[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]In reality, a typical hire-purchase agreement confers a bundle of rights and obligations on the parties to the transaction. A major failing of the Hire-Purchase Act, Cap H4, Laws of the Federation of Nigeria 2004 (HPA) is that it did not identify these rights in an ordered and aggregated manner. It is a herculean task trying to ascertain the rights and obligations of the parties to hire-purchase transactions. In the reform of the HPA, the present chaotic provisions regarding the rights and obligations of the parties to hire-purchase arrangement should be aggregated and put in a Part of the statute that should deal with such matters.
To facilitate the process, we shall identify the typical rights and obligations of parties to a hire-purchase agreement which should be provided for in any future HPA to be enacted in Nigeria.
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Right of hirer to purchase at any time with rebate:
The hirer should have a right to, at any time during the course of the hire-purchase, purchase the goods without having to wait for the expiration of the hire-purchase agreement. When this occurs, he should get some rebate because the interest element of the hire-purchase price would have been reduced.
Right of the hirer to terminate agreement at any time:
The hirer has a right to terminate the hire-purchase agreement at anytime. This should be provided for.
Right of the hirer to appropriate payments in respect of two or more agreements:
Where a hirer has more than one hire-purchase agreement with the same owner, he has a right to appropriate his payment in respect of the hire-purchase agreements. Where he fails to appropriate his payment, the HPA normal provides for how his payment should be appropriated.
Assignment and transmission of hirer’s right or interest:
A hirer should have the right to assign his interests in a hire-purchase agreement. This matter is not presently provided for in the HPA. It shall be discussed in greater details next week. In addition to the right of assignment, there should be clear and fair provisions regarding the transmission of the rights of the hirer upon his death, but before the hire-purchase transaction has come to an end. This is another issue that will be treated in full some other time.
Right of hirer in case of seizure of goods by owner:
The HPA gives the owner the right to repossess the goods the subject matter of a hire-purchase agreement under certain circumstances. In spite of this, the hirer still has some rights during this period which the HPA should provide for adequately. The issues concerning repossession have been considered in an earlier article [see here].
Obligations of hirer to comply with agreement:
This is a primary obligation of the hirer which should be clearly spelt out. The consequences of any breach should also be stated.
Obligation of hirer to take care of the goods:
It is imperative that this obligation is specifically provided for in the HPA and stated in the hire-purchase agreement so as to obviate any disagreements over it in future.
Obligation of hirer in respect of use of goods:
If there are special situation governing the use of the hire-purchase goods, this should be stated also.
Obligation of the hirer to give information as to the whereabouts of goods:
The disclosure of the whereabouts of the goods is consistent with the right of the owner to receive information regarding the whereabouts of the goods.
Rights of owner when there is default by the hirer:
Where a hirer defaults, the owner has certain rights under such circumstances. The HPA should expressly provide for them.
Rights of owner of in case of termination:
When the hirer terminates a hire-purchase agreement, the owner still has some rights under the agreement. These should be stated.
Restriction on owner’s right to recover possession of goods:
There are circumstances under which the owner can repossess the goods. In some cases, there are procedures stipulated which limit the right of the owner to repossess. These should be expressly indicated
Relief against termination for non-payment of hire:
There may be cases where the court may decide that the relief that is fair in the matter, in the case of termination for default in the payment of the periodic instalments, may not be to grant possession of the goods to the owner.
Obligation to serve notice:
The obligation of the owner to ensure that the hirer is given adequate notice before the enforcement of certain rights is important and should be provide for.
Obligation of owner to supply copies of the agreement and other information:
The hirer is entitled to a copy of the hire-purchase agreement. Also, the owner is obliged to furnish the hirer with some information regarding the transaction at the request of the hirer or his agent. If payment would be necessary before the information is provided, that should be stated.
Apart from the parties to the hire-purchase agreement (that is, the owner and the hirer), there are cases where guarantors may be required before the hire-purchase agreement may be concluded. The HPA should also contain provisions regarding such matters. The issues that should be dealt with by the HPA in relation to guarantor include: the circumstances under which the owner may require guarantors; the role of the guarantor in the hire-purchase arrangement; the rights of the guarantor against owner; the rights of the guarantor against hirer; and circumstances under which the guarantor may be liable.
If the above rights and obligations of the parties are clearly provided for in the HPA, perhaps under a specific Part of the statute, it would facilitate referencing and obviate the waste of time in searching for and trying to determine the nature and extent of rights and obligations of parties to hire-purchase agreements and the role of guarantors in the scheme of things.
Next week, we shall consider the assignment of the hirer’s rights under a hire-purchase agreement. The present position of the HPA on this matter is inadequate and therefore deserves to be reviewed with a view to securing its amendment. Nevertheless, should you have any comments on the aggregation and express provision of the rights and obligations of the parties, 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.