LAW240-UiTM

1. HIRE PURCHASE (Hire Purchase Act 1967)
S2(1) – letting of goods with an option to purchase &
- an agreement for the purchase of goods by instalments.
Exception;
a) - property in goods passes at the time of the agreement/upon/
at any time before delivery.
b) - person who gave the hire goods is engaged in the bus of
selling it.
T/f purchasing by credit is not h/p but s/o/g because title had
already transferred to purchaser.
GOODS :- 1. All consumer goods
(1st
Schedule) 2. Invalid carriages
3. Motorcycles
4. Motorcars (including taxi cabs & hire cars;
5. Goods vehicle (>2,540 kg)
6.Buses (including stage buses)

3. KESANG LEASING SDN BHD V MOHD YUSOF
Computer can as long as parties consented to be bound.
FORMATION: Procedure must be followed, breach-agreement void.
1) Negotiations by owner; Notice under Part 1of 2nd
schedule
(Summary of Financial Obligation) to the hirer (mandatory).
a) description of the goods
b) 1st
hand /2nd
hand goods
c) address of the goods
d) cash price
e) deposit
f) delivery charges if any
g) Insurance & registration fee (h/p vehicle)
h) term charges
i) difference of price j) no. of instalments
Purpose: pre-contractual information to protect a prospective hirer &
to enable him to make an informed decision as to his likely
financial commitments.

4. 2) Negotiation by dealer; Notice under Part I & II of 2nd
schedule(Consent of Prospective Owner) to the hirer (mandatory).
3) Must be in writing. – cannot handwritten if not clear & legible.
(English/ BM only) - cannot size smaller than ten-point Times.
4) Must be signed by or on behalf of all parties. S4B(2); Hirer must
signed a duly completed form.
5) Contents S4C(1):-
i) date hiring starts
ii) no. of instalments
iii) amounts of each of the instalments, person & place to pay
iv) time for payment
v) description of goods
vi) address of goods
When part of consideration not cash, must give description.
i) cash price
ii) deposit in cash & amount provided by the consideration.
iii)delivery/freight charges.
iv) vehicle registration fees

5. v) insurance
vi) total amount less deposit
vii) term charges TABULAR
viii) annual percentage rate FORM
ix) total amount in vi & vii
x) total amount payable
Agreement cannot inconsistent with mandatory pre-contractual
written statement.
6) Separate agreement for different item unless complementary to
each other.
7) 2nd
hand goods must declare in writing of any defects.
8) Every addition or alteration, hirer must consent by signing/initial
in the margin opposite the change.
9) Service of Documents – S5(1) the owner serve on hirer &
guarantors within 21 days after it is made. Failure –unenforceable
but not void .
-At any time before final payment, upon request, within 21 days
supply hirer a copy of memorandum/note of agreement.

6. - If total amount include insurance, immediately serve payment
receipt. A copy of the policy within 7 days of receipt.
DEPOSIT
S31(1): 1/10 of the cash price whether in cash/goods or partly cash &
partly goods.H/e not applicable in assignment/transfer of the
rights & liabilities under existing h/p.
S32 : Circumstances cannot be treated as deposit
a) cash borrowed directly/indirectly from/through;
i) the owner
ii) an agent/servant of owner
iii) person who had agreement with owner/agent, to advance
money to enable deposits to be paid.
b) deposit is in goods/partly (trade-in), amount inflated. Amount
excess of the true value is discounted.
c) Rent paid by the hirer to owner before h/p with regards to
same

7. PROTECTION OF HIRERS & GUARANTORS
IMPLIED CONDITIONS & WARRANTIES (S7)
*Cannot be excluded/modified except 2nd
hand goods in respect of;
1) merchantable quality 2) fitness for purpose
*S7(4) Hirer’s rights under common law & other laws – preserved.
*General law of contract, legal obligations imposed on the owner:
i) Owner’s responsibility to deliver.
ii) Implied term, delivers goods as good a state as they were at
the time the agreement was made.
iii) Owner must accept payment offered except for reasonable
cause.
1) Warranty As To Quiet Possession
Hirer shall have & enjoy quiet possession of the goods.
2) Condition As To Title
Owner is required to have a right to sell the goods at the time
when the property is to pass & in PUBLIC FINANCE V EHWAN
BIN SARING means at the time when a hirer decides to pay all.

8. 3) Warranty As To Encumbrance
Identical to S14(c ) S/G/A. …free from any charge/encumbrance
in favour of any 3rd
party…
4) Condition As To Merchantable Quality
Exception;
a) where hirer has examined goods/sample. Defects ought to have
revealed.
b) 2nd
hand goods. Agreement contains statement;
i) goods 2nd
hand ii) all conditions & warranties to quality –ve
& hirer acknowledged in writing.
5) Condition As To Fitness For Purpose
Expressly/impliedly make known to the owner. Exception if
agrmt;
i) goods 2nd
hand ii) all conditions & warranties of fitness &
suitability –ve & hirer acknowledged.
LIABILITY OF OWNER & DEALER - MISREPRESENTATION
Right to claim against owner & person making representation. P/o/ctt
does not apply.

9. Statutory Rights Of Hirer
1) Right To Statement Relating To Financial Position (S9)
Upon request at any time before final payment. W/t 14 days:
a) Amount paid to the owner. b) Amount which has become due.
c) Amount which is to become payable.
d) Amount derived from interest on overdue agreement.
*Default, owner cannot enforce 1) agreement 2) right to recover goods
3) Contract of guarantee.
*H/e need not complied if w/t 3 months had sent similar statement.
2) Right To Appropriation Of Payment (>1 Agreement)(S10)
Debtor may appropriate money to a particular debt as he chooses.
No direction, at the discretion of creditor.
3) Right To Apply For Order For Goods To Be Removed (S11)
Right to apply to a Magistrate for an order permitting to move the
goods.
4) Right To Assign Hirer’s Rights (S12)
Right, title & interest may be assigned with consent of owner & this
right cannot be modified/excluded by term in the Agreement.

10. 5) Right By Operation Of Law (S13)
Occurs on the death/bankruptcy of the hirer. Provisions of the
agreement continues.
6) Right To Early Completion Of Agreement (S14)
Give written notice to owner. Pay/tender payment of the “net
balance” due i.e balance originally payable less;
a) any amounts paid (other than deposit);
b) statutory rebate for term charges;
c) if hirer requires insurance to be cancelled, the statutory rebate.
Right may be exercise under following circumstances;
a) at any time.
b) Owner has taken possession.
c) Hirer has returned the goods.
7) Right To Terminate Agreement (S15)
At any time (ordinary business hours) by returning the goods to
the owner. a) may require owner to sell to person introduce.
b) value more than balance outstanding – hirer entitle
to the difference.

11. 8) Right Of Hirer On Repossession (S16)
a) Defaulted in 2 successive payments/ last payments & written
notice given expired (21 days). Deceased – 4 successive default.
b) above provision waived if reasonable grounds goods will be
removed/concealed.
c) Upon taking possession, must provide receipt.
d) After possession, serve on hirer & guarantor written notice in
5th
Schedule w/t 21 days.
e) Can only sell after notice expired. B/f expired must have
written consent from hirer.
After receive notice, hirer may give notice requiring;
a) redelivery.
b) sell the goods person he introduce.
LIMITATION ON TERM CHARGES
Must not exceed formula in 6th
Schedule. If exceed hirer by written
notice can treat as void or have his liability reduced.
OBLIGATIONS OF HIRER
1- Goods must be stored in the place in the Agreement.

12. 2- To pay regular instalments.
3- Since he has not title, t/f may not remove, sell/dispose of.
INSURANCE
* Mandatory for owner to take it in the name of the hirer.
* Motor vehicles, limited to 1st
year. Thereafter the duty of hirer.
* Amount payable except subsequent payment form h/p price.
* Renewal – must inform owner.
* Hirer fail to renew, owner may insure & cost on hirer.
GUARANTORS
Exclude dealers/persons engaged in the selling of goods of the same
nature/description.
Liability co-extensive with the hirer.
Discharge, variation without his consent.
1) Rights Of Guarantor Against Owner
Discharge by paying owner amount due & entitle;
i) sue the hirer in the name of the owner
ii) insist owner transfer all securities.
iii)set-off/counter claim.