Gp4Q3 - Hire Purchase Presentation.ppt

HIRE PURCHASE Presented by : Group 4

"roup # $uestion %

Hire-purchase is basically a purchase through credit in which the hirer purchases by way of instalment. Hire-purchase transactions are governed by the Hire-Purchase Act 1967. efine the meaning of hire-purchase! describe the formation of hire-purchase agreement and the important terms in hire-purchase agreements.

efinition of Hire Purchase

&ormation of Hire Purchase Agreement The formation of a hire purchase agreement shall cover three different stages as follows a.

Pre-contract obligation

b.

Construction of hire purchase agreement

c.

Post-contractual obligations

Pre-contract 'bligations o

Requires owner to give a prospective hirer a written statement in accordance with the form set out in the second schedule. In case of a dealer, the schedule requires information on the description of goods and a summary of the financial obligations of the prospective hirer.

o

The prospective hirer is not obliged to enter into a transaction and therefore is not bound to mae any payment for the preparation or service of such statement.

o

!ailure to observe the obligations shall render the hire-purchase agreement void.

(onstruction of Hire Purchase Agreement o

"ny hire purchase agreement must be made on writing. !ailure to observed this requirement would render the agreement void and the owner will be guilty of an offence.

o

Requires the hire purchase agreement to be signed or on behalf of all parties to the agreement. The hirer must not sign a blan form or not duly completed as the requirement of this section.

Post-contract 'bligations o

" copy of the hire-purchase agreement to be sent to the hirer and guarantors #if any$ within %& days after it is made otherwise it will be unenforceable by the owner.

o

"ny part of the total amount payable consists of an amount paid or to be paid under a policy, the owner must serve on the hirer a copy of the insurance payment receipt. The owner must also serve a copy of the policy within seven days of its receipt.

'very hire purchase agreement shall contain( #i$

specify a date on which the hiring shall be deemed to have commenced)

#ii$ specify the number of instalments to be paid under the agreement by the hirer) #iii$ specify the amounts of each of these instalments and the person to whom and the place at which the payments of these instalments are to be made) #iv$ specify the time for the payment of each of those instalments) #v$ contain a description of the goods sufficient to identify them) #vi$ specify the address where the goods under the hire-purchase agreement are ept.

)mplied (onditions o

o o

The owner has the right to sell the goods at the time when the property is to pass The goods sold to the hirer must be merchantable quality The goods must be fit for the hirer*s purpose

)mplied *arranties o o

The hirer must en+oy quiet possession of the goods The goods are free from any charge or encumbrance created by the owner in favour of any third party

+iability of 'wner and ealer for ,isrepresentation o

irer is entitled to claim against the owner or any person maing misrepresentation in the negotiations leading to the hire-purchase agreement

tatutory ights of the Hirer  o o o o o o

Right to a copy of statement of financial position Right to appropriation of payment when more than one agreement Right to apply for an order to remove goods Right to assign hirer*s right under the agreement Passing of right by operation of law Right to terminate the agreement

epossession of "oods by the 'wner  The owner has the right to repossess the goods from the hirer when( o

o

The hirer has defaulted in maing payments for two consecutive months, or The hirer has defaulted in maing the last payment

)nsurance o

The insurance has to tae the insurance cover in the name of the hirer for the goods under the hire purchase agreement