Template:Simplecontract: Difference between revisions
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“'''[[Simple contract]]'''” is one that is | Under the [[Limitation Act 1980]] a “'''[[Simple contract]]'''” is one that is neither a “[[specialty]]”<ref>A written document that has been sealed, delivered and given as security for the payment of a specific debt.</ref> nor an [[insurance contract]]<ref>Perhaps not “simple” because of the implied duty of [[utmost good faith]] — who knows?</ref> nor a “[[contract of loan]]” which has no fixed repayment date, where repayment is not [[Condition precedent|conditional]] on a demand, ''[warning:strap yourselves in for this next bit]'' | ||
{{quote| | |||
“except where, in connection with taking the loan, the debtor enters into any [[collateral]] obligation to pay the amount of the debt or any part of it (as, for example, by delivering a [[promissory note]] as [[security]] for the [[debt]]) on terms which would exclude the application of this section to the [[contract of loan]] if they applied directly to repayment of the [[debt]].”}} | |||
We quote that last bit in full because, for a short | We quote that last bit in full because, for a short extract, it is ''bloody'' hard to decipher. There are no explanatory notes to the [[Limitation Act 1980]], but for help we have that Law Commission bunker buster which says: | ||
{{quote|“Section 6 does not apply where the debtor enters into a collateral obligation to pay the amount of the debt or any part of it on a fixed or determinable date or conditional on a demand for repayment (or other condition).”}} | |||
So if the [[promissory note]] itself is a demand loan, but it is pledged as collateral for another debt which isn’t, then it counts as having a payment date. That’s the best I can do. <br> | |||
===The {{repackprov|covenant to pay}}=== | ===The {{repackprov|covenant to pay}}=== | ||
Hence why the {{repackprov|covenant to pay}} in the terms of a secured note issue is also repeated in the [[security trust deed]] — it converts itself from a [[simple contract]] to a [[specialty]]. This is a bity of a cheeky run-around, in our view, but still. | Hence why the {{repackprov|covenant to pay}} in the terms of a secured note issue is also repeated in the [[security trust deed]] — it converts itself from a [[simple contract]] to a [[specialty]]. This is a bity of a cheeky run-around, in our view, but still. |