- •Commercial Law
- •Contents
- •Preface
- •Abbreviations
- •Table of Statutory Provisions
- •Table of Cases
- •1 Introduction
- •1 Introduction
- •2 What is agency?
- •3 Nature and characteristics of agency
- •4 The different types of agency
- •5 Conclusion
- •6 Recommended reading
- •1 Introduction
- •2 The authority of an agent
- •3 Agency by ratification
- •4 Agency of necessity
- •5 Conclusion
- •6 Recommended reading
- •1 Introduction
- •2 Duties of an agent
- •3 Rights of an agent
- •4 Commercial agents and principals
- •5 Disclosed agency
- •6 Undisclosed agency
- •7 Termination of agency
- •8 Recommended reading
- •Introduction
- •1 Introduction
- •2 Background
- •3 Development of the sale of goods
- •4 Equality of bargaining power: non-consumers and consumers
- •5 Impact of the European Union
- •6 Contract of sale
- •7 Contracts for non-monetary consideration
- •8 Contracts for the transfer of property or possession
- •9 Recommended reading
- •1 Introduction
- •2 Background
- •3 Sale of Goods Act 1979, section 12: the right to sell
- •4 Sale of Goods Act 1979, section 13: compliance with description
- •5 Sale of Goods Act 1979, section 14(2): satisfactory quality
- •6 Sale of Goods Act 1979, section 14(3): fitness for purpose
- •7 Sale of Goods Act 1979, section 15: sale by sample
- •8 Exclusion and limitation of liability
- •9 Acceptance
- •10 Remedies
- •11 Recommended reading
- •1 Introduction
- •2 Background to the passage of property and risk
- •3 Rules governing the passage of property
- •4 Passage of risk
- •5 The nemo dat exceptions
- •6 Delivery and payment
- •7 Remedies
- •8 Recommended reading
- •1 Introduction
- •2 Background
- •3 Provision of Services Regulations 2009
- •4 Supply of Goods and Services Act 1982
- •5 Recommended reading
- •1 Introduction
- •2 Background
- •3 Electronic Commerce (EC Directive) Regulations 2002
- •4 Distance selling
- •5 Recommended reading
- •Introduction
- •1 Introduction
- •2 CIF contracts
- •3 FOB contracts
- •4 Ex Works
- •5 FAS contracts
- •6 Conclusion
- •7 Recommended reading
- •1 Introduction and background
- •2 Structure and scope
- •3 UNIDROIT Principles of International Commercial Contracts
- •4 Conclusion
- •5 Recommended reading
- •1 Introduction and background
- •2 Open account
- •3 Bills of exchange
- •4 Documentary collections
- •5 Introduction to letters of credit
- •6 Factoring
- •7 Forfaiting
- •8 Conclusion
- •9 Recommended reading
- •1 Introduction
- •2 Hague and Hague-Visby Rules
- •3 Charterparties
- •4 Time charterparty
- •5 Common law obligations of the shipper
- •6 Common law obligations of the carrier
- •7 Bills of lading
- •8 Electronic bills of lading
- •9 Conclusion
- •10 Recommended reading
- •Introduction
- •1 Introduction
- •2 Background
- •3 Development of negligence
- •4 The move to strict liability
- •5 Types of defect
- •6 Developments in strict liability
- •7 Recommended reading
- •1 Introduction
- •2 Personnel
- •3 Meaning of ‘product’
- •4 Defectiveness
- •5 Defences
- •6 Contributory negligence
- •7 Recoverable damage
- •8 Limitations on liability
- •9 Recommended reading
- •Introduction
- •1 Introduction
- •2 Background
- •3 Enforcement strategy
- •4 Criminal law controls
- •5 Civil law enforcement
- •6 Recommended reading
- •1 Introduction
- •2 Scope of the 2008 Regulations
- •3 Prohibition against unfair commercial practices
- •4 Codes of practice
- •5 Misleading actions
- •6 Misleading omissions
- •7 Aggressive commercial practices
- •8 Commercial practices which are automatically unfair
- •9 Offences
- •10 Recommended reading
- •1 Introduction
- •2 Background
- •3 Controls over misleading advertising
- •4 Comparative advertising
- •5 Promotion of misleading or comparative advertising
- •6 Recommended reading
- •1 Introduction
- •1 Introduction
- •2 History of banking regulation: early policy initiatives
- •3 New Labour and a new policy
- •4 The Financial Services Authority
- •5 The Coalition government
- •6 Conclusion
- •7 Recommended reading
- •1 Introduction
- •2 What is a bank?
- •3 What is a customer?
- •4 Bank accounts
- •5 Cheques
- •6 Payment cards
- •7 Banker’s duty of confidentiality
- •8 Banking Conduct Regime
- •9 Payment Services Regulations 2009
- •10 Conclusion
- •11 Recommended reading
- •1 Introduction
- •2 European banking regulation
- •3 The Financial Services Authority
- •4 Financial Services Compensation Scheme
- •5 Financial Ombudsman Scheme
- •6 Financial Services and Markets Tribunal
- •7 The Bank of England
- •8 Bank insolvency
- •9 Illicit finance
- •10 Conclusion
- •11 Recommended reading
- •1 Introduction
- •1 Introduction
- •2 Evolution of the consumer credit market
- •3 Consumer debt, financial exclusion and over-indebtedness
- •4 Irresponsible lending
- •5 Regulation of irresponsible lending
- •6 Irresponsible borrowing
- •7 Ineffective legislative protection for consumers
- •8 A change of policy
- •9 Lessons from the United States
- •10 Conclusion
- •11 Recommended reading
- •1 Introduction
- •2 Crowther Committee on Consumer Credit
- •3 Consumer Credit Act 1974
- •4 Formalities
- •5 Cancellation of agreements
- •7 Documentation of credit and hire agreements
- •8 Matters arising during the currency of credit or hire agreements
- •9 Credit advertising
- •10 Credit licensing
- •11 Unfairness test
- •12 Other powers of the court
- •13 Financial Ombudsman Service
- •14 Enforcement
- •15 Consumer Credit Directive
- •16 Conclusion
- •17 Recommended reading
- •Bibliography
- •Index
451 |
6â Payment cards |
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The Cheques Act 1992 ‘amends certain provisions of the Bills of Exchange Act |
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1882 and of the Cheques Act 1957, and gives effect to a recommendation made |
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in the White Paper presented by the Chancellor of the Exchequer to Parliament |
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in March 1990 in the wake of the Report of the Review Committee on Banking |
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Services Law’.101 |
6â Payment cards
There is a vast array of different payment cards in existence in the United Kingdom and they are an extremely convenient way for customers to pay for goods and services.102 According to Ellinger et al., there are six different types of payments cards:
(1) credit card;103
(2) charge card;
(3) cheque card;
(4) debit card;
(5) cash card; and
(6) electronic purse or digital cash card.104
The legal classification of these cards also differs, depending on the type of card. For example, if a card is regulated by the Consumer Credit Act 1974, the card must be classified as a consumer credit agreement or a credit token. Hudson noted that it is possible to obtain some clarity on the legal classification of cards from the decision in Re Charge Card Services Ltd.105 Here, Millet J stated:
As the cases cited to me demonstrate, the approach of the courts to this question has not been conceptual or based on any such supposed principle, but has been strictly pragmatic. As each new method of payment has fallen to be considered, its nature and the surrounding circumstances have been examined to see whether a presumption of conditional payment should be made. Indeed, only in this way is it possible to identify those special circumstances which may take an individual case out of the general rule applicable to payments by a particular method.106
101 See above n. 97, at 270.
102 B. Bisping, ‘The case against s.75 of the Consumer Credit Act 1974 in credit card transactions’ (2011) 5 Journal of Business Law 457.
103 See further Part 7.
104 Ellinger et al., above n. 10, at 649–51.
105 [1989] Ch. 497, CA. For an interesting discussion of this case see S. Deane, ‘Re Charge Card Services Ltd and Hong Kong’s section 15A’ (1991) 6(8) Journal of International Banking Law 332 and R. Goode, ‘Case comment: setting off contingent claims’ (1986) Journal of Business Law (September) 431. This case has been described as a ‘welcome development’ by Shea, above n. 26, at 57 and as ‘very welcome in casting some light into a legally obscure area’ in Editorial, ‘Credit cards: our flexible friends and legal relations’ (1988) 7(6) International Banking Law 82.
106 [1987] Ch. 150, 166.
452 |
Banking and finance law |
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(a)â Charge card
According to Wadsley and Penn, charge cards ‘are not classed as credit cards, because the total balance outstanding has to be repaid regularly on the due date’.107 Conversely, it has been argued that a charge card is a ‘variant of the credit card’, which requires the card holder to pay the outstanding balance punctually or regularly.108 Charge cards are governed by the Consumer Credit Act 1974 and the Payment Services Regulations 2009.109 It has also been argued by some commentators that a charge card is very similar to a debit card, yet the card is not necessarily issued by the customer’s bank.110
(b)â Debit card
Debit cards were first introduced in 1987 and have ‘become increasingly popular, particularly for smaller payments’.111 Hudson noted that when payment is made via a debit card ‘the amount paid is taken directly from the customer’s bank account’.112 They perform a very similar purpose to a cheque, in that the money is debited from the card holder’s bank account by the Electronic Funds Transfer at Point of Sale (EFTPOS) Sustem.113 This system ‘authenticates the card as being valid at first and then the customer enters a [four digit] personal identification number to authorise the transaction’.114 Writing in 1986, Arora took the view that EFTPOS has the:
result that a customer of the connected business will be able to pay for goods and services by giving direct instructions to his bank to debit his account for a specified amount and simultaneously to credit the retailer’s account with an equivalent amount.115
(c)â Automated teller machine card and cash card
These cards were first introduced in 1967 and are used by bank customers to obtain cash and other services from what is often referred to as a ‘hole in the wall’.116 Once the transaction has been completed, the customer’s bank account is debited with the amount of cash withdrawn. There are two different types of cash cards: (a) offline, and (b) online.117 An offline cash card ‘operates by means of identification of the PIN, which is encoded on the card itself, by the automatic teller machine’.118
107 |
Wadsley and Penn, above n. 1, at 466.â |
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108â Ellinger et al., above n. 10, at 650. |
109 |
SI 2009/209.â 110â Hudson, above n. 35, at 817. |
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111 |
Wadsley and Penn, above n. 1, at 466.â |
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112â Hudson, above n. 35, at 817. |
113For a description of the operation of this scheme see C. Reed, ‘Consumer electronic banking’ (1994) 9(11) Journal of International Banking Law 451.
114Hudson, above n. 35, at 817.
115A. Arora, ‘Electronic funds transfer and the law’ (1986) 7(5) Company Lawyer 195, 198.
116 |
Wadsley and Penn, above n. 1, at 466.â 117â Ellinger et al., above n. 10, at 661. |
118 |
Ibid. |
453 |
6â Payment cards |
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(d)â Cheque card
A cheque card ‘is a card issued by a bank to its customer which purports to guarantee that the bank will honour a single cheque up to that maximum amount’.119 Ellinger et al. noted that ‘in this type [of card], the issuer warrants to the payee that a cheque, drawn by the card holder for not more than a stated amount, will be paid on presentation, as long as a number of conditions, including that the signature on the cheque corresponds to that on the card, are met’.120 Millet J in Re Charge Card Services stated that:
A cheque is a revocable mandate by the customer to his bank which authorises the bank, as his agent, to make payment out of moneys standing to the credit of his account or which the bank is willing to advance to him. The obligation undertaken by the bank to the supplier, which it enters into through the agency of its customer when he uses the bank card, is not to dishonour the cheque on presentation for want of funds in the account, so that it is obliged if necessary to advance moneys to the customer to meet it. If the cheque is met, the bank honours its own undertaking as principal to the supplier and, as agent for the customer, makes payment on its behalf out of his own moneys, whether or not these have been advanced to him for the purpose.121
(e)â Store card
Store cards have become an extremely popular method of payment. Hudson noted that ‘store cards are not of a generic type but rather may be charge cards or they may be credit cards but they are issued by a retail shop, usually a retail chain of shops’.122
(f)â Electronic purse or digital cash card
Ellinger et al described electronic money as being where ‘monetary value in the form of digital information (“digital cash”) is loaded onto a smart card and the corresponding deduction is made from the customer’s bank or credit card account’.123 Ramage stated:
This is how electronic money works: a prepaid monetary value may be stored in a computer chip on a smart card or stored on a computer chip in a wireless device, or on a computer disk drive. One can transfer money through card reader/writers, or using computers or wireless devices over the Internet. Cards, wireless devices, and computers can be used to authorise monetary transfers from one account to another. These accounts may be bank accounts or reserve assets held in non-bank institutions. Stock, bond, mutual fund, and gold deposit accounts allow ownership transfer of assets to be made by computer or wireless devices.
119 Hudson, above n. 35, at 816.â 120â Ellinger et al., above n. 10, at 657. 121 [1987] Ch. 150, 166.â 122â Hudson, above n. 35, at 821.
123 Ellinger et al., above n. 10, at 651.