HIRE PURCHASE

only applies to goods stated in 1st schedule

consumer goods not exceeding $20,000 include GST

motor vehicle not exceeding $50,000 include GST/ import and exercise duty payable excludes COE

consumer goods

for personal/family/household

vehicle

under RTA

covers 2nd goods as well

if comes under 1st schedule HPA

SEC 2 HPA

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

HP agreements does not include

whereby the property in goods comprised there in passes at the time of agreement or upon or at any time before goods delivery

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

if goods not in 1st schedule

common law principles will apply

purpose

protect consumers who are normally in a weaker bargaining positon

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

SEC 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 time not obliged to pay all installments

contract for bailment of goods

hirer may not dispose of goods

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

not govern by SGA until option is 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 law

Lee v Butler

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

not hire purchase agreement

money lending/ bill of sale

HP not lending money transaction

not loan backed by 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

hirer's remedies

depending on the nature of breach

renunciation

breach leading to total failure of consideration

failure of performance

delivery

quiet posession

freedom from encumbrance

tittle

desciption

merchantable quality

fitness for purpose

before making the hire purchase agreement

give written statement to hirer

SEC 3(1) HPA

statement sets out

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

summary of hirer's financial obligation

SEC 3(2) HPA

written offer from hirer

acceptance by owner concludes the making of HPA

during making the hire purchase agreement

SEC 3(3)(a) & (b) HPA agreement must be

in writing

in english

signed by the hirer

signed by all parties including guarantor

SEC 5(1) HPA

if not writing, not enforceable

Ming Lian Corporation Sdn Bhd v Haji Nordin

HELD: in absence of fraud an agreement signed in blank was valid as long as the hirer knew that he was a binding contract of HP

SEC 3(3)(c) HPA

number of instalment

amount of each instalment

place of the payment will be made

time of the payment which will be made

description of goods sufficient to identify them

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

SEC 3(3)(e) HPA

in tabular form

cash price

deposit

freight

vehicle registration fees

insurance

total amount payable

term charges

for consumer's benefit

remind consumer about agreed

prevent ower from taking advantage

SEC 5(2) HPA

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

owner no right to recover the goods from the hirer

security given by the hirer is not enforceable by owner

HP agreement not enforceable by owner

after making the hire purchase agreement

SEC 4(1) HPA

7 business days give

copy of agreement

3rd schedule notice

SEC 4(2) HPA

7 days of receipt of insurance policy

copy of the insurance

written notice of its content

SEC 5(3) HPA

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

acceotance of delivery

payment to owner

care of goods and repairs

insurance

redelivery at termination of hiring

supply of information by hirer