Yeoman Credit Limited v Waragowski
Court of Appeal 27 June 1961 (3 All ER 145, 105 Solicitors' Journal 588)

This case considered whether termination of hire-purchase agreements allows owners to charge hirers the "one half" termination charge, rather than to claim their actual loss. Although brought under the then Hire Purchase Act, similar provisions are found in s.100 of the Consumer Credit Act 1974.

The hirer defaulted on a regulated hire-purchase agreement, having paid only the deposit. The question posed was whether an owner was bound to receive half the total hire-purchase price as laid down in the legislation, or whether compensation for the owner's loss, being less than the statutory amount, should be claimed. The actual agreement contained a clause giving the owner the right to choose whether to go for the half rule or settlement.

It was held that the owner was entitled to settlement rather than the one half rule.

Implicitly, owners have a duty to mitigate their losses, and must claim the lowest amount that will compensate them for those losses.

{This decision explains why owners in hire-purchase agreements, and creditors in conditional sale agreements, sometimes sue for amounts less than the amount apparently due under the termination rights of the original agreement.}