linked transaction

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(under the Consumer Credit Act 1974) A transaction (except one for the provision of security) that is linked to, but not part of, a regulated agreement (the principal agreement) and is entered into by a debtor or hirer with any other person. A linked transaction may comply with a term of the principal agreement (e.g. if the principal agreement requires that the goods be insured with X) or it may be financed by the principal agreement if the latter is a debtor-creditor-supplier agreement. Alternatively it may be suggested by a creditor or owner to the debtor or hirer. The latter then enters into the linked transaction either to induce the creditor or owner to enter into the principal agreement, or for some other purpose related to the principal agreement, or – when the principal agreement is a restricted-use credit agreement – for a purpose related to a transaction financed by the principal agreement.

Subjects: Law.

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