[easyazon_block add_to_cart=”yes” align=”left” asin=”1112044760″ cloaking=”default” layout=”left” localization=”default” locale=”US” nofollow=”default” new_window=”default” tag=”thecorpro-20″]The Law Relating to the Hire-Purchase System : With An Appendix of Forms[/easyazon_block]A major lacuna in the Hire-Purchase Act, Cap H4, Laws of the Federation of Nigeria 2004 (HPA) relates to the absence of a provision empowering the hirer to assign his rights and interests in a hire-purchase agreement should he so desire. This lacuna is more obvious if cognisance is taken of the provisions of section 20(1) of the HPA which defines the term “hirer” to include “a person to whom the hirer’s rights or liabilities under the [hire-purchase] agreement have passed by assignment”. The implication of this is that while it is obvious that the assignment of a hire-purchase agreement is contemplated by the HPA, the HPA failed to make explicit provisions regarding such matter. Consequently, the hirer’s ability to assign his rights and interests in a hire-purchase agreement would be predicated on common law, no matter how inconvenient. It is, therefore, imperative that the HPA be amended to expressly provide for the hirer’s right to assign his rights and interests in a hire-purchase agreement.
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By the nature of hire-purchase transactions, ownership of the hire-purchase property does not pass to the hirer until he has exercised his option to purchase the goods. Before he has exercised his option, the hirer is merely given possession and use of the hire-purchase goods. In consequence of this, he is obliged to make periodic payments to the owner. Default by the hirer in making the periodic payments could have very severe consequences for the hirer. A hirer who has made substantial periodic payments in respect of a hire-purchase transaction which he no longer wishes to continue with would rather have his interests in the transaction transferred to another party for valuable consideration instead of merely abandoning the hire-purchase transaction or otherwise terminating it. By assigning his interests to another person for consideration, the hirer may be able to recoup some of his excess investment in the transaction. The payment made by a hirer who does not continue the relationship to its logical end is considered to be excess because the periodic payments made by the hirer are made up of repayment of the cost price of the items and the interest element of the credit facility afforded the hirer. Thus, if the transaction is aborted, he would forfeit the part payment regarding the cost price that he would have made. It is therefore fair that the hirer is allowed to assign his interest to somebody else who will rightly step into his shoes. In such a situation, everybody is legitimately a winner. That is to say, the hirer can recover part of his payment toward the cost of the item; the owner will not be confronted with an aborted hire-purchase transaction and abandoned, depreciated hire-purchase goods; and the assignee would continue an existing hire-purchase relationship and will therefore be opportune to opt to purchase the hire-purchase goods at a relatively shorter period than if he entered into a fresh hire-purchase agreement; even with the same owner!
The benefit of expressly providing for the hirer’s right to assign a hire-purchase agreement is mainly to have the transaction adequately defined instead of leaving it to common law. An express provision in the HPA regarding the right of the hirer to assign his rights and interests under a hire-purchase agreement ensures that the circumstances under which the assignment could take place would be well-defined with clarity and certainty. Furthermore, it eliminates any speculations or uncertainty regarding the right of assignee of the hirer’s rights and interests.
It is suggested that any future review of the HPA should expressly provide for the hirer’s right of assignment of the hire-purchase agreement. This will ensure that certain issues which could be a source of future disagreement between the parties are taken care of. Such issues include the requirement of the consent of the owner for the assignment to be validly concluded; what happens where the owner unreasonably withholds his consent to the assignment; what would amount to an unreasonable withholding of consent by the owner; whether the hirer or assignee is required to make any additional payment to the owner as a result of the assignment; the powers of the court regarding litigations concerning hirer’s assignment of hire-purchase agreement; whether the hirer will be entitled to assign a hire-purchase agreement where he is in default and whether the assignee may be permitted to remedy this default on behalf of the hirer before concluding the assignment; and stipulating who bears the cost of the stamping and registration of the assignment instrument as necessary. These are very crucial matters. They are better expressly treated in the HPA.
On Thursday, February 21, 2013, we shall consider the issues relating to the death of the hirer before the end of a hire-purchase agreement. The present position of the HPA on the matter is inadequate and therefore deserves to be reviewed. Nevertheless, should you have any comments on the hirer’s right to assign his rights and interests in a hire-purchase agreement, kindly share such views by using the comments area of this post below. If you are already a registered user, you will be required to log in to comment on this post; otherwise, you will have to register before posting your comment. Registration is simple and FREE.
[easyazon_block add_to_cart=”yes” align=”center” asin=”1112044760″ cloaking=”default” layout=”left” localization=”default” locale=”US” nofollow=”default” new_window=”default” tag=”thecorpro-20″]The Law Relating to the Hire-Purchase System : With An Appendix of Forms[/easyazon_block]