Law of Hire Purchase Governed by The HirePurchase

Law of Hire - Purchase Governed by The Hire-Purchase Act 1967

Meaning of Hire Purchase Contract An agreement wherein an owner agrees to hire goods to the hire with an option for the hirer to purchase the goods. To regulate the form and contents of hire-purchase agreement and to define the legal rights, duties and liabilities of hirers, owners and other parties to hirepurchase agreements.

Goods Specified S. 1 (2) Hire Purchase Act in First Schedule can be divided into 2: Consumer Goods – S 2(1)Hire Purchase Act means goods purchased for personal, family or household purposes Motor Vehicles: i. Invalid carriages ii. Motor Cycles iii. Motor cars including taxi, cabs and hire cars iv. v. Goods Vehicles Buses S 1(2) HPA 3

Definations Section 2(1) of Hire-Purchase Act • Owner ü A person who let goods to be hirer under a hire-purchase agreement ü A person to whom the owner’s rights or liabilities under the agreement have passed by assignment or by operation of law S 2(1)HPA 4

Definations Section 2(1) of Hire. Purchase Act • Hirer ü the person who takes or has taken goods from an owner under a hirepurchase agreement ü a person to whom the hirer’s rights or liabilities under the agreement have passed by assignment or by operation of law S 2(1)HPA 5

FORMATION OF HIRE-PURCHASE AGREEMENTS Before hirepurchase agreement is entered During formation of Hire. Purchase Agreement After the making of hire-purchase agreement 6

Before any hire-purchase agreement is entered Part 1 of the Second Schedule S. 4(1)(a) Stage of negotiationleading-hire purchase agreement Done To the potential Hirer S 4(1)(a)HPA Owner or any person other than the Dealer acting on behalf Shall serve 7

During formation of Hire-Purchase Agreement S. 4(2) S. 4(1)(b) Stage of negotiationleading-hire-purchase agreement Shall serve To the potential Hirer Done When the potential hirer As acknowledge receipt Dealer Part 1 & 2 of the Schedule S 4(1)(b)(i)(ii) 2 nd S 4(3)when the potential hirer recieved Part 1 &11 of 2 nd Schedule Receive Part 1 & 2 of the 2 nd Schedule The potential hirer need to sign the document No Obligation to enter the hire-purchase agreement 8

CONTENTS OF HIRE-PURCHASE AGREEMENT- SPECIFIC A DATE S. 4 C HIRE-PURCHASE ACT SPECIFIC THE PLACE AT WHICH THE PAYMENTS ARE TO BE MADE SPECIFIC THE NUMBER OF INSTALMENTS TO BE PAID CONTAIN A DESCRIPTION OF GOODS SPECIFIC THE AMOUNTS OF EACH INSTALMENTS SPECIFY THE ADRESS WHERE THE GOODS UNDER THE HIRE-PURCHASE AGREEMENT SPECIFY THE PERSON TO WHOM TO BE MADE SPECIFY THE TIME FOR THE PAYMENT S 4. C HPA 9

After the making of hirepurchase agreement S. 5(1) Hire – Purchase Agreement Within 14 days after making hirepurchase agreement Owner need to be serve Hirer Quarantors Each copy of the agreement 11/23/2020 10

After the making of hire-purchase agreement S. 5(1 A) S 5(2) S 5(3) • FAILED to fulfilled the section, owner cannot enforce the agreement • At any time before the final payment, owner need to supply to hirer WITHIN 14 days a copy of Memorandum or Note of Agreement on payment of priscribed Fee, if any • Any part of the payment consists amount paid for the insurance policy in respect the goods – the owner- within 7 days after receiving the policy, need to sent a copy that affect the rights the hirer under the policy 11

IMPLIED TERMS IN HIRE-PURCHASE AGREEMENT A breach of condition • Is a serious breach and it goes to the ‘root’ of the contract • Entitle the party not in breach to repudiate the contract and sue for damages. A breach of warranty • Is a less serious breach • Does not entitle the party not in breach to repudiate the contract and sue for damages only Implied Terms 12

IMPLIED CONDITIONS S 7(1)(b) Right to sell S 7(2) Merchantable Quality Implied Condition S 7(3) Fitness 13

S 7(1)(b) Hire Purchase Act Right to sell • The owner shall have the right to sell the goods at the time when the property is to pass • Ahmad Ismail v Malayan Motor Co. & others Implied Conditions 14

• S 7(2) Hire Purchase Act Merchantable Quality 11/23/2020 The goods shall be of merchantable quality. However, no such condition will be implied in the following circumstances: a) Where the hire has examined the goods or a sample thereof, as regards defects which the examination ought to have revealed ( S. 7(2)(a) ) or b) If the goods are second-hand goods and the agreement contain a statement to the effect that: i. the goods are 2 nd hand; and ii. All conditions and warranties as to quality are expressly negatived, and the owner proves that the hirer has acknowledged in writing that the statement was brought to his notice. ( S 7(2)(b) ) • Lau Hee Teah v Hargill Engineering. Sdn Bhd & others • Traders Finance Corp Ltd v Rourke & others Implied Conditions 15

• S 7(3) Hire Purchase Act Fitness That where the hirer makes known to the owner the particular purpose for which the goods are required, the goods must be reasonably fit for that purpose, except in the following circumtances: i. if the goods are second-hands; and ii. all conditions and warranties of fitness and suitability are expressly negative, and the owner proves that the hirer has acknowledged in writing that the statement was brought to his notice. Implied Conditions 16

IMPLIED WARANTIES S 7(1)(c) S 7(1)(a) Hirer enjoy quite possession of the goods 11/23/2020 Implied Waranties Goods must be free from any charge or encumbrance at the time when the property is to pass. 17

STATUTORY RIGHTS OF HIRER S 9: To be supplied documents and information S 12: To assign his right, title and interest under hirer-purchase agreement S 10: To require the owner to appropriate payments made in hire –purchase agreement S 13: To have his right, title and interest passed on by operation of law S 11: To apply to the magistrate’s Court for an order approving the removal of goods to another place S 14: To complete the purchase of goods earlier than due date S 15: To terminate the hiring Statutory rights of hirer 18

Statutory Right S 14 of Hire Purchase Act. Early Completion of Agreement Right of Hirer to complete the purchase of goods by paying or tendering to the owner the net balance due under the hire – purchase agreement

S. 14(1) of Hire-Purchase Act The hirer under a hire – purchase agreement may If he has given notice in writing to the owner of his intention to do so on or On or before the day specified for that purpose in the notice Complete the purchase of the goods by Paying or tendering to the owner The net balance under the agreement 20

S 14(2) Hire Purchase Act Statutory Rights Of Hirers 11/23/2020 • Any amount (other than the deposit) paid or provided by or on behave of the hirer under the agreement • The statutory rebate for terms charges; and • If the hirer requires any contract of insurance to be cancelled, the statutory rebate for insurance 21

S 14(3) Hirer- Purchase Act • • The rights conferred on hirer • 11/23/2020 At any time during the continuance of the agreement Where the owner has taken possession of the goods (within 21 days after the owner has served a notice in form set out in the Fifth Schedule) in addition to the net balance due together with reasonable costs(if any)of storage, repair or maintenance of the goods incurred by the owner incidental to his taking possession of goods. Where the hirer has returned the goods to the owner within 21 days after the service on him of the notice in the form set out in the Fifth Schedule, upon payment to the owner(within 21 days after the owner has served a notice in the form set out in the Fifth Schedule) the net balance due under The Act. copyright 2006 www. brainybetty. com 22

Statutory Rights Of Hirers S 15 of Hire Purchase Act. Right of Hirer to Terminate The Hiring

Statutory Rights Of Hirers S 15(1) Hire-Purchase Act • The hirer of any goods comprised in a hirer-purchase may terminated the agreement by returning the goods to the owner during ordinary business hours at the place at which the owner ordinarily carries on business or to the place specified for that purpose in the agreement 24

Statutory Rights • Where the nature of the goods Of Hirers comprised in a hire-purchase S 15(2) Hire-Purchase Act agreement or the facililtes available at the place of business that is would be impracticable to return the goods to such a place, the hirer may terminate the agreement by returning the goods to any place agreed to by the parties to the agreement 25

Statutory Rights Of Hirers S 15(3) Hire-Purchase Act • • • Where the parties fail to agree, the hirer who proposes to return goods to the owner under this section may, subject to sub-section(4), apply to a court of a Magistrate for an order fixing the place which the goods may be returned, and the court: (a) shall fix the place that is in its opinion reasonable having regard to all the circumstances surrounding the transaction; (b) may order that, subject to the goods being returned to the owner, the agreement shall be determined on such date as is specified in the order, not being the date the hirer required the owner to nominate a reasonable place for the return of the goods. 26

Statutory Rights • Notice of an application Of Hirers under subsection (3) shall be given to the owner by the hirer S 15(4) Hire-Purchase Act 27

Statutory Rights Of Hirers S 15(5) Hire-Purchase Act • Where a hire-purchase agreement is determined pursuant to this section: • (a) The hirer may require the owner to sell the goods to any person introduced by the hirer who is prepared to buy the goods for cash at a price agreeable to the owner (b) where the value of the goods at the time when it is returned to the owner is more than the balance outstanding under the hire-purchase agreement, the hirer is entitled to the difference which is recoverable as a debt due; (c) where the value of the goods at the time when is returned to the owner is less than the balance outstanding under the hire-purchase agreement, the owner is entitled to the difference which is recoverable as a debt due. • • 28

Statutory Rights Of Hirers S 15(6)(a) Hire-Purchase Act • For the purpose of this section: • (a) ‘ balance outstanding under the hirerpurchase agreement’ means the total sum payable by the hirer to complete the purchase of goods to which the agreement relates and the amount derived from interest on a overdue installments which has yet to be paid less; • (i) the amount paid by or on behalf of the hirer excluding • (ii) statutory rebate for terms charges; and • (iii) statutory rebate for insurance. If any; 29

Statutory Rights Of Hirers S 15(6)(b) Hire-Purchase Act • “value of the goods at he time when it is returned to the owner “means: • (i) the best price that could reasonably be obtained by the owner; or • (ii) If the hirer had introduced a person who had brought the goods for cash, the amount paid by that person. 30

REPOSSESSION BY OWNER • The owner has the right to recover possession of the goods if the hirer commits a breach of his obligations under the hire-purchase agreement. • S 16 Hire-Purchase Act • Phang Brothers Motors Sdn Bhd v Lee Aik Seng • Public Prosecutor v Mohamed Nor 11/23/2020 31

S 16(1) Hirer Purchase Act : stated that notices are required to be given to hirer in the event of repossession the goods If a hirer defaults in two successive payments or default in the final payments He must serve on the hirer a notice in writing of his intention to retake possession The owner must personally deliver to hirer a document acknowledging receipt of the goods. If the hirer was not present at that time, the owner must sent to him, immediately after taking possession of the goods, a document acknowledging receipt of the goods. The documents must contain a description of the goods and the date, time and place at which the owner took possession of it The owner must serve on the hirer and guarantor, a notice in writing in the form set out in the Fifth Schedule within 21 days after he has taken possession of the goods. S 16 Hirer Purchase Act The period fixed by notice must have expired and must not be less than 21 days The owner cannot sell or dispose of the goods without the written consent of the hirer until the expiration on 21 days after the date of service of the said noiice. 32

S 16(1 A) Hirer Purchase Act Where a hirer is deceased, an owner shall not exercise any power of taking possession of goods comprised in a hire-purchase agreement relating to the payment of instalments unless there have been 4 successive defaults of payments.

S 16 A : provides that a hirer who returns goods comprised in a hirepurchase agreement within 21 days after service on him of notice in form set out in the Fourth Schedule shall not liable to pay: The cost of repossession The cost incidental to taking repossession The cost of storage 34

S 17 of Hire- Purchase Act After repossession , the owner must not sell or dispose of the goods for 21 days S 18 of Hire- Purchase Act the hirer’s rights and immunities when goods repossessed

S 18(1): where the owner takes possession of any goods under section 16: S 18(1)(a) The hirer may within 21 days after service on him of the notice referred to in S 16(3) by giving to the owner a notice in writing signed by the hirer or his agent- S 18(1)(a)(i) Require the owner to re-deliver to or the order of the hirer(subject to the compliance by hirer S 19) the goods that have been repossessed; or S 18(1)(a)(ii) Require the owner to sell goods to any person introduced by the hirer who is prepared to buy the goods for cash at a price not less than the estimated value of the goods set out in the first mentioned notice. 36

S 18(1) (b) : the hirer may recover from the owner If the value of the goods at the time of the owner so taking possession thereof is less than the net amount payable but the total of that value and the amount paid or provided, whether by cast or other consideration, by or on behalf of the hirer under the agreement exceeds the net amount payable – the difference between that total and the net amount payable; or If the value of the goods at the time of the owner so taking possession thereof is equal to or greater that the net amount payable –the total of that value and the amount paid or provided, whether by cash oe other consideration, by or on behalf of the hirer under the agreement, less the net amount payable. 37