Hire Purchase Law

3642 Words15 Pages
INTRODUCTION. HIRE-PURCHASE LAW Hire Purchase Agreements under which Hire-purchase price does not exceed the sum of four million shillings (4,000,000/=) or such other higher or lower sum as the Minister may, after taking into account market forces from time to time prevailing, prescribe". - A person who wants to buy goods, but does not have sufficient monetary consideration as the price may enter into an agreement with the owner of goods, so that the owner may hire the goods to him with a view of finally purchasing them. In this case, the owner allows the hirer to take immediate possession and custody of the goods after which the hirer pays periodic instalments. At common law a hire purchase agreement is defined as a contract for the…show more content…
on the payment of the last instalment, the ownership transfers automatically from the owner to the hirer. REQUIREMENTS AGREEMENT. OF HIRE-PURCHASE The Hire-Purchase Act offers protection to hirer of goods by ensuring that terms of agreement are made known to him, either before or at time of making contract. The following formalities must be met for a hire-purchase agreement to be valid: Odiwuor Kelly – B.Com (Acc. & Aud. Option), L.L.B (Crim., Ban. & Ins. Option), Dip-Law (KSL) Advocate/Lecturer – 0721 438511 / 0734 438511 / 020 2242206 / http://www.oakadvocates.co.ke / odiwuork@oakadvocates.co.ke 2 1. Cash price: Before agreement is made the hirer must be shown cash price of goods i.e. the price at which the goods may be purchased by the hirer in cash. The cash price must be shown in writing. 2. Written Agreement: All Hire-purchase agreements must be made in writing and signed by the hirer in person and not by an agent1. 3. Contents: The Hire-purchase agreement must contain: - The statement of the cash price, - Hire-purchase price amounts of each instalment, - Dates when the instalments are payable, - A description of the goods sufficient to identify them, - Notice of hirer’s rights to terminate agreement and; - Restriction of owner’s right to repossess goods. 4. Copies of Agreement: Hirer must be given at least one copy of agreement which he has signed. Where he has right to terminate agreement, he must be given two copies.
Open Document