Part II Regulated And Prohibited Activities

Enforceability of agreements

C127 Agreements made through unauthorised persons.

F11

This section applies to an agreement that—

a

is made by an authorised person (“the provider”) in the course of carrying on a regulated activity,

b

is not made in contravention of the general prohibition,

c

if it relates to a credit-related regulated activity, is not made in contravention of section 20, and

d

is made in consequence of something said or done by another person (“the third party”) in the course of—

i

a regulated activity carried on by the third party in contravention of the general prohibition, or

ii

a credit-related regulated activity carried on by the third party in contravention of section 20.

F21ZA

But this section does not apply to a regulated credit agreement or a regulated consumer hire agreement unless the provider knows before the agreement is made that the third party had some involvement in the making of the agreement or matters preparatory to its making.

1A

F4An agreement to which this section applies is unenforceable against the other party.

C12

The other party is entitled to recover—

a

any money or other property paid or transferred by him under the agreement; and

b

compensation for any loss sustained by him as a result of having parted with it.

3

“Agreement” means an agreement—

a

made after this section comes into force; and

b

the making or performance of which constitutes, or is part of, the regulated activity in question carried on by the provider.

4

This section does not apply if the regulated activity is accepting deposits.

F35

For the purposes of subsection (1ZA)—

  • “regulated consumer hire agreement” has the meaning given by article 60N of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (S.I. 2001/544);

  • “regulated credit agreement” has the meaning given by article 60B of that Order.