Unfair relationships
Unfair relationships

The following Property guidance note provides comprehensive and up to date legal information covering:

  • Unfair relationships
  • Jurisdiction
  • Factors determining unfairness
  • Rates and charges
  • Remedies
  • Equitable relief


Section 140(A) of the Consumer Credit Act 1974 (CCA 1974) allows the court to reopen a credit agreement on the ground that the relationship between the borrower and the lender which arises out of that agreement is unfair. For the purposes of these provisions, borrower means an individual, a partnership or an unincorporated body of persons.

The new regime applies to all new credit agreements made on or after 6 April 2007 and also to pre-existing agreements as from 6 April 2008. Any agreement which was completed before the new provisions took effect remains subject to the provisions of the now repealed CCA 1974, ss 137–140. An agreement is ‘completed’ if there is no longer any sum which is or may become payable. The court has power to reopen a completed agreement for up to 12 years after the date of the agreement, as a claim upon a specialty within section 8 of the Limitation Act 1980.

The statutory power to reopen a credit agreement applies to any credit agreement of whatever amount (and so not merely to regulated agreements) except hire agreements (although hire-purchase agreements are covered) and mortgage contracts which are regulated under the Financial Services and Markets Act 2000. Therefore, exempt agreements under CCA 1974, ss 16, 16A or 16B may also be reopened.

Where an allegation of

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