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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
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.


b) Returning the goods to the owner. Free from charge and encumbrances These conditions and warranties cannot be excluded from the agreement. Legal ownership 5.12 Termination Hirer may terminate before final payment or when the installment falls due by:a) Giving owner written notice of termination. Right to sell 2. Merchantability 3. Duties of the Hirer a) Take delivery b) Pay installments c) Take care of the goods d) Continue hiring for the agreed period. Quiet possession enjoyed by hirer 6.S. Fitness for particular purpose 4. S. 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. e) Notification of change of address. 1. compensate the hirer of any loss or liability arising by reason of any defect in the goods. Duties of Owner a) Deliver the goods to the hirer b) Notification of defects of title or otherwise c) Indemnity. 8 Implied Conditions and Warranties in the HP Agreement. Any provisions in the agreement providing for a larger payment than one half of the total hire-purchase price shall be void. 2 .

The court may make the following orders:a) For delivery of all goods to owner. 3 . The Owner is required to reimburse additional unexpected expenses. 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. The owner can only claim or enforce any wrong by way of a suit. Hirer returns the goods at his own expense to the premises from which they were supplied to him or to wherever he is directed. 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. unless the hirer has defaulted in payment or terminated the agreement. 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.If the hirer has not taken reasonable care of the goods he shall be liable to pay damages for the failure. 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. c) The guarantor would be entitled to recover all sums paid by him or any security given by him.