Chapter 11 Multiple choice questions

. Does the Consumer Credit Act 1974 apply to parties who are provided with credit in the course of a business?

Yes

No

. Which one of the following statements is correct as to which of the Consumer Credit Acts of 1974 and 2006 are in force today?

1974

They both are

2006

Neither

. Section 2 of the Consumer Credit Act 2006 removed the £25,000 limit. What was this figure replaced with?

£50,000

£100,000

There is now no limit.

There is now no limit, but the £25,000 figure still remains for business lending.

. Why was the agreement in Dimond v Lovell [2002] 1 AC 384 held not to be a consumer hire agreement?

Because the court held that the hire element of the agreement was unfair

Because the court held that the entire agreement was unfair

Because the agreement was not in writing

A consumer hire agreement must be capable of subsisting for more than three months. The agreement in Dimond v Lovell stated that it could not last for more than 28 days

. Which one of the following is an exception to the rule that an exempt agreement is not regulated by the Consumer Credit Act?

Where the court has the power to reopen an exempt consumer credit agreement in the event that it gives rise to an unfair relationship between the creditor and the debtor.

Where the court has the power to reopen an exempt consumer credit agreement where one of the parties is a minor.

Where the court has the power to reopen an exempt consumer credit agreement where the creditor misrepresented the true rate of interest.

Where the court has the power to reopen an exempt consumer credit agreement where the creditor and the debtor have been advised by the same solicitor.

. Which one of the following was not added as a category of exempt agreement by the Consumer Credit Act 2006?

Businesses

Charities

High net worth debtors and hirers

Investment properties

. A court may make an order in connection with a credit agreement if it determines that the relationship between the creditor and the debtor arising out of the agreement is unfair to the debtor as a result of one or more factors. Which one of the following is not a relevant factor for this purpose?

Any of the terms of the agreement or of any related agreement.

The way in which the creditor has exercised or enforced any of his rights under the agreement or any related agreement.

Any other thing done (or not done) by, or on behalf of, the creditor either before or after the making of the agreement or any related agreement.

Where the terms of the agreement are "extortionate" in that the payments required to be made are "grossly exorbitant".

. If the debtor alleges that the relationship between the creditor and the debtor is unfair to the debtor, upon whom is the burden of proof?

The debtor must prove that the relationship is unfair.

An expert will be appointed to determine the point.

The creditor must prove that the relationship is not unfair.

The test is entirely objective: would the reasonable person deem the relationship to be fair?

. Section 75 of the Consumer Credit Act 1974 provides some protection to the debtor provided that the sale falls within certain financial limits. What are these limits?

A single item costing less than £30,000

Between £100 and £30,000 in respect of a single item

Between £100 and £30,000 in respect of a single transaction

A single item costing more than £100

. Does section 75 of the Consumer Credit Act 1974 provide any protection to debtors in respect of foreign transactions?

Yes, in every case

No

Not without the agreement of the creditor

Yes, provided that the credit agreement is a UK credit agreement

Chapter 11 Multiple choice questions

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