Hire-Purchase
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LAWS OF MALAYSIA
REPRINT
Act 212
HIRE-PURCHASE ACT 1967
Incorporating all amendments up to 1 January 2006
PUBLISHED BY
THE COMMISSIONER OF LAW REVISION, MALAYSIA
UNDER THE AUTHORITY OF THE REVISION OF LAWS ACT 1968
IN COLLABORATION WITH
PERCETAKAN NASIONAL MALAYSIA BHD
2006
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HIRE-PURCHASE ACT 1967
First enacted
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1967 (Act No. 24 of
1967)
Revised
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1978 (Act 212 w.e.f.
15 November 1978)
PREVIOUS REPRINT
First Reprint
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2001
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LAWS OF MALAYSIA
Act 212
HIRE-PURCHASE ACT 1967
ARRANGEMENT OF SECTIONS
PART I
PRELIMINARY
Section
1.
Short title and application
2.
Interpretation
3.
Appointment of officers
PART II
FORMATION AND CONTENTS OF HIRE-PURCHASE
AGREEMENTS
4.
Requirements relating to hire-purchase agreements
4A. Hire-purchase agreement to be in writing
4B. Hire-purchase agreement to be signed, etc.
4C. Contents of hire-purchase agreement
4D. Separate agreement for every item of goods
5.
Copy of documents to be served on hirer
6.
(Deleted)
PART IIA
OPTION TO HIRER
6A. Option to hirer
6B. Right of owner to revise the base lending rate
6C. Right of hirer where the base lending rate is revised
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PART III
PROTECTION OF HIRERS AND GUARANTORS
Warranties and Conditions
Section
7.
Conditions and warranties to be implied in every hire-purchase
agreement
8.
L i a b i l i t y of the owner and person acting on his behalf for
misrepresentation
PART IV
HIRERS
Statutory rights of hirers
9.
Duty of owners and sellers to supply documents and information
10.
Appropriation of payments made in hire-purchase agreements
11.
Power of court to allow goods to be removed
12.
Assignments of rights under hire-purchase agreement
13.
Operation of law
14.
Early completion of agreement
15.
Power of hirer to determine hiring
16.
Notices to be given to hirer when goods repossessed
16A. Hirer who returns goods not liable to pay cost of repossession, etc.
17.
Owner to retain possession of goods repossessed for twenty-one days
18.
Hirer's rights and immunities when goods repossessed
19.
Power of hirer to regain possession of goods in certain circumstances
20.
Power of court to vary existing judgments or orders when goods are
repossessed
PART V
GUARANTORS
20A. Owner may require guarantors
21.
Provisions as to guarantors
22.
Guarantor not to be bound in certain cases
23.
Rights of guarantor against owner
24.
Rights of guarantor against hirer
25.
Guarantor not to seize
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PART VI
INSURANCE
Section
26.
Insurance of goods comprised in hire-purchase agreements
27.
Powers of court in relation to insurance contracts associated with hire-
purchase agreements
28.
Contents of contracts of insurance
29.
Application of Part VI
PART VII
GENERAL
30.
Limitation on terms charges
31.
Minimum deposits
32.
Certain payments, etc., not to be treated as deposits for the purposes
of this Part
33.
Power of court to reopen certain hire-purchase transactions
34.
Avoidance of certain provisions
35.
Provisions relating to securities collateral to hire-purchase agreements
36.
False statement by dealers, etc., in proposals
36A. Prohibition against collection of payment other than those in the Second
Schedule
36B. Prohibition against collection of payment by person other than owners,
dealers, agents, etc.
36C. Issue of receipt in respect of payments
36D. Owner to inform hirer where dealer, etc., has ceased to be authorized
to collect payment
37. Hirer may be required to state where goods are
38. Fraudulent sale or disposal of goods by hirer
39. Certain alterations, etc., of hire-purchase agreements to be of no effect
40. Second-hand goods
41. Power of court to extend time
42. Power of court to order delivery of goods unlawfully detained
43. Service of notices
43A. Substituted service
44.
Proof of service
45.
Size, type, etc., required in certain documents
46.
Penalty
47.
Liability of responsible officers of company
48.
Principal criminally liable for acts of servant or agent
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PART VIII
POWERS OF ENFORCEMENT
Section
49.
Declaration of office
50.
Power to enter premises and inspect and seize goods and documents
51.
Obstruction of officers
51A. Warrant admissible notwithstanding defects, etc.
51B. Powers of investigation
52.
Supply of information
53.
Information given by accused person admissible in evidence
54.
Disclosure of information
55.
Prosecution
55A. Court may order disposal of goods
56.
Compounding
56A. Protection of Controller, Deputy Controllers, Assistant Controllers,
etc.
PART IX
REGULATIONS, ETC.
57.
Regulations
57A. Power to amend Schedules
58.
Operation of certain laws
FIRST SCHEDULE
SECOND SCHEDULE
THIRD SCHEDULE
FOURTH SCHEDULE
FIFTH SCHEDULE
SIXTH SCHEDULE
SEVENTH SCHEDULE
Hire-Purchase
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LAWS OF MALAYSIA
Act 212
HIRE-PURCHASE ACT 1967
An Act to regulate the form and contents of hire-purchase agreements
and the rights and duties of parties to such agreements.
[11 April 1968, P.U. (B) 150/1968]
PART I
PRELIMINARY
Short title and application
1. (1) This Act may be cited as the Hire-Purchase Act 1967.
(2) This Act shall apply throughout Malaysia and in respect
only of hire-purchase agreements relating to the goods specified
in the First Schedule.
(3) (Deleted by Act A1234.)
(4) This Act shall apply only to hire-purchase agreements entered
into after the coming into operation of the Act.
Interpretation
2. (1) In this Act, unless the context otherwise requires--
"action" includes counter-claim and set off;
"base lending rate" means the minimum interest rate based on
owner's cost of funds and other administrative costs;
"consumer goods" means goods purchased for personal, family
or household purposes;
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"contract of guarantee" means, in relation to any hire-purchase
agreement, a contract made at the request, expressed or implied,
of the hirer to guarantee the performance of the hirer's obligations
under the hire-purchase agreement, but does not include the dealer
or a person engaged at the time of giving of the guarantee in the
trade or business of selling goods of the same nature or description
as the goods comprised in the agreement, and the expression
"guarantor" shall be construed accordingly;
"Controller", "Deputy Controller" and "Assistant Controller"
mean respectively, the Controller of Hire-Purchase, a Deputy
Controller of Hire-Purchase and an Assistant Controller of Hire-
Purchase appointed under subsection 3(1);
"dealer" means a person, not being the hirer or the owner or a
servant of the owner, by whom or on whose behalf negotiations
leading to the making of a hire-purchase agreement with the owner
were carried out or by whom or on whose behalf the transaction
leading to a hire-purchase agreement with the owner was arranged;
"goods" includes any replacements or renewals by the hirer of
any part or parts thereof and any accessories added or additions
made thereto by the hirer during the period of the hiring;
"hire-purchase agreement" includes a letting of goods with an
option to purchase and an agreement for the purchase of goods by
instalments (whether the agreement describes the instalments as
rent or hire or otherwise), but does not include any agreement--
(a) whereby the property in the goods comprised therein
passes at the time of the agreement or upon or at any time
before delivery of the goods; or
(b) under which the person by whom the goods are being
hired or purchased is a person who is engaged in the
trade or business of selling goods of the same nature or
description as the goods comprised in the agreement;
"hire-purchase price" means the total sum payable by the hirer
under a hire-purchase agreement in order to complete the purchase
of goods to which the agreement relates, exclusive of any sum
payable as a penalty or as compensation or damages for a breach
of the agreement;
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"hirer" means the person who takes or has taken goods from an
owner under a hire-purchase agreement and includes a person to
whom the hirer's rights or liabilities under the agreement have
passed by assignment or by operation of law;
"Minister" means, unless otherwise stated, the Minister for the
time being charged with the responsibility for consumer affairs;
"owner" means a person who lets or has let goods to a hirer
under a hire-purchase agreement and includes a person to whom
the owner's rights or liabilities under the agreement have passed
by assignment or by operation of law;
"prescribed" means prescribed by the Minister under this Act;
"statutory rebate"--
(a) in relation to terms charges--
(i) means the amount derived by multiplying the terms
charges by the sum of all the whole numbers from
one to the number which is the number of complete
months in the period of the agreement still to go
(both inclusive) and by dividing the product so
obtained by the sum of all the whole numbers from
one to the number which is the total number of
complete months in the period of the agreement
(both inclusive); or
(ii) where it is agreed in a hire-purchase agreement
that the terms charges have been calculated on a
simple interest basis at a rate specified in the
agreement on the amount outstanding from month
to month-means the amount of interest attributable
to the period of complete months still to go under
the agreement;
(b) in relation to insurance, means the sum of--
(i) the amount of premium paid in respect of any annual
period not yet commenced; and
(ii) the amount of premium paid in respect of the current
annual period less the amount of premium which
would have been paid at the insurers short period
rates for the period which the policy has been in
force provided no claim has arisen during this period;
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"third-party insurance" means any insurance in relation to liability
in respect of death or bodily injury caused by or arising out of the
use of a motor vehicle being insurance required by law;
"vehicle registration fees" means any amount to be provided
under a hire-purchase agreement by the owner for payment by or
on behalf of the hirer under this Act in connection with the registration
and use of a motor vehicle, including any amount payable for
third-party insurance.
(2) Where an owner has agreed that any part of the hire-purchase
price may be discharged otherwise than by the payment of money,
any such discharge shall, for the purposes of this Act, be deemed
to be a payment of that part of the hire-purchase price.
Appointment of officers
3. (1) The Minister may appoint a Controller of Hire-Purchase
and such number of Deputy Controllers of Hire-Purchase, Assistant
Controllers of Hire-Purchase and other officers as may be necessary
for the purposes of this Act.
(2) The Controller shall, subject to the general direction and
control of the Minister, perform the duties and exercise the rights
and powers imposed and conferred upon him by this Act and any
regulations made thereunder.
(3) The Deputy Controller, Assistant Controllers and other officers
appointed under subsection (1) shall be under the control and
direction of the Controller.
(4) A Deputy Controller may exercise all the powers conferred
and duties imposed upon the Controller under this Act except any
powers or duties expressed to be exercisable by the Controller
personally.
(5) The Controller or Deputy Controller may perform such duties
and exercise such powers and functions conferred upon an Assistant
Controller by this Act or any regulations made thereunder.
(6) All officers appointed under this section shall be deemed to
be public servants within the meaning of the Penal Code [Act 574].
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PART II
FORMATION AND CONTENTS OF HIRE-PURCHASE
AGREEMENTS
Requirements relating to hire-purchase agreements
4. (1) Before any hire-purchase agreement is entered into in respect
of any goods--
(a) in a case where negotiations leading to the making of the
hire-purchase agreement is carried out by any person
who would be the owner under the hire-purchase agreement
to be entered into, or by any person, other than the dealer,
acting on his behalf, such person shall serve on the intending
hirer a written statement duly completed and signed by
him in accordance with the form set out in Part I of the
Second Schedule;
(b) in a case where negotiations leading to the making of the
hire-purchase agreement is carried out by a dealer, such
dealer shall--
(i) serve on the intending hirer a written statement
duly completed and signed by him in accordance
with the form set out in Part I of the Second Schedule;
and
(ii) at any time after the service of the written statement
referred to in subparagraph (i) but before the hire-
purchase agreement is entered into, serve on the
intending hirer a written statement duly completed
and signed both by him and the prospective owner
in accordance with the form set out in Part II of the
Second Schedule.
(2) The written statements referred to in subsection (1) shall be
served by delivering it in person to the intending hirer or his agent
who shall acknowledge receipt of the same by signing under his
hand at the appropriate column contained therein.
(3) Any person who has been served with the written statement
or statements referred to in subsection (1) shall not be under any
obligation to enter into any hire-purchase agreement and no payment
or other consideration shall be required from him in respect of the
preparation or service of such statement or statements, as the case
may be.
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(4) A hire-purchase agreement entered into in contravention of
subsection (1) shall be void.
(5) An owner who enters into a hire-purchase agreement and a
dealer who carries out negotiations leading to the making of a hire-
purchase agreement that does not comply with subsection (1),
irrespective of whether such hire-purchase agreement is void or
otherwise, shall be guilty of an offence under this Act.
(6) Where a person upon whom a written statement or statements
referred to in subsection (1) have been served is subject to any
obligation to enter into any hire-purchase agreement to which such
written statement or statements relate or is required to make any
payment or other consideration in respect of the preparation or
service of such statement or statements, as the case may be, any
person who imposed such obligation or requirement shall be guilty
of an offence under this Act.
(7) The Minister may, by order, amend, vary, delete from, or
add to, Part I and Part II of the Second Schedule.
Hire-purchase agreement to be in writing
4A. (1) A hire-purchase agreement in respect of any goods specified
in the First Schedule shall be in writing.
(2) A hire-purchase agreement that does not comply with
subsection (1) shall be void.
(3) An owner who enters into a hire-purchase agreement that
does not comply with subsection (1) shall, notwithstanding that
the hire-purchase agreement is void, be guilty of an offence under
this Act.
Hire-purchase agreement to be signed, etc.
4B. (1) Every hire-purchase agreement shall be signed by or on
behalf of all parties to the agreement.
(2) No owner, dealer, agent or person acting on behalf of the
owner shall require or cause any intending hirer or his agent to
sign a hire-purchase agreement or any other form or document
relating to a hire-purchase agreement unless such hire-purchase
agreement, form or document has been duly completed.
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(3) A hire-purchase agreement that does not comply with
subsections (1) and (2) shall be void.
(4) An owner, dealer, agent or person acting on behalf of the
owner who--
(a) enters into a hire-purchase agreement in contravention of
subsection (1); or
(b) requires or causes an intending hirer or his agent to sign
a hire-purchase agreement in contravention of
subsection (2),
shall, notwithstanding that the hire-purchase agreement is void, be
guilty of an offence under this Act.
Contents of hire-purchase agreement
4C. (1) Every hire-purchase agreement--
(a) shall--
(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;
(b) where any part of the consideration is or is to be provided
otherwise than in cash, shall contain a description of that
part of the consideration;
(c) shall set out in a tabular form--
(i) the price at which at the time of signing the agreement
the hirer might have purchased the goods for cash
(in this Act referred to and in the agreement to be
described as "cash price");
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(ii) the amount paid or provided by way of deposit (in
this Act referred to and in the agreement to be
described as "deposit") showing separately the
amount paid in cash and the amount provided by
any consideration other than cash;
(iii) any amount included in the total amount payable
to cover the expenses of delivering the goods or
any of them or to the order of the hirer (in this Act
referred to and in the agreement to be described as
"freight");
(iv) any amount included in the total amount payable
to cover vehicle registration fees in respect of the
goods (in the agreement to be described as "vehicle
registration fees");
(v) any amount included in the total amount, payable
for insurance in respect of the goods or any of
them;
(vi) the total of the amounts referred to in subparagraphs
(i), (iii), (iv) and (v) less the deposit;
(vii) the amount of any other charges included in the
total amount payable (in this Act referred to and in
the agreement to be described as "terms charges");
(viii) the annual percentage rate for terms charges which
shall be calculated in accordance with the formula
set out in the Seventh Schedule;
(ix) the total of the amounts referred to in subparagraphs
(vi) and (vii) of this paragraph (in this Act referred
to as "the balance originally payable under the
agreement"); and
(x) the total amount payable;
(d) shall not contain any particulars which differ in any material
way from the particulars contained in the written statement
or statements served on the hirer pursuant to paragraph
4(1)(a) or 4(1)(b), as the case may be.
(1A) Paragraph (1)(d) shall not apply where in the hire-purchase
agreement the terms charges are at a variable rate.
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(1B) Where in a hire-purchase agreement the terms charges are
at a variable rate, the following items shall be specified in the hire-
purchase agreement based on the terms charges calculated in
accordance with the base lending rate applicable at the time the
hire-purchase agreement is entered into:
(a) the number of instalments to be paid under the agreement
by the hirer;
(b) the amount of each of these instalments;
(c) the annual percentage rate of terms charges which shall
be calculated in accordance with the formula set out in
the Seventh Schedule; and
(d) the balance originally payable under the agreement.
(2) A hire-purchase agreement that contravenes subsection (1)
shall be void.
(3) An owner who enters into a hire-purchase agreement in
contravention of subsection (1) shall, notwithstanding that the
hire-purchase agreement is void, be guilty of an offence under this
Act.
Separate agreement for every item of goods
4D. (1) There shall be a separate hire-purchase agreement in respect
of every item of goods purchased under this Act.
(2) A hire-purchase agreement that does not comply with
subsection (1) shall be void.
(3) An owner who enters into a hire-purchase agreement that
does not comply with subsection (1) shall, notwithstanding that
the hire-purchase agreement is void, be guilty of an offence under
this Act.
(4) For the purposes of this section, any goods which are essentially
similar or complementary to each other and sold as a set shall be
regarded as an item.
Copy of documents to be served on hirer
5. (1) Within fourteen days after the making of a hire-purchase
agreement, the owner shall serve or cause to be served on the hirer
and the guarantors a copy of the agreement each.
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(1A) Failure to comply with subsection (1) would render the
hire-purchase agreement unenforceable by the owner.
(2) At any time before the final payment has been made under
a hire-purchase agreement the owner shall, within fourteen days
after he has received a request in writing from the hirer, supply
to the hirer a copy of any memorandum or note of the agreement--
(a) on payment by the hirer of the prescribed fee; or
(b) where no fee is prescribed, one free copy, and thereafter
a fee as may be prescribed shall be charged for the supply
of a second or subsequent copy thereof.
(3) Where any part of the total amount payable consists of an
amount paid or to be paid under a policy of insurance in respect
of the goods, the owner shall serve or cause to be served on the
hirer forthwith a copy of the insurance payment receipt and, within
seven days of receipt of the policy, a copy of the policy or statement
in writing setting out the terms, conditions and exclusions of the
policy that affect the rights of the hirer.
6.
(Deleted by Act A813).
PART IIA
OPTION TO HIRER
Option to hirer
6A. (1) An owner shall provide an option to the hirer for the terms
charges under a hire-purchase agreement to be at a fixed rate or
at a variable rate.
(2) A variable rate of terms charges shall be quoted at a margin
percentage above the base lending rate.
Right of owner to revise the base lending rate
6B. (1) Where in the hire-purchase agreement the terms charges
are at a variable rate, the owner may revise the base lending rate
at any time during the continuance of the agreement.
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(2) Where the owner has revised the base lending rate, the rate
and total amount of terms charges and the amount of each instalment
or the number of instalments under the hire-purchase agreement
shall be revised accordingly.
(3) Where the owner has revised the base lending rate, he shall
serve a notice to hirer specifying the following:
(a) the revised base lending rate;
(b) the revised rate of terms charges;
(c) the revised total amount of terms charges; and
(d) the revised amount of instalments or the revised number
of instalments, as the case may be.
Right of hirer where the base lending rate is revised
6C. Where the owner has revised the base lending rate, the hirer
may opt whether--
(a) to retain the existing number of instalments and vary the
amount of instalments; or
(b) to retain the existing amount of instalments and vary the
number of instalments.
PART III
PROTECTION OF HIRERS AND GUARANTORS
Warranties and Conditions
Conditions and warranties to be implied in every hire-purchase
agreement
7. (1) In every hire-purchase agreement there shall be--
(a) an implied warranty that the hirer shall have and enjoy
quiet possession of the goods;
(b) an implied condition on the part of the owner that he
shall have a right to sell the goods at the time when the
property is to pass;
(c) an implied warranty that the goods shall be free from any
charge or encumbrance in favour of any third party at the
time when the property is to pass.
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(2) In every hire-purchase agreement there shall be an implied
condition that the goods shall be of merchantable quality, but such
a condition shall not be implied--
(a) where the hirer has examined the goods or a sample
thereof, as regards defects which the examination ought
to have revealed; or
(b) if the goods are second-hand goods and the agreement
contains a statement to the effect that--
(i) the goods are second-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.
(3) Where the hirer expressly or by implication makes known
to the owner or the dealer or to any servant or agent of the owner
or the dealer the particular purpose for which the goods are required,
there shall be implied in the hire-purchase agreement a condition
that the goods shall be reasonably fit for that purpose, but such
a condition shall not be implied if the goods are second hand goods
and the agreement contains a statement to the effect--
(a) that the goods are second-hand; and
(b) that all conditions and warranties of fitness and suitability
are expressly negatived, and the owner proves that the
hirer has acknowledged in writing that the statement was
brought to his notice.
(4) Nothing in this section shall prejudice the operation of any
other written law or rule of law whereby any condition or warranty
is to be implied in any hire-purchase agreement.
Liability of the owner and person acting on his behalf for
misrepresentation
8. (1) Every representation, warranty or statement made to the
hirer or prospective hirer, whether orally or in writing, by the
owner or the dealer or any person acting on behalf of the owner
or the dealer in connection with or in the course of negotiations
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leading to the entering into of a hire-purchase agreement shall
confer on the hirer--
(a) as against the owner--the same right to rescind the
agreement as the hirer would have had if the representation,
warranty or statement had been by an agent of the owner;
and
(b) as against the person who made the representation, warranty
or statement, and any person on whose behalf the person
who made the representation, warranty or statement was
acting in making it--the same right of action in damages
as the hirer would have had against them or either of
them if the hirer had purchased the goods from the person
who made the representation, warranty or statement or
the person on whose behalf the person who made the
representation, warranty or statement was acting (as the
case may be) as a result of the negotiations.
(2) Every covenant, condition or term in any hire-purchase
agreement or other document purporting to exclude, limit or modify
the operation of subsection (1) or to preclude any right of action
or any defence based on or arising out of any such representation,
warranty or statement shall be void.
(3) Without prejudice to any other rights or remedies to which
an owner may be entitled, an owner shall be entitled to be indemnified
by the person who made the representation, warranty or statement,
and by any person on whose behalf the representation, warranty
or statement was made against any damage suffered by the owner
as a result of any such representation, warranty or statement.
PART IV
HIRERS
Statutory rights of hirers
Duty of owners and sellers to supply documents and information
9. (1) At any time before the final payment has been made under
a hire-purchase agreement the owner shall, within fourteen days
after he has received a request in writing from the hirer, supply
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to the hirer a statement signed by the said person or his agent
showing--
(a) the amount paid to the owner by or on behalf of the hirer;
(b) the amount which has become due under the agreement
but remains unpaid;
(c) the amount which is to become payable under the
agreement; and
(d) the amount derived from interest on overdue instalments:
Provided that an owner need not comply with such a request if
he has sent the hirer a statement under this section within a period
of three months immediately preceding the receipt of the request.
(2) In the event of a failure without reasonable cause to comply
with subsection (1) then, while the default continues--
(a) the owner shall not be entitled to enforce--
(i) the agreement against the hirer;
(ii) any right to recover the goods from the hirer;
(iii) any contract of guarantee relating to the agreement;
(b) any security given by the hirer in respect of money payable
under the agreement or given by a guarantor in respect
of money payable under such a contract of guarantee as
aforesaid shall not be enforceable against the hirer or the
guarantor by any holder thereof.
(3) If the default aforesaid continues for a period of one month,
the owner shall be guilty of an offence and shall, on conviction,
be liable to a fine not exceeding one thousand ringgit.
Appropriation of payments made in hire-purchase agreements
10. A hirer who is liable to make payments in respect of two or
m o r e hire-purchase agreements to the same owner shall,
notwithstanding any agreement to the contrary, be entitled, on
making any payment in respect of the agreements which is not
sufficient to discharge the total amount then due under all the
agreements, to require the owner to appropriate the sum so paid
by him in or towards the satisfaction of the sum due under any
one of the agreements, or in or towards the satisfaction of the sums
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due under any two or more of the agreements in such proportions
as he thinks fit, and, if he fails to make any such appropriation
as aforesaid, the payment shall by virtue of this section be appropriated
towards the satisfaction of the sums due under the respective hire-
purchase agreements in the order in which the agreements were
entered into.
Power of court to allow goods to be removed
11. Where, by virtue of a hire-purchase agreement, it is the duty
of a hirer to keep the goods comprised in the agreement in his
possession or control at a particular place or not to remove the
goods from a particular place, a court of a Magistrate may, on the
application of the hirer, make an order approving the removal of
the goods to some other place, which place shall, for the purposes
of the agreement, be substituted for the place mentioned in the
agreement.
Assignments of rights under hire-purchase agreement
12. (1) The right, title and interest of a hirer under a hire-purchase
agreement may be assigned with the consent of the owner, or if
his consent is unreasonably withheld, without his consent.
(2) Except as otherwise provided in this section, no payment or
other consideration shall be required by an owner for his consent
to such an assignment as is mentioned in subsection (1) and where
an owner requires any such payment or other consideration for his
consent, that consent shall be deemed to be unreasonably withheld.
(3) Where, at the request of a hirer under a hire-purchase
agreement, the owner fails or refuses to give his consent to an
assignment by the hirer or his right, title and interest under the
agreement, the hirer may apply to the High Court for an order
declaring that the consent of the owner to that assignment has
unreasonably been withheld, and where such an order is made that
consent shall be deemed to be unreasonably withheld.
(4) As a condition of granting consent to an assignment of the
right, title and interest of the hirer under a hire-purchase agreement,
the owner may stipulate that all defaults under the agreement shall
be made good and may require the hirer and assignee--
(a) to execute and deliver to the owner an assignment in a
form approved by the owner whereby without prejudicing
or affecting the continuing personal liability of the hirer
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in those respects the assignee agrees with the owner to
be personally liable to pay the instalments remaining
unpaid and to perform and observe all other stipulations
and conditions of the hire-purchase agreement during the
residue of the term thereof and whereby the assignee
indemnifies the hirer in respect of those liabilities; and
(b) to pay the reasonable costs (if any) incurred by the owner
in stamping or registering the assignment agreement or
counterparts.
(5) The refusal on the part of the owner to give consent to an
assignment as is mentioned in subsection (1) on the ground that
he requires other or additional guarantors to guarantee the assignee's
obligation shall be deemed unreasonable--
(a) where the same guarantors who have guaranteed the hirer's
obligation under the hire-purchase agreement have agreed
to guarantee the assignee's obligation under that agreement;
or
(b) where the assignee has furnished the same number of
guarantors as was furnished by the hirer to guarantee his
obligation under the hire-purchase agreement as guarantors
for his obligation under the agreement.
Operation of law
13. The right, title and interest of a hirer under a hire-purchase
agreement shall be capable of passing by operation of law to the
personal representative of the hirer and if the hirer is a company
the liquidator may exercise the same right under the agreement as
the company but nothing in this section shall relieve any personal
representative or liquidator from compliance with the provisions
of the agreement.
Early completion of agreement
14. (1) 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 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 due under the agreement.
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(2) For the purposes of subsection (1)--
(a) where in the hire-purchase agreement the terms charges
are at a fixed rate, the net balance due is the balance
originally payable under the agreement less--
(i) any amounts (other than the deposit) paid or provided
by or on behalf of the hirer under the agreement;
(ii) the statutory rebate for terms charges; and
(iii) if the hirer requires any contract of insurance to be
cancelled, the statutory rebate for insurance; or
(b) where in the hire-purchase agreement the terms charges
are at a variable rate, the net balance due is the outstanding
amount financed and terms charges accrued and calculated
up to the next due date of payment less, if the hirer
requires any contract of insurance to be cancelled, the
statutory rebate for insurance.
(c) if the hirer requires any contract of insurance to be cancelled,
the statutory rebate for insurance.
(3) The rights conferred on the hirer by this section may be
exercised by him--
(a) at any time during the continuance of the agreement; or
(b) where the owner has taken possession of the goods, upon
payment to the owner (within twenty-one days after the
owner has served a notice in the form set out in the Fifth
Schedule) in addition to the net balance due together
with the reasonable costs including costs (if any) of storage,
repair or maintenance of the goods incurred by the owner
incidental to his taking possession of the goods; or
(c) where the hirer has returned the goods to the owner
within twenty-one days after the service on him of the
notice in the form set out in the Fourth Schedule, upon
payment to the owner (within twenty-one days after the
owner has served a notice in the form set out in the Fifth
Schedule) the net balance due under the Act.
Power of hirer to determine hiring
15. (1) The hirer of any goods comprised in a hire-purchase
agreement may terminate 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.
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(2) Where the nature of the goods comprised in a hire-purchase
agreement or the facilities available at the place or places of
business of the owner or the place specified in the agreement is
or are such that it 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.
(3) Where the parties fail to agree, the hirer who proposes to
return goods to the owner under this section may, subject to subsection
(4), apply to a court of a Magistrate for an order fixing the place
to 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 before the
hirer required the owner to nominate a reasonable place
for the return of the goods.
(4) Notice of an application under subsection (3) shall be given
to the owner by the hirer.
(5) 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 it 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.
(6) For the purposes of this section--
(a) "balance outstanding under the hire-purchase agreement
means--
(i) where in the hire-purchase agreement the terms
charges are at a fixed rate, the total sum payable
Hire-Purchase
25
by the hirer to complete the purchase of goods to
which the agreement relates and the amount derived
from interest on overdue instalments which has yet
to be paid less--
(a) the amount paid by or on behalf of the hirer
excluding deposit;
(b) statutory rebate for terms charges; and
(c) statutory rebate for insurance, if any; or
(ii) where in the hire-purchase agreement the terms
charges are at a variable rate, the outstanding amount
financed and terms charges accrued and calculated
up to the next due date of payment less statutory
rebate for insurance, if any;
(b) "value of the goods at the 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 bought
the goods for cash, the amount paid by that person.
Repossession
Notices to be given to hirer when goods repossessed
16. (1) Subject to this section, an owner shall not exercise any
power of taking possession of goods comprised in a hire-purchase
agreement arising out of any breach of the agreement relating to
the payment of instalments unless there had been two successive
defaults of payments or a default in respect of the last payment
and he has served on the hirer a notice, in writing, in the form set
out in the Fourth Schedule and the period fixed by the notice has
expired, which shall not be less than twenty-one days after the
service of the notice.
(1A) Where a hirer is deceased, an owner shall not exercise any
power of taking possession of goods comprised in a hire-purchase
agreement arising out of any breach of the agreement relating to
the payment of instalments unless there has been four successive
defaults of payments.
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(2) An owner need not comply with subsection (1) if there are
reasonable grounds for believing that the goods comprised in the
hire-purchase agreement will be removed or concealed by the hirer
contrary to the provisions of the agreement, but the onus of proving
the existence of those grounds lies upon the owner.
(3) Within twenty-one days after the owner has taken possession
of goods that were comprised in a hire-purchase agreement he
shall serve on the hirer and every guarantor of the hirer a notice,
in writing, in the form set out in the Fifth Schedule.
(4) Where the owner takes possession of goods that were comprised
in a hire-purchase agreement he shall deliver or cause to be delivered
to the hirer personally a document acknowledging receipt of the
goods or, if the hirer is not present at that time, send to the hirer
immediately after taking possession of the goods a document
acknowledging receipt of the goods.
(5) The document acknowledging receipt of the goods, required
under subsection (4) shall set out a short description of the goods
and the date on which, the time at which and the place where the
owner took possession of the goods.
(6) If the notice required by subsection (3) is not served, the
rights of the owner under the hire-purchase agreement thereupon
cease and determine; but if the hirer exercises his rights under this
Act to recover the goods so taken possession of, the agreement has
the same force and effect in relation to the rights and liabilities
of the owner and the hirer as it would have had if the notice had
been duly given.
(7) Before and when exercising the power of taking possession
the owner or his servant or agent shall, in addition to the provisions
of this Act, comply with any regulations relating to the manner of
taking possession as may be prescribed.
Hirer who returns goods not liable to pay cost of repossession,
etc.
16A. A hirer who returns goods comprised in a hire-purchase
agreement within twenty-one days after the service on him of the
notice in the form set out in the Fourth Schedule shall not be liable
to pay--
(a) the cost of repossession;
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27
(b) the cost incidental to taking possession; and
(c) the cost of storage.
Owner to retain possession of goods repossessed for twenty-
one days
17. (1) Where an owner has taken possession of any goods under
section 16 he shall not, without the written consent of the hirer,
sell or dispose of the goods or part with possession thereof until
after the expiration of twenty-one days after the date of the service
on the hirer of the notice referred to in subsection 16(3) or, if
notice under paragraph 18(1)(a) has been given, until the time for
payment or tender pursuant to that notice has expired (whichever
is the later).
(2) An owner who sells or disposes of any goods or parts with
possession of any goods in contravention of subsection (1) shall
be guilty of an offence under this Act.
Hirer's rights and immunities when goods repossessed
18. (1) Where the owner takes possession of any goods under
section 16--
(a) the hirer may within twenty-one days after the service on
him of the notice referred to in subsection 16(3) by giving
to the owner a notice in writing signed by the hirer or
his agent--
(i) require the owner to re-deliver to or to the order
of the hirer (subject to the compliance by the hirer
with the provisions of section 19) the goods that
have been repossessed; or
(ii) 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 not less than the estimated
value of the goods set out in the first mentioned
notice;
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(b) the hirer may recover from the owner--
(i) where in the hire-purchase agreement the terms
charges are at a fixed rate, if the value of the goods
at the time of the owner so taking possession of the
goods--
(A) is less than the net amount payable but the
total of that value and the amount paid or
p r o v i d e d , whether by cash 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
(B) is equal to or greater than the net amount
payable, the total of that value and the amount
paid or provided, whether by cash or other
consideration, by or on behalf of the hirer under
the agreement, less the net amount payable; or
(ii) where in the hire-purchase agreement the terms
charges are at a variable rate and the value of the
goods at the time of the owner so taking possession
of the goods is equal to or greater than the balance
outstanding under the hire-purchase agreement, the
difference between the value of the goods and the
b a l a n c e outstanding under the hire purchase
agreement.
(2) Where the owner takes possession of any goods comprised
in a hire-purchase agreement, the owner is not entitled to recover--
(a) where in the hire-purchase agreement the terms charges
are at a fixed rate, any sum (whether under a judgment
or order or otherwise) exceeding the net amount payable
in respect of the goods obtained by adding--
(i) the value of the goods at the time of the owner so
taking possession of the goods; and
(ii) the amount paid or provided, whether by cash or
other consideration, by or on behalf of the hirer
under the agreement; or
(b) where in the hire-purchase agreement the terms charges
are at a variable rate, any sum (whether under a judgment
o r order or otherwise) which exceeds the balance
outstanding under the hire-purchase agreement.
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29
(3) For the purposes of this section--
(a) the net amount payable is the total amount payable less
the statutory rebates for terms charges and insurance as
at the time of the owner taking possession of the goods;
(aa) the balance outstanding under the hire-purchase agreement
is the outstanding amount financed and terms charges
accrued and calculated up to the time of the owner so
