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On appeal from: [2010] CSIH 49

The appellant raised an action in the Sheriff Court in seeking a declarator that he had validly rescinded both the contract of sale and the credit agreement following his return of a laptop to PC World after being sold it on the basis that it had an internal modem, which it did not. On appeal it was held that he had not been entitled to rescind the credit agreement under the Consumer Credit Act 1974, s 75.

The Supreme Court unanimously allowed the appeal. The purpose of a restricted-use credit agreement is to finance a transaction between the consumer and the supplier. Where, as here, the contract is tied to a particular transaction, it has no other purpose. The rescission of the supply agreement excuses the innocent party from further performance of any obligations he has under it. The debtor to a debtor-creditor-supplier agreement on rejecting the goods and thereby rescinding the supply agreement for breach of contract may also rescind the credit agreement by invoking a condition which the law implies a term into such an agreement: that it is conditional upon the survival of the supply agreement.

For judgment, please download: [2014] UKSC 21
For Court’s press summary, please download: Court’s Press Summary
For a non-PDF version of the judgment, please visit: BAILII