Consumer law

Current Law Cases Reference: 00/837 77318 Jurisdiction: UKEW

Consumer hire agreements; Quasi contract; Motor vehicles

Consumer hire agreements; credit hire; quantum meruit where agreement did not stipulate rate of hire

Case: Conway v Lagou

C and L were involved in a road traffic accident. C hired a car from a credit hire company, ACR. The hire charges were disputed by L. At the first hearing C's counsel withdrew on the basis of a conflict of interest. ACR was then added as a second defendant by C who sought a declaration as to the enforceability of the hire agreement. ACR counterclaimed for the hire charges against C. At the trial, C produced her copy of the hire agreement which did not have the rate of hire included in the box on the front. C gave evidence that she assumed, or that her understanding was, that the insurer would pay the charges, although it was unclear whether this was her own or L's insurers. No assurances were given that the hire was free. On the basis of the evidence, L contended that the contract was void due to the uncertainty of its terms and relied upon G Scammell and Nephew Ltd v HC&JG Ouston [1941] A.C. 251 . ACR argued that the contract was not void, and even if it was, that ACR should be entitled to a quantum meruit on the basis of a reasonable price, just as a builder would be so entitled if he did work for which no price had been agreed beforehand. L's counsel requested determination of that issue before consideration of the Consumer Credit Act arguments.

Held, that the contract was void due to uncertainty. The quantum meruit claim was also dismissed although the judge stated that had it not been for C's understanding that she would not have to pay at all then it might have been different, in that it would then be like the example given of the builder where there was an understanding that payment would be required. The judge considered that it behoved hire companies to bring home to the hirer that there was a clear liability on them, even if in all probability that liability would be met by the other insurer. Therefore, the judge made a declaration that the hire contract was unenforceable and no hire charges were awarded.

Court: CC (West Kensington)

Judge: Judge Cowell

Judgment date: October 7, 1999

Counsel: For L: T Kevan

Solicitors: For L: Murphy & Co

Ex relatione: Tim Kevan, Barrister, 1 Temple Gardens, Temple, London