus VAT - but we had no cheque book with us so it was agreed that we could send the payment the following day. The contract was not discussed in any detail, apart from the advance payment, the commission, and the fact that it was for 12 months. There was no mention of a cancellation fee of £500. A rather odd thing, in retrospect, was that the rep insisted that when we had viewings we should not try and sell the place ourselves, just show the people round and not discuss anything; if they asked questions we should refer them back to RTA.
My husband glanced at the contract before signing, but didn't read it fully, not realising that it continued over the page. When we got home, we read the contract properly and were shocked at the content, though it wasn't easy to understand - there was virtually nothing in there about what RTA would do to sell our property, only how much it would cost us if they didn't! Why on earth do they need a confidentiality clause, we wondered? Now we know.
We contacted our solicitor the following day and he advised us that the contract offended against the Unfair Terms of the Consumer Contract Regulations 1999. We wrote to RTA stating this fact, and offering them the £500 + VAT cancellation fee, on receipt of a VAT invoice, to terminate the contract. This was sent on 28th February by Recorded Delivery, as required by the contract.
A reply was received on 3rd February, and came from Mr O'Reilly himself who was 'bemused' at the contents of our letter. He stated, " .. we have been established for over 37 years and have always utilised this contract and never once in that period of time has it been established that it 'is against the Unfair Terms and Consumer Contract Regulations of 1999' ". We now know this to be untrue (Gill Draper v. RTA Sept/Oct 2009). He said that we were bound by the terms of the contract and they could not be varied. We took this to mean that he wasn't accepting our properly submitted notice of termination, or the offer to pay the £500 cancellation fee.
On 4th February my husband had a call on his mobile from a gentleman at RTA demanding payment of the registration fee. He was referred to Mr O'Reilly.
Our 'Welcome Pack' arrived a couple of days later, on 6th February containing a request for payment of the registration fee.
On 9th February, after consulting our solicitor, we sent a reply to Mr O'Reilly's letter, advising that we were fully aware of Gill Draper's success in the Peterborough appeal court in October 2009, and that we regarded the contract as unenforceable under the 1999 Regulations. We withdrew our offer of payment, and asked that no steps be taken to advertise or market our business now or in the future.
Later that day, we received a second letter from Mr O'Reilly, dated 8th February, which included an invoice for £1762.50 for half the commission fee, due to breach of contract. He gave us 7 days to pay the registration fee or they would commence proceedings against us for recovery of the commission fee. We were somewhat surprised by this rather speedy demand for breach of contract payment only 14 days after our meeting with the rep, and wondered if they were hoping that we would pay up before we found out about Gill Draper's case?
On 16th February, when checking RTA's website, I found that our business was being offered for sale. As we had made our position perfectly clear in our letters, our solicitor suggested we ignore this.
We have had no further correspondence from RTA since the 9th February, but my husband received another call on 9th March from a gentleman asking again for the registration fee. He was referred to Mr O'Reilly.
As far as we're concerned, the matter is closed. We sent proper notice, as required in the contract, within two days of our meeting, and an offer of payment of the cancellation fee. That they chose not to accept this, insisting that the contract was still in force, is down to them.
My husband glanced at the contract before signing, but didn't read it fully, not realising that it continued over the page. When we got home, we read the contract properly and were shocked at the content, though it wasn't easy to understand - there was virtually nothing in there about what RTA would do to sell our property, only how much it would cost us if they didn't! Why on earth do they need a confidentiality clause, we wondered? Now we know.
We contacted our solicitor the following day and he advised us that the contract offended against the Unfair Terms of the Consumer Contract Regulations 1999. We wrote to RTA stating this fact, and offering them the £500 + VAT cancellation fee, on receipt of a VAT invoice, to terminate the contract. This was sent on 28th February by Recorded Delivery, as required by the contract.
A reply was received on 3rd February, and came from Mr O'Reilly himself who was 'bemused' at the contents of our letter. He stated, " .. we have been established for over 37 years and have always utilised this contract and never once in that period of time has it been established that it 'is against the Unfair Terms and Consumer Contract Regulations of 1999' ". We now know this to be untrue (Gill Draper v. RTA Sept/Oct 2009). He said that we were bound by the terms of the contract and they could not be varied. We took this to mean that he wasn't accepting our properly submitted notice of termination, or the offer to pay the £500 cancellation fee.
On 4th February my husband had a call on his mobile from a gentleman at RTA demanding payment of the registration fee. He was referred to Mr O'Reilly.
Our 'Welcome Pack' arrived a couple of days later, on 6th February containing a request for payment of the registration fee.
On 9th February, after consulting our solicitor, we sent a reply to Mr O'Reilly's letter, advising that we were fully aware of Gill Draper's success in the Peterborough appeal court in October 2009, and that we regarded the contract as unenforceable under the 1999 Regulations. We withdrew our offer of payment, and asked that no steps be taken to advertise or market our business now or in the future.
Later that day, we received a second letter from Mr O'Reilly, dated 8th February, which included an invoice for £1762.50 for half the commission fee, due to breach of contract. He gave us 7 days to pay the registration fee or they would commence proceedings against us for recovery of the commission fee. We were somewhat surprised by this rather speedy demand for breach of contract payment only 14 days after our meeting with the rep, and wondered if they were hoping that we would pay up before we found out about Gill Draper's case?
On 16th February, when checking RTA's website, I found that our business was being offered for sale. As we had made our position perfectly clear in our letters, our solicitor suggested we ignore this.
We have had no further correspondence from RTA since the 9th February, but my husband received another call on 9th March from a gentleman asking again for the registration fee. He was referred to Mr O'Reilly.
As far as we're concerned, the matter is closed. We sent proper notice, as required in the contract, within two days of our meeting, and an offer of payment of the cancellation fee. That they chose not to accept this, insisting that the contract was still in force, is down to them.
Majid's Story
On March 20th 2009, RTA , following six months of intensive and aggressive Telephone calls /faxes to our office, came to our Havant office at Hampshire to price our Business (which was a Civil Engineering Company), their agent without inspecting our company's accounts estimated price of our Business as £713K and immediately he asked for £4324.00 in advance, I required the details for payment of this money and he notified me that it is for the one year of their advertising and also introducing clients to us. I was not sure, although I signed the contract (I wish I did not) but I verbally notified him that I need to see My Bank Manager before issuing him any cheques.
The following week I checked with My Bank Manager and he notified me that RTA’s estimation is totally wrong and our business does not worth more that £150-£250K.
I immediately notified RTA via telephone calls/ e.mails/faxes regarding their overestimated price for our Business and asked them for reconsideration of their fees and also terms/conditions of their contract.
They got very nasty and threatened me by court actions. This was three weeks after my meeting with their agent. (Including 7 days to refuse, Check Consumer laws)I, at the same time asked them to cancel my contract, they refused.
On 15th May 2009, due to non-payment of our money by our clients, our company went into involuntary bankruptcy which I notified RTA regarding this.
They responded by not only taking My Old Company to court but also me too.
My old company owed me £75K and also my house had 2nd charge on it by Bank, therefore at the present I am financially ruined, but however the insolvency practitioner notified me that there is enough money owed to the company which will recover all the Creditors money.
Providing RTA wins the case they will get their money back from my old company.
We had our first Court meeting in Southampton County Court on 7th of January 2010 and the judge passed this case to Small claims and the next court case is on 19th April 2010.
In Conclusion:
1) RTA was dishonest with their Price or had no clue how to price our Businesses.
2) They were asking £4324.00 for three weeks of work (From 20th March 2009 to 5th April 2009). (This Price is for 1 year’s work as stated in their contract).
3) They Bully, threaten their victims (Mainly naïve and desperate Businessmen).
I therefore would be grateful to hear from other victims of RTA in order legally to prepare cases against them and expose their game.
I think it is morally wrong to bully, threaten and take away people’s money by scamming and doing nothing at all. And further more I am puzzled and saddened by British FTA system to allow these sorts of people to take advantages of people like us.
*** UPDATE ***
On 9th April 2010 Majid had his day in court and won his case. For a full blow-by-blow account of the court hearing please go here
The following week I checked with My Bank Manager and he notified me that RTA’s estimation is totally wrong and our business does not worth more that £150-£250K.
I immediately notified RTA via telephone calls/ e.mails/faxes regarding their overestimated price for our Business and asked them for reconsideration of their fees and also terms/conditions of their contract.
They got very nasty and threatened me by court actions. This was three weeks after my meeting with their agent. (Including 7 days to refuse, Check Consumer laws)I, at the same time asked them to cancel my contract, they refused.
On 15th May 2009, due to non-payment of our money by our clients, our company went into involuntary bankruptcy which I notified RTA regarding this.
They responded by not only taking My Old Company to court but also me too.
My old company owed me £75K and also my house had 2nd charge on it by Bank, therefore at the present I am financially ruined, but however the insolvency practitioner notified me that there is enough money owed to the company which will recover all the Creditors money.
Providing RTA wins the case they will get their money back from my old company.
We had our first Court meeting in Southampton County Court on 7th of January 2010 and the judge passed this case to Small claims and the next court case is on 19th April 2010.
In Conclusion:
1) RTA was dishonest with their Price or had no clue how to price our Businesses.
2) They were asking £4324.00 for three weeks of work (From 20th March 2009 to 5th April 2009). (This Price is for 1 year’s work as stated in their contract).
3) They Bully, threaten their victims (Mainly naïve and desperate Businessmen).
I therefore would be grateful to hear from other victims of RTA in order legally to prepare cases against them and expose their game.
I think it is morally wrong to bully, threaten and take away people’s money by scamming and doing nothing at all. And further more I am puzzled and saddened by British FTA system to allow these sorts of people to take advantages of people like us.
*** UPDATE ***
On 9th April 2010 Majid had his day in court and won his case. For a full blow-by-blow account of the court hearing please go here
Dawn's Story
I signed a contract in August 2005 with them. Like Gill Draper, I didn't have the up-front fee so they upped the withdrawal fee. Again, like Gill, the rep said the contract was for 12 months. He valued the business at £90k which was double what I paid 2 years earlier. When I queried the valuation with the rep on the day, he said it was because we'd negotiated a new lease so the business was worth more - I don't do business valuation so how was I to know this was rubbish?
Having spoken to my business partner after the meeting, we decided that the valuation couldn't be right - it looked to us as if it had been valued high to maximise their commission. So we called RTA a couple of days later to change the valuation and commission rate - RTA said 'no'. So we asked to be taken back off the books (it had been 3 days and they hadn't produced the details so couldn't have spent any money) - RTA said only if we pay the commission in full. Obviously, we weren't very happy but there was nothing we could do.
After that, I never heard from them again - even though their rep said we'd get a monthly breakdown of how many people had requested our business details. Not even one viewing in 5 years.
Naturally, as the rep said the contract was only for 12 months, I eventually forgot all about them.
In 2008 I put my business on the market with another company at £30k and sold it for £25k in October 2009.
Out of the blue, in January 2010, I received a letter from RTA saying that it was no longer viable for them to market my business (I didn't know they still were) so they were withdrawing from the contract giving a months notice and sent me a bill for £1000 plus VAT.
As you can imagine, I was stunned.
I contacted a couple of their offices posing as a buyer. London office told me the business was no longer on their books and they hadn't actively marketed it since 2008. Stockport also confirmed they had no business of my type on their books in my geographical area - confirmed by a member of their staf via email. The business wasn't listed on their own website either.
So it was obvious to me that they had already stopped acting as a selling agent (you can't say you're a selling agent for a business you don't market, don't claim to have on your books, and don't send particulars out for) so must've already withdrawn from the contract without notice. So I wrote to them and told them this and said that the contract was only for 12 months but they'd already withdrawn from the agreement without notice in any case so it was all redundant.
I then had a further letter from them in early Feb saying that they'd just found out that the business had sold because they contacted the shop to arrange a viewing (even though they have it on file that they should contact me on my mobile and not at the shop, and that they're not currently marketing or sending out particulars so where did they manage to get a buyer from after 5 years?) and sent a new bill for £3900 plus VAT which consituted the commission.
I wrote back immediately asking what efforts they made in advertising, how they managed to find a buyer without advertising and after so long, full details of the buyer. I complained about the service, valuation, unclear contract, etc.
I had a subsequent letter in early Fenruary which basically said that I had to pay up or else because they don't work for nothing. That's odd because they want me to pay for nothing.
I then formally wrote back a 3 page essay after re-checking dates, collecting evidence and speaking to my solicitor (and using the info provided by Gill Draper).
My response to them was that Gill's case makes the contract a consumer contract and that the clauses in the contract are unfair (contrary to the regulations), they are ambiguous, and that I should have been given written notification of my rights to cancel so the contract is unenforceable.
I've also requested the full contact details of the mysterious buyer that they suddenly found after 5 years - I am to request that they stand as a witness (that's if they exist) in any court proceedings.
At the end of February 2010, RTA's Paul O'Reilly responded by telling me that my case was nothing like Gill's (even though it's exactly the same, right down to where we each initialed the contract), that they were 100% confident that they would win their court case and I would incur substantial costs. And that, in any case, they had already issue a summons as it was evident I wasn't going to pay.
I didn't get a summons but a month later I received a 'draft' summons from another member of RTA staff with a letter saying they would issue the summons in 7 days if I didn't pay.
That was around mid March 2010. I wrote back just to say that Mr O'Reilly had said in his letter a month earlier that he had already issued summons so presumably that wasn't true and that I had no intention of being bullied into paying when they had yet to respond to any of my issues so, if necessary, they would need to respond to them in court.
It's now almost May and the summons still hasn't arrived (neither the one RTA claim they issued in February nor the one they threatened to issue in March) but I've had no further correspondence so far.
I am still expecting it to turn up though, and I WILL fight it - I have all the ammunition from the case law I've researched and also Gill and Majid's cases. Even if I don't win, hopefully some of the information I have found will go on to help other RTA clients.
Having spoken to my business partner after the meeting, we decided that the valuation couldn't be right - it looked to us as if it had been valued high to maximise their commission. So we called RTA a couple of days later to change the valuation and commission rate - RTA said 'no'. So we asked to be taken back off the books (it had been 3 days and they hadn't produced the details so couldn't have spent any money) - RTA said only if we pay the commission in full. Obviously, we weren't very happy but there was nothing we could do.
After that, I never heard from them again - even though their rep said we'd get a monthly breakdown of how many people had requested our business details. Not even one viewing in 5 years.
Naturally, as the rep said the contract was only for 12 months, I eventually forgot all about them.
In 2008 I put my business on the market with another company at £30k and sold it for £25k in October 2009.
Out of the blue, in January 2010, I received a letter from RTA saying that it was no longer viable for them to market my business (I didn't know they still were) so they were withdrawing from the contract giving a months notice and sent me a bill for £1000 plus VAT.
As you can imagine, I was stunned.
I contacted a couple of their offices posing as a buyer. London office told me the business was no longer on their books and they hadn't actively marketed it since 2008. Stockport also confirmed they had no business of my type on their books in my geographical area - confirmed by a member of their staf via email. The business wasn't listed on their own website either.
So it was obvious to me that they had already stopped acting as a selling agent (you can't say you're a selling agent for a business you don't market, don't claim to have on your books, and don't send particulars out for) so must've already withdrawn from the contract without notice. So I wrote to them and told them this and said that the contract was only for 12 months but they'd already withdrawn from the agreement without notice in any case so it was all redundant.
I then had a further letter from them in early Feb saying that they'd just found out that the business had sold because they contacted the shop to arrange a viewing (even though they have it on file that they should contact me on my mobile and not at the shop, and that they're not currently marketing or sending out particulars so where did they manage to get a buyer from after 5 years?) and sent a new bill for £3900 plus VAT which consituted the commission.
I wrote back immediately asking what efforts they made in advertising, how they managed to find a buyer without advertising and after so long, full details of the buyer. I complained about the service, valuation, unclear contract, etc.
I had a subsequent letter in early Fenruary which basically said that I had to pay up or else because they don't work for nothing. That's odd because they want me to pay for nothing.
I then formally wrote back a 3 page essay after re-checking dates, collecting evidence and speaking to my solicitor (and using the info provided by Gill Draper).
My response to them was that Gill's case makes the contract a consumer contract and that the clauses in the contract are unfair (contrary to the regulations), they are ambiguous, and that I should have been given written notification of my rights to cancel so the contract is unenforceable.
I've also requested the full contact details of the mysterious buyer that they suddenly found after 5 years - I am to request that they stand as a witness (that's if they exist) in any court proceedings.
At the end of February 2010, RTA's Paul O'Reilly responded by telling me that my case was nothing like Gill's (even though it's exactly the same, right down to where we each initialed the contract), that they were 100% confident that they would win their court case and I would incur substantial costs. And that, in any case, they had already issue a summons as it was evident I wasn't going to pay.
I didn't get a summons but a month later I received a 'draft' summons from another member of RTA staff with a letter saying they would issue the summons in 7 days if I didn't pay.
That was around mid March 2010. I wrote back just to say that Mr O'Reilly had said in his letter a month earlier that he had already issued summons so presumably that wasn't true and that I had no intention of being bullied into paying when they had yet to respond to any of my issues so, if necessary, they would need to respond to them in court.
It's now almost May and the summons still hasn't arrived (neither the one RTA claim they issued in February nor the one they threatened to issue in March) but I've had no further correspondence so far.
I am still expecting it to turn up though, and I WILL fight it - I have all the ammunition from the case law I've researched and also Gill and Majid's cases. Even if I don't win, hopefully some of the information I have found will go on to help other RTA clients.
Martyn's Story
I own a newsagents/off licence in Leeds in April 2006 we put it on the market with RTA, we paid an up front fee of £750 + vat.
My Wife initialed all the monetary obligations on the contract with the representative but he never mentioned the withdrawl fee and never asked her to initial it in the contract. We where told it was a 1 year contract and that we could cancel after that period if we wrote giving 1 months notice that was ok.
From that point until August 2008 we had about 4 viewings and we where only contacted once after the first viewing with any feed back. We decided to take it off the market in August and wrote to their Leeds P/O box (we have the proof of postage).
We didn't hear anything from them until April 2009 when they rang us to arrange a viewing i informed them that we had cancelled our contract in the previous August, they couldn't find any trace of this and told us we would be in breach of contract i allowed the viewing and asked what address i needed to send the cancellation to never did they tell me there was a withdrawl fee.
I duly wrote to cancel on the 24/4/09 cancellation date 24/5/09 this time keeping a copy of the letter sent and proof of postage.
In late May around the 27/28th i was telephoned again with a possible viewing i spoke to the lady i spoke with in April and she confirmed it had been cancelled, NO mention of the withdrawl fee!
We had a buyer which was due to complete in August this year but it fell through.
In September we received an invoice for £500 for the withdrawl fee i telephoned them and after a heated conversation we agreed on £100, which we duly sent in November they have cashed the cheque.
Now in March 2010 we have been issued with a small claims summons for £5000 due to us selling in August I have submitted a defence outlining the above events and sent this to the court and also to RTA asking for a copy of my file and any taped conversations.
I have had a lovely letter from Mr O'Reilly which doesn't answer any of my questions or requests but he does inform me that i have NO PROSPECT OF DEFENDINGTHIS CLAIM WHATSOEVER.
My Wife initialed all the monetary obligations on the contract with the representative but he never mentioned the withdrawl fee and never asked her to initial it in the contract. We where told it was a 1 year contract and that we could cancel after that period if we wrote giving 1 months notice that was ok.
From that point until August 2008 we had about 4 viewings and we where only contacted once after the first viewing with any feed back. We decided to take it off the market in August and wrote to their Leeds P/O box (we have the proof of postage).
We didn't hear anything from them until April 2009 when they rang us to arrange a viewing i informed them that we had cancelled our contract in the previous August, they couldn't find any trace of this and told us we would be in breach of contract i allowed the viewing and asked what address i needed to send the cancellation to never did they tell me there was a withdrawl fee.
I duly wrote to cancel on the 24/4/09 cancellation date 24/5/09 this time keeping a copy of the letter sent and proof of postage.
In late May around the 27/28th i was telephoned again with a possible viewing i spoke to the lady i spoke with in April and she confirmed it had been cancelled, NO mention of the withdrawl fee!
We had a buyer which was due to complete in August this year but it fell through.
In September we received an invoice for £500 for the withdrawl fee i telephoned them and after a heated conversation we agreed on £100, which we duly sent in November they have cashed the cheque.
Now in March 2010 we have been issued with a small claims summons for £5000 due to us selling in August I have submitted a defence outlining the above events and sent this to the court and also to RTA asking for a copy of my file and any taped conversations.
I have had a lovely letter from Mr O'Reilly which doesn't answer any of my questions or requests but he does inform me that i have NO PROSPECT OF DEFENDINGTHIS CLAIM WHATSOEVER.
Thursday, 1 January 2009
The Requirement of Reasonableness
Exclusion clauses subject to reasonableness
S.6(3) states that as against a person dealing otherwise than as consumer liability for breach of the obligations arising from ss.13, 14 or 15 of the Sale of Goods Act 1979 can be excluded or restricted by reference to a contract term, but only in so far as the term satisfies the requirement of reasonableness.
THE REQUIREMENT OF REASONABLENESS
Under s11(1) the requirement of reasonableness is that "the term shall have been a fair and reasonable one to be included having regard to the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made."
Section 11(2) provides that, in determining whether the clause is a reasonable one for the purposes of ss6 and 7, regard shall be had to the Guidelines set out in Schedule 2 of the Act, which are as follows:
(1) The bargaining strengths of the parties relative to each other and the availability of alternative supplies.
(2) Whether the customer received an inducement to agree to the term. (The supplier may have offered the customer a choice: a lower price but subject to an exemption clause or a higher price without the exemption.)
(3) Whether the customer knew or ought reasonably to have known of the existence and extent of the term.
(4) Where the term excludes or restricts any relevant liability if some condition is not complied with, whether it was reasonable at the time of the contract to expect that compliance with that condition would be practicable.
(5) Whether the goods were manufactured, processed or adapted to the special order of the custom
The Regulations apply, with certain exceptions, to unfair terms in contracts concluded between a consumer and a seller or supplier and provide that an unfair term is one which has not been individually negotiated and which, contrary to the requirement of good faith, causes a significant imbalance in the parties' rights and obligations under the contract to the detriment of the consumer. An unfair term shall not be binding on the consumer.
S.6(3) states that as against a person dealing otherwise than as consumer liability for breach of the obligations arising from ss.13, 14 or 15 of the Sale of Goods Act 1979 can be excluded or restricted by reference to a contract term, but only in so far as the term satisfies the requirement of reasonableness.
THE REQUIREMENT OF REASONABLENESS
Under s11(1) the requirement of reasonableness is that "the term shall have been a fair and reasonable one to be included having regard to the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made."
Section 11(2) provides that, in determining whether the clause is a reasonable one for the purposes of ss6 and 7, regard shall be had to the Guidelines set out in Schedule 2 of the Act, which are as follows:
(1) The bargaining strengths of the parties relative to each other and the availability of alternative supplies.
(2) Whether the customer received an inducement to agree to the term. (The supplier may have offered the customer a choice: a lower price but subject to an exemption clause or a higher price without the exemption.)
(3) Whether the customer knew or ought reasonably to have known of the existence and extent of the term.
(4) Where the term excludes or restricts any relevant liability if some condition is not complied with, whether it was reasonable at the time of the contract to expect that compliance with that condition would be practicable.
(5) Whether the goods were manufactured, processed or adapted to the special order of the custom
The Regulations apply, with certain exceptions, to unfair terms in contracts concluded between a consumer and a seller or supplier and provide that an unfair term is one which has not been individually negotiated and which, contrary to the requirement of good faith, causes a significant imbalance in the parties' rights and obligations under the contract to the detriment of the consumer. An unfair term shall not be binding on the consumer.
Am I a consumer?
Peter Symmons and Co v Cook (1981) 131 NLJ 758
The plaintiff firm of surveyors bought a second-hand Rolls Royce from the defendants which developed serious defects after 2,000. It was held that the firm was acting as a consumer and that to buy in the course of a business 'the buying of cars must form at the very least an integral part of the buyer's business or a necessary incidental thereto'. It was emphasised that only in those circumstances could the buyer be said to be on equal footing with his seller in terms of bargaining strength.
R and B Customs Brokers v United Dominion Trusts Ltd [1988] 1 WLR 321
The plaintiff company, which was a shipping agency, bought a car for a director to be used in business and private use. It had bought cars once or twice before. The sale was arranged by the defendant finance company. The contract excluded the implied conditions about merchantable quality. The car leaked badly.
It was held by the Court of Appeal that where a transaction was only incidental to a business activity, a degree of regularity was required before a transaction could be said to be an integral part of the business carried on and so entered into in the course of that business. Since here the car was only the second or third vehicle acquired by the plaintiffs, there was not a sufficient degree of regularity capable of establishing that the contract was anything more than part of a consumer transaction. Therefore, this was a consumer sale and the implied conditions could not be excluded.
RTA v Gill Draper (Huntingdon County Court 16th September 2009)
It was found that Ms Draper, in signing the contract to appoint RTA as the selling agent for her public house, did so as a consumer as she was not in the business of buying or selling businesses.
The plaintiff firm of surveyors bought a second-hand Rolls Royce from the defendants which developed serious defects after 2,000. It was held that the firm was acting as a consumer and that to buy in the course of a business 'the buying of cars must form at the very least an integral part of the buyer's business or a necessary incidental thereto'. It was emphasised that only in those circumstances could the buyer be said to be on equal footing with his seller in terms of bargaining strength.
R and B Customs Brokers v United Dominion Trusts Ltd [1988] 1 WLR 321
The plaintiff company, which was a shipping agency, bought a car for a director to be used in business and private use. It had bought cars once or twice before. The sale was arranged by the defendant finance company. The contract excluded the implied conditions about merchantable quality. The car leaked badly.
It was held by the Court of Appeal that where a transaction was only incidental to a business activity, a degree of regularity was required before a transaction could be said to be an integral part of the business carried on and so entered into in the course of that business. Since here the car was only the second or third vehicle acquired by the plaintiffs, there was not a sufficient degree of regularity capable of establishing that the contract was anything more than part of a consumer transaction. Therefore, this was a consumer sale and the implied conditions could not be excluded.
RTA v Gill Draper (Huntingdon County Court 16th September 2009)
It was found that Ms Draper, in signing the contract to appoint RTA as the selling agent for her public house, did so as a consumer as she was not in the business of buying or selling businesses.
Tina's Story
I signed up with RTA in Nov 2008.
The sales man was very nice and I assumed the contract was like any other agents contract.
6 months into the agreement I asked to be released from the contract as my house was being repossessed but they refused.
Nearly a year later, I wanted to terminate the agreement as I realised they did not advertise, did not send one potential buyer and after paying £700 plus VAT I never heard from them and always had great difficulty getting in touch with them.
I even pretended to be a 3rd party interested in buying my own business and they said it was not available!
I searched the internet and found the Mirror blog. Then I tried to cancel my agreement with RTA. I wrote an email saying as a single mum of 2 and about to have my family home repossessed and go bankrupt I needed to sell quickly and had to take the property to auction. I wanted to be released from the contract because they did not fulfil their agreement as the sales man mentioned 'national advertising' but my business was never advertised nationally.
They said no.
After a year I found a private buyer and sold the business in Dec 2009, 13 months after signing their agreement, and not having heard from them once except in response to my request to cancel.
I was told by their rep that after a year I was released from the agreement automatically - but then RTA sent me a bill for £17,000 and a threat of legal action if I didn't pay up!
Their contract may be water tight but I am going to attempt to take them to court and 'out' them as small business con men.
It is outragious that they target such people or anyone at all. It is simple to do the job they offer so why do they need to 'steal' our money and bully and indimidate us with threats of legal action?
I am hoping a judge will see them for what they really are and finally do something to stop this.
The sales man was very nice and I assumed the contract was like any other agents contract.
6 months into the agreement I asked to be released from the contract as my house was being repossessed but they refused.
Nearly a year later, I wanted to terminate the agreement as I realised they did not advertise, did not send one potential buyer and after paying £700 plus VAT I never heard from them and always had great difficulty getting in touch with them.
I even pretended to be a 3rd party interested in buying my own business and they said it was not available!
I searched the internet and found the Mirror blog. Then I tried to cancel my agreement with RTA. I wrote an email saying as a single mum of 2 and about to have my family home repossessed and go bankrupt I needed to sell quickly and had to take the property to auction. I wanted to be released from the contract because they did not fulfil their agreement as the sales man mentioned 'national advertising' but my business was never advertised nationally.
They said no.
After a year I found a private buyer and sold the business in Dec 2009, 13 months after signing their agreement, and not having heard from them once except in response to my request to cancel.
I was told by their rep that after a year I was released from the agreement automatically - but then RTA sent me a bill for £17,000 and a threat of legal action if I didn't pay up!
Their contract may be water tight but I am going to attempt to take them to court and 'out' them as small business con men.
It is outragious that they target such people or anyone at all. It is simple to do the job they offer so why do they need to 'steal' our money and bully and indimidate us with threats of legal action?
I am hoping a judge will see them for what they really are and finally do something to stop this.
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