[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]The repossession of hire-purchase goods by the owner has been discussed in a previous post [see here] where suggestions were proffered on how to improve the statutory provisions on such matter in order to ensure that any new, improved hire-purchase legislation in Nigeria has robust provisions on the issue. Another factor that could affect the provisions of the hire-purchase legislation in respect of repossession of hire-purchase goods is the death of the hirer before the termination of hire-purchase relationship. In this article, we shall review the present position of the Hire-Purchase Act, Cap. H4, Laws of the Federation of Nigeria 2004 (HPA) on the issue and make some recommendations for consideration in any attempt to reform the HPA.
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The HPA does not take into account the premature death of the hirer which could occasion an unintended default by the hirer in complying with the hire-purchase agreement. For example, by virtue of section 9(5) of the HPA, the owner is empowered to repossess a motor vehicle, the subject matter of a hire-purchase agreement, where the hirer has defaulted in the payment of three or more instalments. This repossession is clearly purposive; being to protect the motor vehicle from damage or depreciation pending the determination of any action. This provision applies irrespective of what may be the cause of the default. Thus, where the unexpected, unintended and premature death of the hirer occasions the default, the owner technically and legally, can repossess the hire-purchase goods once there has been default in the payment of three or more instalments.
This could occasion grave injustice on the hirer; especially so, if prior to the death of the hirer he had been regular with his payment of the periodic instalments under the hire-purchase agreement. This repossession could deny the estate of the hirer of the right to benefit from the hire-purchase agreement even when the estate is willing and able to step into the shoes of the hirer to continue the relationship.
This negates the provision of section 20(1) of the HPA where the term “hirer” is defined to include “a person to whom the hirer’s rights or liabilities under the agreement have passed by assignment or by operation of law”. The implication of this expansive definition is that the owner can proceed against the estate of the hirer if he obtains a favourable judgment against a deceased hirer. Consequently, for purposes of equity and fairness, the estate of the deceased hirer should be able to assert some rights against the owner on account of the hire-purchase agreement entered into by the hirer with the owner before the death of the hirer.
The death of the hirer should be accommodated. Where it is established that the hirer has died and prior to his death the hirer was not in default regarding his obligations under the hire-purchase agreement, then it may be necessary for the HPA to provide that the estate of the deceased hirer be notified of the obligations of the hirer under the hire-purchase agreement before enforcing the terms of the agreement against the hirer (or his estate). In the case of default in the payment of the periodic instalments, the estate should be given the opportunity to make the payment. The HPA could prescribe a time period within which the payment should be made by the estate of the hirer commencing from the date when the notice of the outstanding payment is brought to their attention.
Also, provisions of the extant HPA which empowers to owner to repossess hire-purchase goods on account of default in the payment of the periodic instalments, such as section 9(5) of the HPA, could be made to be subject to a demand for the payment having been made of the estate of the deceased hirer. A time period also could be stated in the HPA for the estate of the deceased hirer to make the payment failing which the owner can enforce his rights under the hire-purchase agreement or the HPA.
The above proposal will enable the estate of the hirer enjoy the benefits of the hire-purchase agreement which the hirer had laboured to keep faith with before the death of the hirer. This is particularly fair where the hirer has paid a substantial fraction of the hire-purchase price. As is well-known, the hire-purchase price is a combination of the purchase price (cash price) of the item and the interest for the period of credit granted. Consequently, the periodic instalment is a repayment of part of the cash price and the interest. Thus, where substantial part of the instalment has been paid by the hirer, it would be unfair to deny him or his estate of the opportunity to complete the transaction. This can only be achieved if the HPA makes some provisions to accommodate situations where default by the hirer is occasioned by the death of the hirer.
[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]
Next week, we shall consider another issue which deserves some attention in any attempt to improve the legislative stipulations for hire-purchase transactions in Nigeria. You may have some comments to make on the issue considered in this article. 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.