Hire Purchase

only applies to goods stated in 1st schedule

consumer goods not exceeding $20,000including GST

motor vehicle not exceeding $50,000including GST/ import and excise duty payableexcludes COE

consumer goods

for personal/ family/ household purpose

motor vehicle

under RTA

covers 2nd goods as well

if comes under 1st schedule HPA

section 2 HPA

HP agreement = letting of goods with an option to purchase and an agreement for the purchase of goods by installments

HP agreement does not include

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

person hiring - engaged in the trade/ business of selling goods of the same nature/ description as the goods comprised in the agreement

if goods not in 1st schedule

common law principles will apply

Purpose

protect consumers who are normally in a weaker bargaining position

protects seller from the situation where buyer sells goods to bona fide 3rd party for value

section 25(1) SGA doesnt apply

liable in action for conversion by the owner

HP agreement comes with option to purchase

consumer can elect to buy goods when installment specified in agreement is paid

return goods at any timenot obliged to pay all installments

contract for bailment of goods

hirer may not dispose of goods

owner may terminate agreement if goods pass into possession of 3rd party

not govern by SGA until option exercised

contract of sale/ agreement to buy

hirer not bound to buy goods

Helby v Mattews

held: an agreement to buy if he does not change his mind is not an agreement to buy in the eyes of the law

Lee v Butler

section 25(2) SGA applied to agreement to buy that are to be paid in installments

because not hire purchase agreement

money lending/ bill of sale

HP not money lending transaction

not loan backed by a security bill of sale

hiring and leasing

leasing

never sell the goods

despite amount willing to pay

chattel must be returned to the owner upon termination of the bailment contract

before agreement

give written statement to hirer

section 3(1) HPAin the form set out in 2nd schedule

statement sets out

summary of hirer's financial obligation

cash price of goods, other charges, interest payable by the hirer, including the effective interest rate

section 3(2) HPA

written offer from hirer

acceptance by owner concludes the making of a HP agreement

during the making ofHP agreement

section 3(3)(a) & (b) HPAagreement must be

in writing

in english

signed by hirer/ representative

signed by all parties concerned including guarantor

section 5(1) HPA

if not in writing, not enforcable

Ming Lian Corporation Sdn Bhd v Haji Noordin

held: in absence of fraud/ misrepagreement signed in blank was valid as long asthe hirer knew that he was signing a binding contract of HP

section 3(3)(c) HPA

date of commencement

number of instalments

amount of each instalment

place at which payment is to be made

time at which payment is made

description of the goods sufficient to identify them

where any part of the consideration is provided other than n cash, a description of that part of the consideration

section 3(3) (e) HPA

in tabular form

cash price

deposit

freight

vehicle registration fees

insurance

term charges

total amount payable

for consumer's benefit

to remind consumer amount agreed

prevent ower from taking advantage

section 5(2) HPA

if breach section 3(3) (b)(c) & (d)

owner no right to recover the goods from hirer

security given by the hirer is not enforceable by the owner

HP agreement is not enforcable by owner

after making the HP agreement

section 4(1) HPA

with 7 BUSINESS DAYs give

copy of the agreement

3rd schedule notice

section 4(2) HPA

within 7 DAYS of receipt of insurance policy

copy of the insurance

written notice of its content

section 5(3) HPA

may dispense compliance of section 3 & 4 if just and equitable to do so.

hirer's remedies

depending on nature of breach

renunciation

breach leading to total failure of consideration

failure of performance

Delivery

Quiet Possession

Freedom from encumbrance

title

description

merchantable quality

fitness for purpose

acceptance of delivery

payment to owner

care of goods and repairs

insurance

redelivery at termination of hiring

supply of information by hirer