You are on page 1of 3

HALABY v.

WIREDU [1973] 2 GLR


249-253
Relevant Statute: Section 66Formalities Relating to Hire-Purchase Contracts.
(1) Before any hire-purchase contract is entered into in respect of any goods, the seller shall state in
writing to the prospective buyer (otherwise than in the note or memorandum referred to in subsection (3)),
a price at which the goods may be purchased by him for cash (in this Part referred to as the "cash price"),
and shall also state the cash price to the purchaser orally.
(2) Subsection (1) shall be deemed to have been sufficiently complied with if the seller states the cash
price to the buyer orally, and
(a) if the buyer has inspected the goods or like goods and at the time of his inspection tickets or labels
were attached to or displayed with the goods clearly stating the cash price, either of the goods as a whole
or of all the different articles or sets of articles comprised therein; or
(b) if the buyer has selected the goods by reference to a catalogue, price list, or advertisement, which
clearly stated the cash price either of the goods as a whole or of all the different articles or sets of articles
comprised therein.
(3) A seller shall not be entitled to enforce a hire-purchase contract or any contract of guarantee relating
thereto or any right to recover the goods from the buyer, and no security given by the buyer in respect of
money payable under the hire-purchase contract or given by the guarantor in respect of money payable
under such a contract of guarantee as aforesaid shall be enforceable against the buyer or guarantor by any
holder thereof, unless the requirement specified in subsection (1) has been complied with, and
(a) a note or memorandum of the agreement is made and signed by the buyer and by or on behalf of all
other parties to the agreement, and
(b) the note or memorandum contains a statement of the hire-purchase price and the cash price of the
goods to which the agreement relates and of the amount of each of the instalments by which the price is to
be paid and of the date or the mode of determining the date upon which each instalment is payable, and
contains a list of the goods to which the agreement relates sufficiently to identify them, and
(c) the note or memorandum contains a notice which is at least as prominent as the rest of the contents of
the note or memorandum, in the terms prescribed in the First Schedule to this Act, and
(d) a copy of the note or memorandum is delivered or sent to the buyer within fourteen days of the
making of the agreement.

FACTS: The plaintiff sold his business and his stock-in-trade coupled with the business
premises to the Defendant in two separate agreements. In the first agreement, the value of the
goods was fixed with an option to effect payment by fixed monthly installments. In the second
agreement however which was in respect of the purchase of the premises, a purchase price was
agreed upon with the possibility of monthly installments at a fixed quantum/price. Subsequently
the amount for the monthly installments were reduced but still left the Defendants indebted with
significant amounts.
The Plaintiff then proceeded to file for summary Judgment since his claim was in respect of
debts owed to him in accordance with the Order 14 Rule 1 of the High Court Civil Procedure
Rule, despite the fact that the Defendants had already entered appearance. Thus the Later filed
for a leave by the court so that they could defend the action as they argued that based on the fact
that the agreement stipulated that the monthly installments were payable over a period of 5

Months, these agreements were thus in nature Higher-purchase contracts/agreements as defined


in Section 81 of Act 137. They further contended that since the creation of those agreements
contravened the requirements of Section 66(1) of the ACT 137 in respect of Hire-purchase
agreements, they were to be held as invalid.

PROCEDURAL HISTORY: High Court

HOLDINGS: Judgment in favor of Plaintiff


The agreements in the instant case were not hire-purchase agreements and fell outside the hirepurchase provisions of Act 137.
The sale of a business was not the sale of goods within the meaning of Act 137. The sale of a
business was a sale of more than the goods that were sold by the businessman. It included the
sale of goodwill and a whole [p.250] business organization. In the instant case what was sold
consisted also of an interest in land and this could not be the sale of goods.

RATIO DECIDENDI by KORANTENG-ADDOW J


Section 81(1) of ACT 137 defines a Hire-Purchase agreement or "hire-purchase contract" as a
contract of sale of goods in which the price is to be paid in five or more instalments;
The learned KORANTENG-ADDOW J argued that the definition of hire-purchase agreement as
presented in Section 81 of the Act could only be in reference to the meaning of Hire-purchase
agreement as stated in Section 66 of the same Act. Thus the Learned Judge tries to explain
here that once cannot solely define any contract as a Hire-purchase contract just because
its purchase is to be paid in five or more installments. The learned Judge further contends that
not relying alone on the definition stated in Section 81, the same Section 66(1) goes on further to
define a "hire-purchase price" among other things [p.252] as excluding "any sums payable as a
penalty or as damages or compensation...." In the light of all these agreements, KORANTENGADDOW J held that the purchase price in every credit sale transaction could not be
automatically held as a Hire-purchase price.
The Learned Judge further contended that just because the Act didnt specifically draw a
distinction between purchase price and Hire-purchase price didnt mean that the two
terminologies could be used interchangeably as soon as the payment or purchase price was to be
made in at least 5 installments. She further argued that the fact that the Act is compounded in
such a way that Section 1-65 deals with simple transactions whereas 66-84 deals with Hire
purchase agreements is proof enough that the two terms are not interchangeable. KORANTENADDOW further explains that the intention of the Parties in entering into the contract and how

they drafted it would be the primary evidence to see whether the contract of sale was merely a
credit sale or instead a Hire-purchase agreement.

KORANTENG-ADDOW in her further explanation of her ratio argues that a contract of Sale of
a Business did not in her opinion constitute a contract that could be categorized under the sale of
goods. She argues that the sale of a business the sale of Goodwill and that of a whole
organization, with in the present instance a sale of an interest in Land (In respect of the Business
premises.) Thus in the Learned Judges opinion, such could not be classified under goods.