Mdsspreads took £9000 from me!!! Please help!

[gle101]

In my opinion these kinds of cases will keep reoccurring with regards to Spreadbetting and CFD’s.

As I’ve stated before, on several threads, I cannot see how many of the T&C’s of a Customer Agreement can be enforced by the firms if these terms attempt to break or alter the effects of other laws (such as contract law).

In an earlier post someone referred to the discovery of an old violin in a shop. If it was marked at £5 and you took it to the till there is absolutely no obligation for the shop keeper to sell it for £5.
HOWEVER... if the shop keep accepts your offer of £5 (based on his ‘Invitation To Treat’ ie marking it £5) then a contract is formed and the violin is yours. Transfer of ownership occurs, in law, at that point. There is nothing in law which allows the shop keeper to somehow reverse the contract and claim back ownership if he subsequently finds out that there was a pricing error – the shop keeper must consider the price which he is contracting at PRIOR to accepting the clients offer.

Now, correct me if I am wrong, doesn’t a spreadbet become enforceable from the moment that it is entered into? It is, in the eyes of the law, a contract like any other. This puts the spreadbetting firms in a particularly difficult situation if they have already issued a contract note which specifies that a clients bet (to open or close) has been accepted – legal title to that contract has passed to the client.

The firms obviously place certain T&C’s in the Customer Agreements to circumvent such basic contract law – my feeling is that this is not allowed. If it was allowed then every shop in the land would write such a caveat into its terms and conditions of sale – this would effectively allow every charity shop / antique dealer to claim back ownership of any item which it deemed that it had wrongly valued prior to selling. Implicitly this does not happen.

Why is the law any different for a Spreadbetting or CFD Firm?


Steve.

Steve, we are talking about a technical price feed error in the system, not a price that is given by a physical person. If the traded price does not in any way reflect the movement of the underlying asset. I honestly cannot see how your line of reasoning can hold any legal bearing, if such a case was brought to court. What will happen if you were trading in the real market, and a technical error occurs in the system feed? They would have been forced to reverse all the orders that slipped through during the period the technical error in the system occurred.

 

[stevespray]

Steve, we are talking about a technical price feed error in the system, not a price that is given by a physical person. If the traded price does not in any way reflect the movement of the underlying asset. I honestly cannot see how your line of reasoning can hold any legal bearing, if such a case was brought to court. What will happen if you were trading in the real market, and a technical error occurs in the system feed? They would have been forced to reverse all the orders that slipped through during the period the technical error in the system occurred.

I understand the facts as you are pointing them out but I am merely stating what I feel the contractual angle is.

It doesnt matter where or how the firm derive their price or whether this is done by computer or manually. The pivotal issue is one of when contractual acceptance takes place between the two parties. The law makes it clear that 'consideration' must take place BEFORE acceptance - there is no facility for consideration after the event. The various firms specify that they can retrospectively consider clients trades - from a legal perspective I would strongly challenge this since such a term or condition would massively disadvantage the client - Contract law is written the way it is so all parties know exactly when a contract is formed and therefore the point from which it is binding - Therefore to insert such a cavaet in a Customer Agreement is unlikely to be allowed since that clarity (of when a binding contract is formed) is lost to the client.

Secondly, the T&C of pretty much all the firms appear to specify that the client acknowledges that they are not betting directly on the underlying asset but instead on "the firms quotation" (or words to that effect). Most firms reserve the right to price their markets as they see fit. Therefore, in writing such a condition, the law would generally specify that the firm knew the risks involved in quoting such markets - just as they are warning the client that they can price their market how they see fit it would be regarded that they themselves are also acknowledging that situations may occur when they may price a market out of line from an underlying asset.

Although very simple the situation regarding the £5 violin is very applicable indeed.

Steve.

PS I am not suggesting that a particular firm has acted wrongly here - I'm just looking at the contractual obligations as I see them.

 

[Joey25]

The firm I've an account with has a force majeur clause, which includes amongst other things:

"any event which prevents us from maintaining an orderly market"

and

"the failure of any event upon which be base our prices"

Technology going haywire could fall under either of those definitions.

 

[Arbu]

Arbu, very interesting! Seems if you made a profit the prices were eronneous and ccorrect if a loss was made. I think it was even Anna O'neil who emailed me after i demanded a reason. Im definately up for some action. They should not be able to get away with this. Incidentally i see that they are regulated by the FSA which can only be a good thing here. Seems a bit drastic going to the Antarctic though!?

Hi, I'm back from the South Pole. Any developments on this, Zebedee?