CHAPTER 5;
Law of Hire Purchase Hire Purchase Act 1967
Prepared by;
Alizah Ali Department of Law
UITM Bandaraya Larkin
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At the end of the class, students are able to understand…
The definition of HP The definition of owner, hirer, price and goods The formation of HP (b4 & during the agreement-6) Liability of owner in the case of mispresentation Statutory Rights & Duties of Hirer(8) Statutory Duties & Obligation of Hirer(3) Right of owner in repossession Right or Hirer After Repossession
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H
ire P
urc
hase
Sect 2(1) of Hire Purchase Act 1967
The definition of HP
or
Letting of goods with an option to purchase
Purchase of goods by installment
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The definition of HP
At the time contract is
made
Ownership is not transfer to
the Hirer
Hirer only obtain the
possession of the goods
The ownership will remain with the
Owner until payment is complete
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The definition of HP
Credit Corporation (M) Sdn Bhd vs
The Malaysian Industrial Finance
Corp
Concept of HP …
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definition of owner, hirer, price and goods
owner hirer
price goods
Sect 2(1) HPA 1967
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definition of owner, hirer, price and goods
goods
Sect 2(1) HPA 1967
1st Schedule of
HPA 1967
Consumer goods
Motor
vehicles
Case : Kesang Leasing Sdn Bhd Vs Mohd Yusof Ismail
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formation of HP
1. Giving 2nd Schedule Notice B4 agreement
2. Agreement must be in writing
3. Agreement must be signed
4. Content of HP agreement
5. Separate agreement for every item of goods
6. Copy of agreement must be served on the Hirer
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• Before agreement of HP is made
• A must Sec 4(1)(a) of HPA 1967
• Owner made a complete set of 2nd Schedule
Sect 4(1)(b)(i) & (ii) of HPA 1967
• Sort of quotation description of the goods
summary of financial obligation
formation of HP
1. Giving 2nd Schedule Notice Sect 4(1) HPA
1967
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formation of HP
1. Giving 2nd Schedule Notice Sect 4(1) HPA
1967
Method of service
Acknowledge receipt
In person
NO .. No need to pay any considera
tion
No obligation to enter into the contract
YES .. Sect 46
RM3000 @ 6 months
imprisonment -alizah ali-
formation of HP
1. Giving 2nd Schedule Notice Sect 4(1) HPA
1967
If no 2nd Schedule
Notice …
Contract is void
Sect 4 (4) of HPA 1967
Affin Credit (M) Sdn Bhd vs Yap Yuen Fui
Guilty Sect 46 of HPA 1967
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formation of HP
2. Agreement must be in writing Sect 4A HPA
1967
If not in writing…
Contract is void
Guilty Sect 46 of HPA 1967
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• All parties to the agreement must sign Sect 4B(1) HPA 1967
• Sign a complete agreement and not a blank agreement Sect 4B(2) HPA 1967
formation of HP
3. Agreement must be signed Sect 4B HPA
1967
If not sign…
Contract is void
Guilty Sect 46 of HPA 1967
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oDate of agreement
oNo of installment
oAmount of each installment\time for payment
oDescriptions of goods
oAddress where the goods placed
formation of HP
4. Content of HP agreement Sect 4C HPA
1967
Sp
ecif
y …
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oCash price
oDeposit price
oVehicles registration
oInsurance amount
oBalance original payable
oTotal amount payable
formation of HP
4. Content of HP agreement Sect 4C HPA
1967
Tab
ula
r fo
rm …
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formation of HP
4. Content of HP agreement Sect 4C HPA
1967
If not contain…
Contract is void
Guilty Sect 46 of HPA 1967
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formation of HP
5. Separate agreement for every item of goods Sect 4D HPA
1967
If not contain…
Contract is void
Guilty Sect 46 of HPA 1967
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formation of HP
6. Copy of agreement must be served on the Hirer Sect 5 HPA
1967
Within 14 days after making the contract
hirer
guarantor
Sect 5(1) HPA 1967
A copy of HP agreement
A copy of insurance
policy
Sect 5(3) HPA 1967
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formation of HP
6. Copy of agreement must be served on the Hirer Sect 5 HPA
1967
If not get a copy…
Contract is void
Sect 5(1A) HPA 1967
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Liability of owner in the case of mispresentation
owner Mispresentation
Hirer may… dealer
Sect 8(1)(a) HPA 1956
RESCIND the contract
Sect 8(1)(b) HPA 1956
Claim for DAMAGES
Lau Hee Teah vs Hargill
Engineering Sdn Bhd
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Liability of owner in the case of mispresentation
Exemption clause
Exclude, limit & modify
Contract is VOID Sect 8(2)
HPA 1957
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Liability of owner in the case of mispresentation
Right of innocent owner
Dealer mispresentation
Innocent owner may
be indemnified
by the Dealer
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Statutory Rights & Duties of Hirer
RIGHT
of HIRER
2. Right to a copy of Statement of
current position
Sect 9 HP 1967
3. Right to appropriation of payment
made in HP agreement
Sect 10 HP 1967
4. Right to apply from court-to get an order to remove the goods
Sect 11 HP 1967
1. Right to a copy of agreement
Sect 5 HP 1967
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I
Statutory Rights & Duties of Hirer
5. Right to assign Hirer’s right which stated
in HP agreement Sect 12 HP 1967
6. Right by Operation of Law Sect 13
HP 1967 (personal-death & company-winding up)
7. Right to early completion of the
agreement
Sect 14 HP 1967
8. Right to terminate the agreement
Sect 15 HP 1967
RIGHT
of HIRER
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Statutory Duties & Obligation of Hirer
DUTIES
of HIRER
1. Duty to continue payment
eventhough the goods hired destroy
Ka Yim Credit & Leasing Sdn Bhd vs Pang Kim Cha
2. Duty to inform Owner the position of the
goods
Sect 37 HP 1967
3. Fraudulant Sale or Disposal of
goods by the Hirer
Sect 38 HP 1967 -alizah ali-
Right Of Owner In Repossession
» default 4 successive installment Sect 16(1) HPA 1967
RIGHT TO REPOSSESSION
Hirer defaulted to pay 2 successive
installment, or
Hirer defaulted to pay the last installment
Death Hirer
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Right Of Owner In Repossession
1
can repossess after 21 days from the date of service of 4th Schedule notice.
procedure
Before
Sect 16 HPA 1967 / 4th Schedule
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Pang Brothers Motors Sdn Bhd vs Lee Aik Seng
19 days
United Manufacturers Sdn Bhd vs Sulaiman Ahmad
repossess after 2 years from the date of the service of 4th Shcedule Notice
Right Of Owner In Repossession procedure
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Right Of Owner In Repossession
to serve 4the Schedule Notice
Section 16(2) of HPA 1967
procedure
Exemption
if the owner can prove that there is a possibility
that the Hirer would conceal or remove the goods from the owner
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Right Of Owner In Repossession
Required the owner/dealer to comply with regulation as regard to the manner to repossess the goods
if own- show ic/business card
if show ic/authority card
During
procedure
Sect 16(7) HPA 1967
HP (Recovery of Possession And Maintenance of Records by Owners) Regulations 1976
owner dealer
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Cont…
Can enter into Hirer’s Premise – proper & lawful manner
Failure to comply offence Regulation 9
Dealer commit offence owner is deemed guilty unless ..
Right Of Owner In Repossession procedure
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Right Of Owner In Repossession
Immediately Owner shall deliver to the hirer a document of acknowledge receipt of the
goods
Sect 16 (5) of HPA 1967 – contain of document
procedure
After
1. Sect 16(4) HPA 1967
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Right Of Owner In Repossession
Within 21 days of the repossession – owner serve 5th Schedule
procedure
After
2. Sect 16(3)n HPA 1967
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Right Of Owner In Repossession procedure
5th Schedule
require the owner to redeliver the goods to him
+ arear of installment
+ installment due
+ interest due
+ cost of repossession
+cost of storage
+ cost for redelivery
Complete the agreement by paying the balance due under the agreement + cost repossess
option
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Right Of Owner In Repossession procedure
5th Schedule
Take the goods
option
DO NOT take the goods
Pay installment due
Cost incidental to
repossession
√
Pay full payment
Cost incidental to
repossession
X
Cost delivery
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Cont…
Right Of Owner In Repossession procedure
If x 5th Schedule
owner will lose his right under HP agreement and x entitle to
get remedy
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Cont…
after receive 4th Schedule Notice, the Hirer is surrender the
goods to the owner, owner shall not impose payment
for..
Right Of Owner In Repossession procedure
a) cost of repossession
b) cost incidental to repossession
a) cost of storage
3. Sect 16A HPA 1967
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Cont…
After repossession, owner shall not sell/dispose the goods without written consent from the Hirer.
Right Of Owner In Repossession procedure
4. Sect 17 HPA 1967
If dispose without consent
he shall be guilty under Section 17(2)
HPA 1967
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Right of Hirer After Repossession
hirer
Take
th
e go
od
s
Reject th
e goo
ds 5th
schedule (option)
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Right of Hirer After Repossession
Require the owner to redeliver the goods to the hirer
i this can be made within 21 days after the service of 5th
Schedule Notice.
ii this can be made via written application to reinstate the
agreement
1. Take the goods
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Right of Hirer After Repossession
iii Hirer has to pay;
1) arear of installment + interest – Sect 9(1)(a)HPA
2) remedy for breach of agreement – Sect 19(1)(b)HPA
3) cost incidental to repossession – Sect 19(c) HPA
4) cost of redelivery – Sect 19(c) HPA
Take the goods
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Right of Hirer After Repossession Reject the goods and require the owner to sell the
goods to any person introduced by the hirer who is prepare to buy the goods for cash.
Sect 18(4) HPA 1967 Sect 18(4)(a) HPA 1967 Sect 18(4)(b) HPA 1967 Owner serve a notice to the hirer Owner give hirer an option Not less than 14 days b4 the date to buy the goods at the price Of auction which he intends to sell
2. Reject the goods
Public auction Private auction
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