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Hire Purchase

This is a contract of hiring with an option to purchase. The Property in the goods does not pass with
possession and the owner may recover the goods from the purchaser.
Section 4 of the Hire Purchase Act specifies that a hire purchase agreement(HP Agreement ):a) Must be in English
b) Registered within 30 days of execution and
c) The payment of the prescribed fees that is, stamp duty and registration fees must be made,
The effect of non-registration is that the agreement is rendered unenforceable against the hirer and the
security is also unenforceable.
Statutory requirements relating to a HP Agreement (S. 6)
a) The owner must inform the hirer of the cash price.
b) Hirer must have inspected the goods to which the labels stating the cash price are attached or
c) Hirer has selected the goods by referring to a catalogue or advertisement or price list which
stated the cash price.
d) Specification of the amounts and date of payment of each installment
e) Notice setting out the hirer's rights.
f) Description of the goods that is sufficient to identify them.
S.7 Protection of the Hirer
The following statements or provisions are void in the agreement:a) Clauses allowing owner to enter the premises of the hirer for the purposes of repossessing the
goods.
b) Clause that relieves the owner of liability for such entry
c) any clause that imposes liability on the hirer in excess of that imposed by s. 12 by reason of
termination of the contract by him
d) any clause that makes any person acting on behalf of the owner in connection of the agreement
an agent of the hirer
e) any clause that relieves the owner of liability for the acts or default of any person acting on his
behalf in connection with the formation of the agreement.

S. 8 Implied Conditions and Warranties in the HP Agreement.


1. Right to sell
2. Merchantability
3. Fitness for particular purpose
4. Legal ownership
5. Quiet possession enjoyed by hirer
6. Free from charge and encumbrances
These conditions and warranties cannot be excluded from the agreement.
Duties of the Hirer
a) Take delivery
b) Pay installments
c) Take care of the goods
d) Continue hiring for the agreed period.
e) Notification of change of address.
Duties of Owner
a) Deliver the goods to the hirer
b) Notification of defects of title or otherwise
c) Indemnity; compensate the hirer of any loss or liability arising by reason of any defect in the
goods.
S.12 Termination
Hirer may terminate before final payment or when the installment falls due by:a) Giving owner written notice of termination.
b) Returning the goods to the owner.
Hirer is liable to pay all installments due by that time Pay any sum that will be his final payment not
less than half of the total hire-purchase price unless a lesser sum is specified in the agreement. Any
provisions in the agreement providing for a larger payment than one half of the total hire-purchase
price shall be void.
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If the hirer has not taken reasonable care of the goods he shall be liable to pay damages for the failure.
Hirer returns the goods at his own expense to the premises from which they were supplied to him or to
wherever he is directed.
The Owner is required to reimburse additional unexpected expenses.
Completion of the Agreement
Written Notice by the hirer either
a) During continuance of the agreement or
b) Within 28 days after the owner has repossessed and additional costs that may have been
incurred such as storage or repair.
S.15 Recovery of Possession of Goods
Where 2/3 of the hire-purchase price is paid the owner os precluded from enforcing the rights of
recovery of possession from the hirer otherwise than by filing a suit, unless the hirer has defaulted in
payment or terminated the agreement.
In the event the Owner violates the above provision:a) HP Agreement would come to an end automatically
b) Hirer would be released from any liability under the HP Agreement and would be entitled to
recover all sums paid by him or any security given by him.
c) The guarantor would be entitled to recover all sums paid by him or any security given by him.
The owner can only claim or enforce any wrong by way of a suit. The court may make the following
orders:a) For delivery of all goods to owner.
b) For delivery of part of the goods to the owner and transfer of title to the goods to the hirer for
the remainder of the goods
c) For delivery of part of the goods to the owner and postpone operation of the order or condition
that the hirer pays the applied balance as the court directs.