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Land Law - The equitable right to redeem – the doctrine of ‘clogs and fetters’
This category can include a variety of topics, but generally speaking, it will relate to any unjust terms in the mortgage. A clause that forbids the mortgagor from repaying the mortgage in full would serve as an example.
any phrase that modifies the relationship between the mortgagor and the mortgagee.
In the end, this theory aims to shield the mortgagor from needless limitations or constraints and permits equity to "step in" in a number of ways to safeguard the mortgagor. The following practice example demonstrates this:
Example
Don obtained a £106,000 mortgage from the Tyne and Wear Building Society in order to buy the property. One of the terms of the mortgage was that the complete payback (redemption) could not occur until six weeks prior to the end of the mortgage term. Would the equitable right to redeem the mortgage be hindered by this clause, or would it be enforceable?
Based on the facts of Fairclough v. Swan Brewery (1912), it was decided that the term was invalid because it deemed the redemption right to be "illusionary." The mortgage would be practically irredeemable and the equitable right to redeem would be nullified. It's also crucial to remember that if a clause postpones the right to redeem but does not entirely eliminate the right or cause hardship for the mortgagor, it might be accepted. A mortgagor cannot use the existence of these clauses as a way to back out of a mortgage arrangement they find unacceptable.
A provision giving the mortgagor the right to redeem does not automatically become enforceable just because it is present. The right must provide the mortgagor with something that is manifestly advantageous to them; it cannot just be a "illusion."
This approach may also apply in cases where the mortgagee is attempting to obtain a collateral benefit from the mortgagor by requiring the mortgagee to be the only source for certain purchases, such insurance. But it's crucial to remember that
If it can be demonstrated that any collateral terms are immoral, equity will only intervene and enable the court to set them aside. When these terms are reasonable and end when the mortgage is repaid, there is nothing stopping them from being included in the mortgage conditions.
Important word: collateral benefit
a circumstance in which one of the parties to the contract—typically the mortgagee—uses their greater negotiating position or influence to secure terms for the mortgage that are much more advantageous to them.
This category can include a variety of topics, but generally speaking, it will relate to any unjust terms in the mortgage. A clause that forbids the mortgagor from repaying the mortgage in full would serve as an example.
any phrase that modifies the relationship between the mortgagor and the mortgagee.
In the end, this theory aims to shield the mortgagor from needless limitations or constraints and permits equity to "step in" in a number of ways to safeguard the mortgagor. The following practice example demonstrates this:
Example
Don obtained a £106,000 mortgage from the Tyne and Wear Building Society in order to buy the property. One of the terms of the mortgage was that the complete payback (redemption) could not occur until six weeks prior to the end of the mortgage term. Would the equitable right to redeem the mortgage be hindered by this clause, or would it be enforceable?
Based on the facts of Fairclough v. Swan Brewery (1912), it was decided that the term was invalid because it deemed the redemption right to be "illusionary." The mortgage would be practically irredeemable and the equitable right to redeem would be nullified. It's also crucial to remember that if a clause postpones the right to redeem but does not entirely eliminate the right or cause hardship for the mortgagor, it might be accepted. A mortgagor cannot use the existence of these clauses as a way to back out of a mortgage arrangement they find unacceptable.
A provision giving the mortgagor the right to redeem does not automatically become enforceable just because it is present. The right must provide the mortgagor with something that is manifestly advantageous to them; it cannot just be a "illusion."
This approach may also apply in cases where the mortgagee is attempting to obtain a collateral benefit from the mortgagor by requiring the mortgagee to be the only source for certain purchases, such insurance. But it's crucial to remember that
If it can be demonstrated that any collateral terms are immoral, equity will only intervene and enable the court to set them aside. When these terms are reasonable and end when the mortgage is repaid, there is nothing stopping them from being included in the mortgage conditions.
Important word: collateral benefit
a circumstance in which one of the parties to the contract—typically the mortgagee—uses their greater negotiating position or influence to secure terms for the mortgage that are much more advantageous to them.
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