Wednesday, January 22, 2014


Gods and Troglodytae muse within slingshot on beautiful Santorini.  Gods languish on the caldera whilst cogitating cave dwellers peer out of their carved doors on the, far far side.   However the third, and often overlooked, species is the humanoid identified by their unique method of encasing dangly bits.  These interlopers in the realm of the Gods maintain their omnipresent force by threatening and indeed scaring the cleaner than clean Gods and their somewhat scruffier and hairy nemesis, the Troglodytes , by displaying their bodily armour for all to revere.
Everyone watches the sunset, including the undies, in Santorini.

Photo and original words by Jon Langevad

Tuesday, January 14, 2014


Does anyone know why the banks seem to be able to vary standard financial contracts at their absolute discretion yet deny borrowers the same rights? This includes the ability to cancel any contract at will - for no given reason.

I always thought that a contract was a binding agreement on both parties to continue with that agreement until the terms of the contract naturally expired either through time or some other form of completion - a mutual obligation. In this way each party could rely on whatever benefit they subsumed from the contract and each other.

For example, Mr and Mrs Bloggs bought a home with a 20 year mortgage calculated to enable them to pay off the house and live comfortably.  The bank benefited from fees and interest - as clearly defined within the contract. At some point the bank arbitrarily changed its lending policy and decided to call the Blogg’s loan without reason.  Nothing to do with the Bloggs and their loan performance - just a new policy by the bank.  The Bloggs couldn’t  refinance and had to sell their home in a depressed market and lost a great deal of money whilst the bank got all its interest and termination fees.  Perhaps unjust enrichment?

Justice?  I don’t think so and it brings up a number of questions.

If a party to a contract has the ability to cancel a contract at will, was there a contract in the first place? I thought a contract was something which both parties could rely on for some mutual benefit for the natural life of that contract. If one party can vary the terms of the contract or ‘change the agreement’ at will then surely there was no ‘agreement’ in the first place?

This is obviously a nonsense yet all banks include ‘terminate at will’ clauses into their standard form contracts whilst ignoring the whole concept of expectation damages or damages wrought by breach of contract in that the injured party I thought had a right to ‘expect’ a contract to go full term and if that is truncated by the other party then they are entitled to expect damages equivalent to the benefit they would have received if the contract had gone the agreed distance?

Secondly, as far as I understand it, there are many provisions in many acts which specifically preclude the alleged rights of banks to unilaterally and unconscionably vary contracted terms including S12BH (1)b of the ASIC Act. It seems the law is clear so how come the banks can and do ignore those legislated provisions?

Thirdly, why do the banks include such terms and indeed rely on them when pursuing innocent borrowers?  The only reason I can think of is that banks feel the need to misrepresent their actual ability to breach a contract through a form of unconscionable coercion. It seems they ‘coerced’ Mr and Mrs Bloggs into believing that they had to sell their home even though the bank knew full well that they did not have the right and that the Bloggs had little financial or legal knowledge and that they could not deal with a gaggle of lawyers from a multinational telling them through ‘official’ legal letters that they had to sell their home.  The Bloggs were not capable of dealing with the banks self adduced phalanx of power and the banks knew it and indeed depended on it!  Surly this is misrepresentative and unconscionable coercion at its worst?

Recently we have been in a situation where we have had to take three different banks to the Financial Ombudsman Service [FOS] for what I considered legal and contractual breaches even though each bank incorporated within the standard terms and conditions their ability to ignore the law and basically do whatever they liked.  We have won all three with each bank found guilty of breaching the code of banking practice.  They were forced to rectify their actions and pay damages.
But key is that for FOS to make this determination it must have read down the bank’s own published terms which stated that the bank could in effect do what it likes.  That term and its implied power was read down and discounted by FOS as a legal body using the intent and practice of the law.

Yet, those sorts of clauses are still very much a part of standard form contracts.

My question and dilemma is – ‘How can banks publish terms and conditions with impunity which obviously breach the law knowing that those terms are indeed ‘unfair’ and will confuse the average borrower to the advantage of the bank?’  Surely, this is ‘unjust enrichment’?  The banks know that 99.99% of people will just accept the banks terms without question just because they are a bank with lots of lawyers and as a consequence must be right.

Perhaps they aren't right?