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    Hire Purchase Agreement

    Uploaded by

    Pradeep Gautam
    Hire purchase is an agreement where a buyer makes a down payment on goods and pays the remaining balance in installments, but ownership does not transfer until all payments are made. Key aspects of hire purchase agreements include installment payments made over a set period, possession of goods delivered at signing, and ownership transferring upon final payment. The document outlines protections for hire purchasers under Malaysian law, including requirements that agreements be in writing and signed, and statutory rights such as receiving copies of agreements, assigning rights to others, early completion, and terminating contracts.

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    © All Rights Reserved
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    Hire Purchase Agreement

    Uploaded by

    Pradeep Gautam
    191 views20 pages
    Hire purchase is an agreement where a buyer makes a down payment on goods and pays the remaining balance in installments, but ownership does not transfer until all payments are made. Key aspects of hire purchase agreements include installment payments made over a set period, possession of goods delivered at signing, and ownership transferring upon final payment. The document outlines protections for hire purchasers under Malaysian law, including requirements that agreements be in writing and signed, and statutory rights such as receiving copies of agreements, assigning rights to others, early completion, and terminating contracts.

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    Hire purchase is an agreement where a buyer makes a down payment on goods and pays the remaining balance in installments, but ownership does not transfer until all payments are made. Key aspects of hire purchase agreements include installment payments made over a set period, possession of goods delivered at signing, and ownership transferring upon final payment. The document outlines protections for hire purchasers under Malaysian law, including requirements that agreements be in writing and signed, and statutory rights such as receiving copies of agreements, assigning rights to others, early completion, and terminating contracts.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    191 views20 pages

    Hire Purchase Agreement

    Uploaded by

    Pradeep Gautam
    Hire purchase is an agreement where a buyer makes a down payment on goods and pays the remaining balance in installments, but ownership does not transfer until all payments are made. Key aspects of hire purchase agreements include installment payments made over a set period, possession of goods delivered at signing, and ownership transferring upon final payment. The document outlines protections for hire purchasers under Malaysian law, including requirements that agreements be in writing and signed, and statutory rights such as receiving copies of agreements, assigning rights to others, early completion, and terminating contracts.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
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    Hire Purchase

    Agreement
    By :
    Pradeep Gautam
    Ghyasang Ghising
    Pukar K.C
    Meaning and Definition

    • Hire purchase is an arrangement for buying expensive consumer goods,


    where the buyer makes an initial down payment and pays the balance plus
    interest in installments.
    • The term hire purchase is commonly used in the United Kingdom and it's
    more commonly known as an installment plan in the United States.
    • However, there can be a difference between the two:
    Meaning and Definition

    • With some installment plans, the buyer gets the ownership rights as soon
    as the contract is signed with the seller.

    • With hire purchase agreements, the ownership of the merchandise is not


    officially transferred to the buyer until all the payments have been made.
    Meaning and Definition
    • A hire purchase agreement is defined in the Hire Purchase Act, 1972 as
    peculiar kind of transaction in which the goods are let on hire with an
    option to the hirer to purchase them, with the following stipulations:
    • Payments to be made in installments over a specified period.
    • The possession is delivered to the hirer at the time of entering into the
    contract.
    Meaning and Definition
    • The property in goods passes to the hirer on payment of the last
    installment.
    • Each installment is treated as hire charges so that if default is made in
    payment of any installment, the seller becomes entitled to take away the
    goods, and
    • The hirer/ purchase is free to return the goods without being required to
    pay any further installments falling due after the return.
    For Example
    Formation of Hire Purchase Agreement

    Procedure of Hire Purchase:

    • The Dealer, contracts with finance co. for financing his hire purchase
    deals.
    • The customer selects the goods for HP, and dealer arranges for the
    complete set of documents.
    Formation of Hire Purchase Agreement

    • Dealer sends documents to finance co. with request to purchase the goods,
    and accept the HP transaction.
    • The finance co. signs the agreement and sends copy along with EMI
    details to dealer.
    Formation of Hire Purchase Agreement

    • Down payment by customer on completion of proposal form.


    • Dealer delivers the goods to the customer, property passes on to the
    finance co..
    • Hirer pays EMIs, and on last payment , the ownership passes on to him,
    with loan completion certificate by the finance co
    Protection of Hirers
    To Protect Hirers, the Following Requirements Must be Fulfilled:

    1. The hire-purchase agreement must contain all the information prescribed


    in the Second Schedule of the HPA, such as details of the price, interest
    rate, date of monthly payment, amount of instalment, number of
    instalments, processing fees, total payable amount, date of
    commencement, assignment details, and early settlement details;
    Protection of Hirers
    2. The agreement must be in writing, and be in English;
    3. The agreement must be signed by all parties;
    4. A copy of the agreement must be sent to the hirer within 7 business days;
    5. The hirer must also be given notification of his rights under the 
    Third Schedule of the HPA, such as being able to make a request in
    writing for a copy of the agreement and/or the statement of account.
    Protection of Hirers
    The Hirer also has Certain Rights under the Hire-Purchase Act:
    1. The hirer can request for information such as a copy of the agreement,
    the amount paid, the amount outstanding, and the amount owed, from the
    owner;
    2. The hirer can assign his rights to another person. This means that the
    other person can become the hirer instead and take over the hire-
    purchase;
    Protection of Hirers
    3. The hirer can choose to complete the agreement early by paying the net
    balance remaining. For example, if there are 4 instalments still
    outstanding, he can pay the entire outstanding sum in one payment, such
    that ownership may be transferred to him immediately.
    4. The hirer can terminate the agreement by returning the goods. The
    agreement ceases upon termination, but the hirer may still have to pay an
    agreed sum as compensation for termination.
    Statutory Rights Of Hirers

    • Under hire purchase agreement, you have to know that you are the hirer,
    and the owner is the financial institution that gives you the loan.
    • Once you become the hirer under the HPA 1967, you are entitled the
    following statutory rights:
    1. Right to copy of agreement and statement of your current position
    You may request the owner to provide a copy of hire purchase agreement and a written
    statement showing the amount paid, unpaid and payable under the hire purchase
    agreement and the amount derived from interest or overdue installments.
    Statutory Rights Of Hirers

    2. Right to the appropriation of payment when you have more than one
    agreement with the same owner
    You have the right to appropriate payment (divide the payment) where you have more
    than one agreement, and the payment is insufficient to discharge the total amount due.
    For example, you have two hire purchase agreement where the total amount of monthly
    installment is RM1,000. For May 2015, you have only RM800. You have the right to
    discuss with the owner to appropriate the payment.
    Statutory Rights Of Hirers

    3. Right to apply for an order for goods to be removed


    It is compulsory for you to keep the goods in a place stated in the agreement, but you
    can ask the owner for permission to move the goods to another place. If the owner
    refuses, you can apply to the Magistrate court.
    4. Rights to assign your right under the agreement
    The law allows you to give your right, title and interest under a hire purchase
    agreement to another person with the consent of the owner
    Statutory Rights Of Hirers

    5. Passing of rights by operation of law


    On the hirer’s death, all his property and rights under the hire purchase agreement will
    be passed to his personal representative who must comply with the provisions of the
    agreement.
    6. Right to early completion of the agreement
    If you think that you want to complete the agreement earlier than the agreed period,
    you must give notice in writing to the owner of your intention and pay all necessary
    payments under the agreement.
    Statutory Rights Of Hirers

    7. Right to terminate the contract


    If you cannot afford to proceed with the installment payment, you may terminate the
    hire purchase agreement by returning the goods to the owner.
    8. Right of hirer on repossession by owner
    Do you know that during repossession (i.e where the owner takes possession of the
    goods because you are unable to pay the installments), you may introduce a cash buyer
    to the owner. You are entitled for any difference between the amount which have been
    paid by the cash buyer with the value of the goods.
    Statutory Rights Of Hirers

    9. Right of hirer in respect of term charges exceeding the prescribed


    rate.
    The term charges should not be higher than the prescribed rate (i.e 10%
    per annum). If the charge is higher, you have the option either to treat the
    hire purchase agreement as void or to have your liability reduced
    accordingly.
    Thank You !!!

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