Commercial Law Hire Purchase Law

Hire Purchase Act 1967 Previously all HP matters are governed by the Contracts Act 1950 After the HPA was passed, it regulates all HP matters by providing form and contents of HP Agreements to define legal rights, duties and liabilities of the parties involved (Hirers and Owners) The idea is to protect consumers

Hire Purchase Agreement In the HPA, the hirer cannot sell the goods as he is not the owner HPA is more than a simple contract of hire, as it gives the hirer an option to purchase the goods (United Engineering Malaysia v Lai Ping Yoon) Definition of HP - S.2(1) – letting of goods with an option to purchase, an agreement to purchase goods by installment

Goods covered Based on the list in the HP Act – The First Schedule Minister may vary the list from time to time Contents of the First Schedule – all consumer goods and motor vehicles. Consumer goods – S.2(1) goods purchased for personal, family and household purposes. Goods bought for business purposes is not under this Act – with the exception of motor vehicles

Right of Repossession Owner has the ROR ROR is safeguarded with restrictions. Must wait of EOD first What is EOD?

Procedure of Repossession Notice S.16 O must serve to H a notice writing his intention to retake possession Period fixed by notice must have expired and this must not be less than 21 days O must deliver to H a document acknowledging receipt of goods. If H not present, O must sent it immediately after taking possession. AR Document must contain description of the goods, date, time, and place of repossession. O must serve on H and G a notice in writing as set under the 5th schedule within 21 days after repossession. O cannot sell or dispose the goods without written consent of H until 21 days after the date of the said notice. (s.17)

H rights S.18 Within 21 days after service of s.16 notice, H can give O a notice in writing: requiring O to redeliver the goods OR require O to sell the goods to any person introduced by H who is prepared to buy for cash at a price not less than the estimated value of the goods OR H can recover from O if value of goods is less than the net amount payable

H can regain possession H pays to O any amount due Remedies any breach Pay the repossession cost to O