Commercial Law
Hire Purchase Law
Hire Purchase Act 1967
Previously all HP matters are governed by the
Contracts Act 1950
After the HPA was passed, it regulates all HP matters
by providing form and contents of HP Agreements to
define legal rights, duties and liabilities of the parties
involved (Hirers and Owners)
The idea is to protect consumers
Hire Purchase Agreement
In the HPA, the hirer cannot sell the goods as he is not
the owner
HPA is more than a simple contract of hire, as it gives
the hirer an option to purchase the goods (United
Engineering Malaysia v Lai Ping Yoon)
Definition of HP - S.2(1) – letting of goods with an
option to purchase, an agreement to purchase goods by
installment
Goods covered
Based on the list in the HP Act – The First Schedule
Minister may vary the list from time to time
Contents of the First Schedule – all consumer goods
and motor vehicles.
Consumer goods – S.2(1) goods purchased for
personal, family and household purposes.
Goods bought for business purposes is not under this
Act – with the exception of motor vehicles
Right of Repossession
Owner has the ROR
ROR is safeguarded with restrictions.
Must wait of EOD first
What is EOD?
Procedure of Repossession
Notice
S.16
O must serve to H a notice writing his intention to retake
possession
Period fixed by notice must have expired and this must not be
less than 21 days
O must deliver to H a document acknowledging receipt of
goods. If H not present, O must sent it immediately after
taking possession. AR Document must contain description of
the goods, date, time, and place of repossession.
O must serve on H and G a notice in writing as set under the
5th schedule within 21 days after repossession.
O cannot sell or dispose the goods without written consent of
H until 21 days after the date of the said notice. (s.17)
H rights
S.18
Within 21 days after service of s.16 notice, H can give O
a notice in writing:
requiring O to redeliver the goods OR
require O to sell the goods to any person introduced by H
who is prepared to buy for cash at a price not less than the
estimated value of the goods OR
H can recover from O if value of goods is less than the
net amount payable
H can regain possession
S.19
H pays to O any amount due
Remedies any breach
Pay the repossession cost to O