FORMATION AND NATURE OF HIRE PURCHASE AGREEMENT
3. FORMATION AND NATURE OF HIRE PURCHASE
AGREEMENT
Formation
Before a hire purchase effected agreement, the Act
imposed a number of legal obligations on the owner and dealer
S.4
(1) Before any hire-purchase agreement is entered into in
respect of any goods—
(a) in
a case where negotiations leading to the making of the hire-purchase agreement
is carried out by any person who would be the owner under the hire-purchase
agreement to be entered into, such person shall serve on the intending hirer a
written statement duly completed and signed by him in accordance with the form
set out in Part I of the Second Schedule;
(b) in
a case where negotiations leading to the making of the hire-purchase agreement
is carried out by a dealer, such dealer shall—
(i) serve on the intending hirer a
written statement duly completed and signed by him in accordance with the form
set out in Part I of the Second Schedule; and
(ii) at any time after the service of the
written statement referred to in subparagraph (i) but before the hire purchase agreement
is entered into, serve on the intending hirer a written statement duly
completed and signed both by him and the prospective owner in accordance with
the form set out in Part II of the Second Schedule.
Part I of the Second Schedule
A summary of the hirer financial obligations; and must set out the
following;
- Short
description of the goods
- New/second hand
- Address the
goods will be kept
- Cash price
- Deposit
- Freight
charges, if any
- Insurance and
registration (motor vehicle)
- Terms charges
(rate per annum, total amount of the terms charges)
- Different
between cash price and total amount payable
- The instalment
payments
During Agreement
Hire-purchase
agreement to be in writing
A hire-purchase agreement in respect of
any goods specified in the First Schedule shall be in writing - section 4A (1),
if not the agreement be void and owner will be guilty of an offence under this
Act.
Hire-purchase agreement to be signed
Every hire-purchase agreement shall be
signed by or on behalf of all parties to the agreement – Section 4B (1).
No owner, dealer, agent or person acting on behalf of the owner shall require
to sign a hire-purchase agreement unless such hire-purchase agreement, form or
document has been duly completed – Section 4B (2)
Effect if not follow this proviso: the
agreement void and guilty of an offence
MING LIAN CORPORATION SDN BHD v HAJI NORDIN [1974] 1 MLJ 52
The court gave a
decision that the enforceability of a hire-purchase agreement was not affected
if the hirer signed an agreement with blank spaces which were later filled in
by the owner provided that the hirer was aware of the terms and knew
what he was signing. The defendant in this case had signed an agreement
with a certain portion of it were blank. The particulars were filled in after
the agreement was signed.
Contents of Hire-Purchase Agreement
Every hire-purchase agreement shall
(i) specify a date on which
the hiring shall be deemed to have commenced;
(ii) specify the number of
instalments to be paid under the agreement by the hirer;
(iii) specify the amounts
of each of these instalments and the person to whom and the place at which the payments of these instalments are to
be made;
(iv) specify the time for
the payment of each of those instalments;
(v) contain a description
of the goods sufficient to identify them;
(vi) specify the address
where the goods under the hire purchase agreement are- S.4C(1) (a)
Where any part of the consideration is or
is to be provided otherwise than in cash, shall contain a description of that part
of the consideration - S.4C(1) (b)
S.4C(1) (c) instructed
to set out in a tabular form these particulars:
(i) the price at which at
the time of signing the agreement the hirer might have purchased the goods for
cash (“cash price”);
(ii) the amount paid or
provided by way of deposit (showing separately the amount paid in cash and the
amount provided by any consideration other than cash;
(iii) any amount included in
the total amount payable to cover the expenses of delivering the goods or any
of them or to the order of the hirer (in this Act referred to and in the
agreement to be described as “freight”);
(iv) any amount included in
the total amount payable to cover vehicle registration fees in respect of the goods
(in the agreement to be described as “vehicle registration fees”);
(v) any amount included in
the total amount, payable for insurance in respect of the goods or any of them;
(vi) the total of the
amounts referred to in subparagraphs (i), (iii), (iv) and (v) less the deposit;
(vii) the amount of any
other charges included in the total amount payable (in this Act referred to and
in the agreement to be described as “terms charges”);
(viii) the annual percentage
rate for terms charges which shall be calculated in accordance with the formula
set out in the Seventh Schedule;
(ix) the total of the
amounts referred to in subparagraphs
(vi) and (vii) of this
paragraph (in this Act referred to as “the balance originally payable under the
agreement”); and
(x) the total amount payable;
Separate Agreement for every item of
goods
There shall be a separate hire-purchase
agreement in respect of every item of goods purchased under this Act – S.4D (1).
If not, the agreement is void and the owner shall be guilty of an offence.
After Agreement
Copy of Documents to be served on hirer
Within fourteen days after the making of
a hire-purchase agreement, the owner shall serve on the hirer and the
guarantors a copy of the agreement each –S.5(1)
FORMATION AND NATURE OF HIRE PURCHASE AGREEMENT
Reviewed by Kamaruddin Mahmood
on
10:34:00 PTG
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