FACULTY OF BUSINESS MANAGEMENT

DIPLOMA IN BANKING ( BA119 )

BUSINESS LAW ( LAW 299 )

FINAL ASSESSMENT

PREPARED BY : SITI KHADIJAH BINTI MISFAN

MATRIC NO. : 2018671088

GROUP : MBA1194C

PREPARED FOR : DR. NASIHAH BINTI NAIMAT

SUBMISSION DATE : 12TH JULY 202

 PART A

1. Which of the following is an invitation to treat?

A. A “Buy 2 Free 1” promotion in a clothing store
B. An advertisement for reward on information relating to a kidnapping
incident
C. A brochure for a spa service
D. A notice saying, “Mystery gift with every purchase over RM500”

2. Arif who is 65 years old, promised to pay for his sister’s wedding at a hotel
in Bali. He has now changed his mind. Is Arif under any legal obligation to
fulfil his promise to his sister?
A. Yes, Arif’s consent was freely given by him
B. Yes, there is a fiduciary relation between Arif and his sister
C. No, there was no intention to create legal relations between the parties
D. No, Arif has no capacity to make a contract as he is too old to do so

3. When parties to an agreement use post for communication, the Postal Rule
applies. Under this rule,
A. an agreement is binding on the offeror when the offeror has posted the
offer
B. an agreement is binding on the offeree when the offeree has received
the offer
C. an agreement is binding on the offeror when the offeree has posted the
acceptance
D. an agreement is binding on the offeree when the offeree has posted
the acceptance

4. The case of Kepong Prospecting Ltd v A.E. Schmidt & Marjorie Schmidt
[1968] 1 MLJ 170 laid down the principle that
A. A consideration is executed when a promise is made in exchange for
the performance of an act
B. A consideration given in the past is valid consideration
C. A contract without consideration is voidable
D. A promise made by one party in return for a promise made by another
party is known as an executory consideration

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5. Which of the following is NOT TRUE about legal capacity to contract?
A. A minor is a person who has not reached the age of majority
B. A minor who has sold his property to another person may apply to the
court for recovery of the property
C. A contract made by an unsound person is voidable
D. A person who is an adult and is of sound mind can be disqualified from
entering into a contract

6. A minor may enter into a contract in certain situations. Which of the

following are those exceptions?
i. An 11-year-old child purchased an insurance policy with his
parent’s permission
ii. A 14-year-old boy who wished to become a musician entered into a
contract with a music tutor to learn how to play a piano
iii. A 16-year old girl ordered an expensive evening gown to wear at
her birthday party
iv. A 17-year-old student received a scholarship to study medicine
abroad

A. i, ii and iii
B. i, ii and iv
C. i, iii and iv
D. ii, iii and iv

7. Kennedy sold his factory to Sufri for RM5 million. Kennedy stated that his
factory could produce 10,000 loafs of bread per day. Later Sufri discovered
that the factory can only produce 9,000 loafs of bread per day. What is the
legal position of the contract between Kennedy and Sufri?
A. The contract is voidable under undue influence
B. The contract is void under fraud
C. The contract is void under mistake
D. The contract is voidable under misrepresentation

8. Which of the following best describe a contract made under undue

influence?
A. An old woman sells her bungalow worth RM1.2 million to her nephew
for RM1 million
B. An illiterate man transfers a house to his 15-year-old daughter
C. A 19-year-old student borrows RM30,000 from a bank to pay for her
university fees
D. A terminally ill person sells his brand-new car to his nurse for RM5,000

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9. Bella made a contract to sell her land to Ramona for RM160,000. After the
contract was concluded, they agreed to modify the price of the land and
entered into a new agreement for the sale of the land at the price of
RM150,000. The first contract between Bella and Ramona has been
discharged by
A. rescission
B. frustration
C. agreement
D. breach of contract

10. Anak Seni is a dance group that has contracted to perform at Adiwara
Club for 3 months. They promised that they will not perform at other
venues during that period, but they broke the promise when they
accepted an invitation to perform at Rafflesia Lounge for 1 week. What is
the best remedy for Adiwara Club?
i. Terminate the contract with Anak Seni
ii. Claim for specific performance
iii. Apply for an injunction
iv. Sue for damages

A. i, ii and iii
B. i, iii and iv
C. ii, iii and iv
D. i, ii, iii and iv

11. Sofi tells Lim that she is Ashraf’s agent and Ashraf does not deny this. In
this situation, if Lim makes a contract with Sofi, would Ashraf be liable to Lim
under the law of agency?
A. Yes, because he has expressly appointed Sofi as his agent
B. Yes, because he has held out Sofi as his agent
C. No, because Sofi was the one who claimed to be an agent
D. No, because he never authorised Sofi to contract with Lim on his behalf

12. Mastura works as a cook in Restoran Makan Sedap. Mastura frequently

orders vegetables and meat for the restaurant from Kedai Runcit Alang.
Restoran Makan Sedap has always paid for the goods delivered by Kedai
Runcit Alang. This describes the creation of agency by
A. express appointment
B. implied appointment

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 C. ratification
D. necessity
13. Siva has been appointed as an agent by Ah Chong. He has the authority
to sell goods on credit to third parties. He sold goods amounting to RM20,000
to Rahimi on credit without making proper enquiries on Rahimi’s ability to pay.
Unknown to Siva, Rahimi had been declared bankrupt at the time he supplied
the goods to Rahimi.

Which of his duties as an agent has Siva breached?

A. Duty to obey the principal’s instructions
B. Duty to exercise care and diligence
C. Duty to communicate with the principal
D. Duty to render proper account to the principal

14. Ronald instructed his agent Edward to purchase a second hand van for
not less than RM40,000. Edward made a contract to purchase Ah Chong’s
van for RM32,000. Edward and Ah Chong agreed to make the price of the van
appear as RM40,000 in their agreement. They then divided the additional
RM8,000 equally between them. Ronald has found out about the deal
between Edward and Ah Chong. He wants to know what he can do about it.
i. Ronald may recover the additional money received by Edward
ii. Ronald may terminate the services of Edward
iii. Ronald may refuse to pay Edward’s remuneration
iv. Ronald may seize Edward’s property as compensation for his
losses

A. i, ii and iii
B. i, ii and iv
C. i, iii and iv
D. ii, iii and iv

15. Which of the following situations will result in an automatic termination of

an agency?
A. Rafi who is 17 years old was appointed by Halim to sell his watch
B. Jason who is the principal of Darrell has been declared bankrupt
C. Ying appointed Joe to manage a book store for him but Joe had to be
hospitalised for two months after he was diagnosed with Covid 19
D. Kavita purchased an apartment for Datin Suhana and received a secret
commission of RM5,000 from the seller

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16. Which of the following statement is NOT TRUE about a hire purchase
agreement?
A. A hirer does not obtain legal ownership of the goods until the final
payment is made.
B. It is a breach of the hire purchase agreement if a hirer sells the goods
before completing the payment
C. The owner may keep the goods in his possession until the hirer
completes the payment of the hire purchase
D. A hirer is legally bound to observe all the terms in the hire purchase
agreement

17. Amara entered into a hire purchase agreement for a sewing machine, a
vacuum cleaner, and a rice cooker from Senang Finance. The monthly
instalment for each item is RM100. This month, Amara is only able to pay
RM100 to Senang Finance and she wishes to pay for the sewing machine.

Which of the following describes the legal position in Amara’s situation?

A. Amara has the right to choose which item she wishes to pay
B. Amara must obtain the consent of the owner on which item she has to
pay
C. The owner has the right to choose which item Amara should pay
D. Amara must apply to the court for permission to choose which item she
wishes to pay

18. Salman entered into a hire purchase agreement for a car with the
following description “Proton X70, automatic, white colour, leather seat cover”.
When the car was delivered, Salman found that the colour of the car was red
and only the front seats had leather cover.

What action may Salman take against the owner in this situation?
A. Salman may repudiate the agreement
B. Salman may sue for damages
C. Salman may repudiate the agreement and sue for damages
D. Salman cannot take any action against the owner

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19. Which of the following are the rights given to a hirer after the repossession
of goods by the owner?

i. The hirer may refuse to settle the default payment

ii. The hirer may pay the amount in default together with the costs of
repossession
iii. The hirer can regain possession of the goods after remedying the
default
iv. The hirer may request the owner to sell the goods to a person
introduced by the hirer for cash at a price of not less than the
estimated value of the goods

A. i, ii and iii
B. i, iii and iv
C. ii, iii and iv
D. i, ii, iii and iv

20. Awang entered into a hire purchase agreement with Syarikat Senang Beli
for a car. The price of the car in the hire purchase agreement is
RM88,674.00. Awang has failed to pay the last two successive
instalments. Syarikat Senang Beli wishes to repossess the car. However,
Awang has already paid more than RM70,000 to Syarikat Senang Beli.

Can Syarikat Senang Beli repossess the car?

A. Yes, because Awang has defaulted in two successive payments

B. Yes, because it is the right of an owner to repossess goods after a hirer
has defaulted in payment
C. No, because Awang has not defaulted in four successive payments
D. No, because the Hire Purchase Act 1967 does not allow direct
repossession of goods by the owner in this situation

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 PART B

QUESTION 1

(a) Leslie went to Pick N Go Supermarket to buy some groceries. He

saw a poster in the supermarket that read “Buy 3 packs of
Oceania tissue paper and get 1 pack free”. Leslie took 4 packs of
Oceania tissue paper and went to the payment counter. The
cashier informed him that the promotion had already ended and
that he would have to pay for all 4 packets of the Oceania tissue
paper. Leslie then decided to not buy the tissue papers, but the
cashier insisted that he has to pay for all the 4 packs of the
Oceania tissue paper.

Advise Leslie. (12 marks)

Answer :

The issue arise in this problem is whether Leslie need to pay for all the 4 packs of
the Ocenia tissues paper to Pick N Go Supermarket.

Firstly, it is important to determine whether there is a contract between Leslie

and Pick N Go Supermarket. Every business transaction will some form agreement or
contract. The word ‘contract’ is synonymous to agreement. The relevant statute on
contract in Malaysia is the Contract Act 1950. Section 2 (h) of the Act states that
“An agreement enforceable by law is a contact”. One of the elements of contract is
offer. Offer generally brings the meaning of a promise or proposal by one person to
another person with an intention to create a legally binding relationship. Section 2 (a)
of the Contracts Act 1950 specifically defines an offer or proposal as “ when one
person signifies to another his willingness to do or to abstain from doing anything,
with a view to obtain the assent of that other to the act or abstinence, he is said to
make proposal”.

Once a statement or action is deemed to be an offer, then the offeror becomes

legally bound by the offer when the offeree accepts the offer. Sometimes a person

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may wish to open negotiations rather than to make an offer. The Courts refer this
preliminary communication as an invitation to treat. An offer must be distinguished
from an invitation to treat as a response to an invitation to treat would not form a
binding contract, whereas a response to an offer would create a binding contract. An
invitation to treat is not an offer but it is merely an invitation from one party to
another party to make an offer. It is important to distinguish between an offer and an
invitation to treat because of its consequences but sometimes it is not easy to draw
such as distinction. Hence, based on decided cases, the Courts have formulated certain
guidelines for identifying invitation to treat .

The first guideline is the advertisement. The general rule is that advertisement in
newspapers or periodicals or television commercial are not offers, but an invitation to
treat. The same goes to web advertisement including those trading online services.
The advertiser is not making an offer through the advertisement but merely invites the
readers or the public to respond with an offer, it is entirely up to the advertiser
whether to accept the offer or reject the offer made. A contract would only be created,
if the advertiser accepts the offer made by the public. A contract would only be
created, if the advertiser accepts the offer made by the public.

The relevant case is in the case of HARRIS v NICKERSON , the defendant made
an advertisement for a sale of certain goods, including certain office accessories on a
certain date at a particular place. The plaintiff travelled to the location and discovered
that the office accessories had been withdrawn from the sale. The plaintiff brought an
action to claim damages and alleged that the Defendant had breached the contract
since the advertisement was an offer and his presence at the sale was an acceptance to
the offer. The Court rejected his claim and held that the advertisement was merely an
invitation to treat.

Another one of the guidelines stated is display of goods in a self-service shop or

shop window display. It is quite common for people to say that supermarkets or self-
service shops in having ‘sale’ are putting the goods “on offer” or that certain goods
are marked with label “special offer”. However, looking at the legal aspect, would
form a contract. This is because, when goods are displayed on the shelves with price
tags on in a self-service shop or at the shop window display, the shop owner is
actually making an invitation to treat. In other words, he invites people from the

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public to make an offer to him. The offer is made when customers select the desired
goods and bring them to the counter for payment. Hence, the offer comes from the
customers and not from the shop or the supermarket. When the offer is made by the
customer, it is entirely up to the cashier at the counter to make an acceptance or to
refuse the customer’s offer. A contract only concluded when the cashier accepts the
offer by the customers.

The relevant case is PHARMACEUTICAL SOCIETY OF GREAT BRITAIN V

BOOTS CASH CHEMISTS (SOUTHERN) LTD. Under the section 18 (1) of the
Pharmacy and Poisons Act 1933, it is an offence to sell certain medicines unless ‘the
sale is effected by, or under the supervision of, a registered pharmacist’. The
defendant introduced a system where some of these medicines were made available to
customers on a self-service basis. There was no supervision until the customer went to
the cashier where a registered pharmacist would supervise the transaction, and could
intervene, if necessary. The defendant was charged under the said Act as the plaintiff
claims that this was an offence because it was argued that the sale was complete when
the customer took an article from the shelves and put into his and her basket. The
Court of Appeal disagreed and held that the sale was made at the cash desk where the
customer made an offer to buy, which could be accepted or rejected by the cashier.
The display of goods is, therefore, an invitation to treat and not an offer.

In Leslie’s case, he saw the poster in the supermarket that read “Buy 3 packs of
Oceania tissue paper and get 1 pack free”. The poster is an example of advertisement
made by the supermarket. When he went to the display rack and take 4 pack of the
Oceania tissue paper, the tissue paper is a part of display of goods by the owner. Both
is an invitation of treat towards the customers and it not an offer. An offer is made by
Leslie when he brings the tissue paper to the payment counter for the cashier to made
acceptance. Up to this point, there is no contract is made between Leslie and Pick N
Go Supermarket and then Leslie cancel his plan to buy the tissue paper.

As a conclusion, Leslie does not have to pay for the 4 packs of the tissue paper
because he is not bound by any contract as the tissue paper is a part of advertisement
and display of goods which is just an invitation to treat.

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(b) On her way home from work, Dahlia’s car had a flat tire. A
bystander, Jay assisted Dahlia to change the tire. Grateful for
Jay’s help, Dahlia promised to pay RM100 to Jay. It has been a
month and Dahlia has still not paid the money to Jay.
Can Jay sue Dahlia for the money? (8 marks)

Answer :

The issue arise in this problem is whether Jay can take legal action towards
Dahlia for not paying him the RM 100 promised as change for assisting her to
change the tire.

One of the elements of contract is consideration. Consideration is something

which has a ‘value’ in the eyes of law and it becomes the basis of the contract. It
is a ‘price’ which is paid by one party in return to a promise or act done by
another party. This price may be an act or abstinence or a promise to perform a
future act or abstinence. Section 2 (d) provides that ‘when, at the desire of the
promisor, the promise or any other person has done or abstained from doing, or
promises to do or to abstain from doing , something, such act or abstinence or
promise is called a consideration for the promise’. It refers to what one party to
an agreement is giving or promising in exchange for what is being given or
promised from the other side. The definition of consideration can be seen in the
case of CURRIE V MISA. Lush J. stated that a “ A valuable consideration, in the
sense of law, may consist in some right, interests, profits or benefits accruing to
the one party ; or some forbearance, detriment, loss or responsibility given,
suffered or undertaken by the other ”. Based on section 2 (d), there are 3
categories of consideration which is executory, executed and past consideration.

One of the the categories is past consideration. This is where one promise is
made subsequent to an in return for an act that has already been performed. This
promise is made on account of a past consideration. According to Section 2 (d) ,
consideration is “when at the desire of the promisor, the promise or any other
person….has done or abstained from doing…, something…’. The phrase has

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done or abstained from doing suggest that an act prior to the promise would be
sufficient to constitute a valid consideration, even though it is clearly past,
provided it is done “at the desire of the promisor”. For example, X asks Y to help
him in finding his lost handphone. In response to that request, Y puts some effort
and finally finds it. When Y returns it to X and feeling thankful, X promise to pay
RM 200 to Y. X’s promise is made in return for the past for past act of Y. The
past act of Y is considered as a past consideration. Hence, X’s promise is a
contract.

This can be seen in the case of KEPONG PROSPECTING v A.E.

SCHMIDT & MARJORIE SCHMIDT. S a consulting engineer, had assisted
Mr. X in obtaining a prospecting permit for mining iron ore in the state of Johore.
S also helped in the formation of a company, Kepong Prospecting Ltd. S was
appointed as the Managing Director of the company. After the company was
formed, a contract was entered into between S and the company under which the
company promised to pay S 1% of the value of all ore sold from the mining land.
This promise was “in consideration of the service given by S for and on behalf of
the company before its formation, after incorporation and for future services…”.
However, the company later failed to pay to S. S claimed on the amount
promised. The issue was whether there was a valid consideration form S for the
promise of the company. It was held that the services given by S before the
promise was made were sufficient to constitute a valid consideration even though
those services were clearly past.

The general rule is that an agreement without consideration is void. Any

contract made without consideration is not valid and unenforceable. No party
could be bound by such contract. Section 26 (a), (b) and (c) provide exceptions
whereby certain agreement will still become a valid contract even though there is
no consideration in the agreement.

Agreement to compensate a past voluntary past voluntary act is one of the

exception. Section 26 (b) provides that ‘ it is a promise to compensate, wholly or
in part, a person who has already voluntarily done something for the
promisor…’. For this agreement to become a contract, there is are two
conditions that need to be fulfilled which are it is a promise or an agreement to

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compensate the promisee in wholly or in part and the promisee has voluntarily
done something for the promisor. Illustration (c) to section 26 Contracts Act
1950 which ‘ A finds B’s purse and gives it to him. B promises to give A RM 50.
This is a contract”. In the illustration, B’s promise is valid contract even without
consideration because B’s promise is a promise to compensate for a past
voluntarily act.

The word “voluntarily” is not defined in the Contracts Act, but it has been
interpreted in the case of J.M. WOTHERSPOON & CO LTD v HENRY
AGENCY HOUSE. There were promises of compensation made by the D to the
P in respect of past act. However these promises were not supported by
consideration. So, those promises could only be legally enforceable if it is a
promise to compensate a person who has already voluntarily done something for
the promisor. This is in accordance with section 26 (b). The court held that
“voluntarily” means the acts performed or done by one’s own free will, impulse
or choice and not constrained, prompted or suggested by another. In this case, the
P had acted on the suggestion of D. So the P’s action could not be said to have
been done voluntarily. Therefore the promise made by the D to compensate the P
was not an enforceable contract within the exception of section 26 (b).

In Jay’s case, it is a past consideration category as the promise is made

subsequent to and in return for an act that has already been performed. Then he
saw Dahlia and voluntarily decided to help her to change her flat tire. With that,
he has fulfilled the first condition to make the consideration as a contract which is
the promisee has voluntarily done something for the promisor. After that, Dahlia
promised to give RM 100 to Jay as a token of appreciation for his help. With that,
he has fulfilled another condition to make the consideration as a contract which is
a promise or an agreement to compensate the promisee in wholly or in part.

As a conclusion, Jay can take legal action towards Dahlia for not paying him
the amount of RM 100 that has been promised. This is because there is already a
contract bind between Jay and Dahlia as Jay has fulfilled conditions to make the
consideration to a contract. If Dahlia failed to pay the amount to Jay, she is
considered breaching the contract

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QUESTION 3
Discuss the legal position in the following situations with reference to
the Hire Purchase Act 1967:
(a) Shivani entered into a hire purchase agreement with EasyPay
Finance Bhd for the purchase of a couch. The agreement provided
for the payment of RM2000 in ten instalments. Three months later,
Shivani decided to assign the couch to her neighbour. The
company demanded that Shivani pay RM350 for stamp duty and
registration of the hire purchase agreement in her neighbour’s
name.
(9 marks)
Answer :

The issue is whether Shivani need to pay RM 350 to be able to assign the couch
her neighbour.

Part 4 of the Hire Purchase Act 1967 provides a few statutory rights to a hirer.
One of the right is the right to assign. The hirer is not an owner of the goods.
Therefore, he does not have the right to assign his rights over the goods to another
person. However, the hirer is entitled under Section 12 (1) of the Hire Purchase Act
to assign his rights, title or interest to another person with the consent of the owner. If
the owner’s consent is unreasonably withheld as if the owner refuses to give his
consent without any valid reason, the hirer may assign without the owner’s consent
after he has obtained an order from the High Court declaring that the owner’s consent
has been unreasonably withheld.

The owner’s consent is said to be unreasonably withheld if the owner request

extra payment or any other consideration for the purpose of giving his consent as
provided in Section 12 (2). It will also said to be unreasonably when the owner
requires other or additional guarantors to guarantee the assignee’s obligation whereas
the same guarantors who have guaranteed the hirer’s obligation under the Hire
Purchase agreement have agreed to guarantee the assignee’s obligation under the
agreement or where the assignee has furnished the same number of guarantors as was

13
furnished by the hirer to guarantee his obligation under the Hire Purchase agreement
as guarantors for his obligation under the agreement as provided under Section 12 (5)
(a) and (b).

However, in order to give his consent, the owner is allowed to require the hirer to
settle any defaults under the agreement as stated in Section 12 (4). In addition, the
hirer must also bear the costs of stamping or registering the assignment agreement.

In Shivani case, she wanted to assign her rights to her neighbour after entering a
contract with Easy Pay Finance Bhd. Easy Pay Finance Bhd. demanded that Shivani
pay RM350 for stamp duty and registration of the hire purchase agreement in her
neighbour’s name in order for them to give their consent. The owner’s concerns is not
unreasonably and withheld because the owner is allowed to asked for the costs of
stamping and registering the assignment agreement.

As a conclusion, Shivani need to pay the amount of RM 350 to Easy Pay Finance
Bhd. in order to get the company consent to assign the right to her neighbour
according to Section 12 (4) of the Hire Purchase Act 1967.

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(b) Wong entered into a hire purchase agreement with EasyPay
Finance Bhd for the purchase of a lawnmower. The hire purchase
agreement was hand-written in the Chinese language using a
green coloured pen.
(7 marks)
Answer :

The issue for this problem is whether the contract made between Wong and Easy
Pay Finance Bhd. Is a valid contract.

The Hire Purchase Act 1967 provides for the procedures that must be complied
with for a valid formation of a Hire Purchase agreement. Failure to comply with the
requirements of the Act would render the agreement void or in some circumstances,
the commission of an offence.

A part of procedure to made a valid Hire Purchase agreement is the agreement

must be in writing. It is the duty of the owner to prepare a Hire Purchase agreement.
Under Section 4A (1), a Hire Purchase agreement shall be in writing. According to
Section 45, an agreement is considered not to be in writing if the handwriting exclude
the signature or initial, is not clear legible or if the print size of the font is smaller than
ten- point Times.

According to Section 4A (1A) requires a Hire Purchase agreement to be in

National Language or English Language. Under Section 4A (2), if an agreement is
not made in writing or not in the prescribed language, the consequence is that the
agreement is void. Section 4A (3) states that failure to comply with the above
requirement, the owner would be guilty of an offence under the Act. The penalty
imposed on the owner for the offence is as prescribed under Section 46.

In Wong’s case, the agreement made between he and Easy Pay Finance Bhd. for
the purchase of a lawnmower was made hand-written in the Chinese language using a
green coloured pen. The agreement made does not comply the condition of a valid

15
agreement as it need to be made in National Language or English Language. The
consequences of this is the agreement is void.

As a conclusion , the contract made between Wong and the Easy Pay Finance
Bhd. is void because the writing agreement is not in the prescribed language and it is
considered a failure to comply the Hire Purchase Act requirements.

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(c) In September 2018, Jebat signed an agreement with EasyPay
Finance Bhd for the purchase of a lorry under hire purchase. In
March 2020, Jebat was involved in an accident and passed away.
On 15 June 2020, EasyPay Finance Bhd served on Jebat’s wife, a
notice to repossess the lorry in default of two successive
instalments.
(4 marks)
Answer :

The issue of this problem is whether Easy Pay Finance Bhd. Can repossess the
lorry from Jebat’s wife because of default of two successive installments.

The main duty of a hirer under a Hire Purchase agreement is to make the payment
of the monthly installments without fail. When the hirer fails to pay the monthly
installments, the owner can repossess the hire-purchase goods as the goods belong to
the owner. However, in order to repossess the goods, the Hire Purchase Act 1967 lays
down the procedures which must be complied with by the owner.

The main procedure is to decide that there must be sufficient defaults in payment
of monthly installments. Under Section 16 (1), the right of repossession cannot be
exercised by the owner unless the hirer has paid less than 75% of the total cash price
of the goods and the hirer defaulted or failed to pay installment for two successive or
continuous months of the monthly installments. If the hirer has paid installments
which totalled up to more than 75% of the cash price of the goods and the hirer
defaulted 2 successive installments, the owner must obtain an order from the court
before he can exercise the right of repossession. This is provided under Section 16
(1A). If the hirer is deceased , the owner can only repossess after 4 successive defaults
of payment of the monthly installments by the representative of the deceased hirer.

In Jebats’s case, he entered a Hire Purchase agreement with Easy Pay Finance
Bhd. to purchased a RM 88,674.00 lorry. He then passed away after involved in an
accident after paying more than RM 70,000 to the company.After that, Jebat’s wife
has a 2 successive default payment. She is under the Section 16 (1A) where she is
allowed to have 4 successive default payment before the company can repossess the
lorry.

As a conclusion, the company can not repossess the lorry as the Jebat’s wife is

17
only representatives of the deceased hirer and the company can only repossess the
lorry after 4 successive defaults payment.

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