Law Relating to Hire Purchase.ppt - LAW RELATING TO HIRE PURCHASE BUSINESS LAW 416 1 TABLE OF CONTENTS Law Applicable to Hire Purchase B)Formation and

Law Relating to Hire Purchase.ppt - LAW RELATING TO HIRE...

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1 LAW RELATING TO HIRE PURCHASE BUSINESS LAW 416
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2 TABLE OF CONTENTS Law Applicable to Hire Purchase B)Formation and Formalities of Hire- Purchase agreement. C)Warranties and Conditions D)Liabilities of owner and dealer for misrepresentation E)Statutory rights of hirers F)Repossession by owners
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3 Introduction Hire Purchase is a system of acquiring goods on credit whereby the seller of the goods is regarded as the dealer; the purchaser is regarded as the hirer and the finance company as the owner. Hire purchase agreement is governed by Hire Purchase Act 1967. It only applies to goods specified in the First Schedule of the said Act.
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4 DEFINITION
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5 DEFINITION a) What is the meaning of hire purchase agreement ? Section 2 (1) of the Hire Purchase Act 1967 defined hire purchase agreement as follows:- “hire purchase agreement” includes a letting of goods with an option to purchase and agreement for the purchase of goods by installments (whether the agreement describes the installment as rent or hire or otherwise), but does not include any agreement:
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6 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 of purchased is a person who is engaged in the trade or business of selling goods of the same nature or descriptions as the goods comprised in the agreement.
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7 Two situations that is not under definition of hire purchase : Any transactions where the property in goods passes at the time of the agreement or upon or before delivery of the goods. (Credit sale-Sale of Goods Act) Any transactions where a dealer in the same goods contracts to buy similar goods from another person.
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8 From this definition, we can see the effect of a hire purchase agreement: The hirer will have the possession of the goods but the title of the goods will remain with the owner. This will be the situation until:- A) the hirer has purchased the goods after letting it; or B) the hirer has fully paid the installment due.
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9 Credit Corporation (M) Bhd v The Malaysian Industrial Corp & Anor (1976) 1MLJ 83 In this case the court held that no property in the car will be passed to the hirer until the hirer had exercised his option to purchase by paying the total amount and fulfilling all his obligations under a hire purchase agreement.
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10 Tractors Malaysia Bhd v Kumpulan Pembinaan Malaysia Sdn Bhd (1979) 1 MLJ 129 Fact: Respondent bought a tractor from the appellant and defaulted in monthly installment payment. Some time later, the Appellant repossessed the tractor from the respondent. The Respondent sued the Appellant for damages on the ground that the tractor was repossessed illegally.
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