HL Deb 06 May 1974 vol 351 c343

Facts. U, a moneylender, lends £500 to V (an individual) knowing he intends to use it to buy office equipment from W. W introduced V to U, it being his practice to introduce customers needing finance to him. Sometimes U gives W a commission for this and sometimes not. U pays the £500 direct to V.

Analysis. Although this appears to fall under section 11(1)(b), it is excluded by section 11(2) and is therefore (by section 11(4)) an unrestricted-use credit agreement. Whether it is a debtor-creditor agreement (by section 12(c)) or a debtor-creditor-supplier agreement (by section 13(c)) depends on whether the previous dealings between U and W amount to "pre-existing arrangements", that is whether the agreement can be taken to have been entered into "in accordance with, or in furtherance of" arrangements previously made between U and W, as laid down in section 182(1).

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