Thus, in 1965, the hire purchase act was passed into law to regulate contracts of hire purchase in nigeria. The subject matter of this hire purchase agreement is tricycle with registration no. Hirepurchase act 1974 nrcd 292 section 1enforcement conditional. From the late twentieth century, equipment leasing practices became a viable financial vehicle for stimulating a countrys trade, commerce and industry. The seller in the hire purchase agreement who sell the goods on the hire basis.
Hire puchase system is a special system of purchase and sale of goods. This hirepurchase agreements which relating to other goods are governed by common law. In nigeria, the common law rules in relation to hire purchase were in operation. The introduction of a third party the finance company complicates the transaction further because in a conventional contract of sale, the seller will be liable to the buyer if the representation.
Arrangement of sections part i 2004 laws of nigeria. This paper is an expose on the legislation regulating hire purchase transactions in nigeria. This kind of business is very popular in africa most especially nigeria. Under this system purchaser pays the price of the goods in instalments. The terms used in the agreement of hire purchase are. Car financing in nigeria everything you need for car hire purchase in nigeria 3. Repossession of goods the subjectmatter of hire purchase agreement is an important remedy available to the owner in hire purchase transactions under the hire purchase act, cap. The elements of a hire purchase contract law teacher.
Credit sale distinction between credit sales agreement and hire purchase. A hire purchase agreement is a legal document which includes clauses stating the terms and conditions between the parties. Apr 03, 2016 the learned steve shim j in that case stated that at common law, hire purchase agreement is regarded as a form of contract whereby the owner lets goods out on hire and agrees that the hirer may either return the goods and terminate the contract or elect to buy the goods on the completion of the required periodic payments. Agreement for hirepurchase of a car through a finance. Under this method of financing, the purchase price is paid in installments. This hire purchase agreements which relating to other goods are governed by common law. May 27, 2016 in nigeria, the common law rules in relation to hire purchase were in operation. Thus, unless otherwise indicated, all sections of the moneylenders law cited shall be. The hire purchase act is like a referee who ensuresthat both sides obey the rules in this case, the seller and the buyer or consumer. The latter seeks to regulate the agreement between the hire purchase company and the motor vehicle purchases. Under the common law, hire purchase was defined as an agreement for the. It implies that the goods are sold for payment that is to be done in future period of time. The history of hire purchase law in nigeria dates back to 1965 when the hire purchase act.
The agreement must fulfil legal requirements of the indian contract act 1972 and the sale of goods act 1930, as the case may be. Ebonyi akl 336 qd free from any and or all encumbrance or adverse claim from a third party. To avoid cumbersome cross references, we shall adopt the moneylenders law, cap. The nature of hire purchase transactions and their benefits to the parties in particular and the economy in general were highlighted. In a credit sale agreement for the purchase of a vehicle, the buyer, i. Sale of goods and hire purchase law in nigeria book. This hire purchase agreement is made on 5 th day of september, 201 between mr. An act to amend the law relating to hirepurchase and creditsale, and, in relation thereto, to amend the enactments relating to the sale of goods. Yemisi was formerly law librarian at the adeola odutola law library, university of ibadan, ibadan nigeria and principal librarian at the nigerian law school, lagos campus, nigeria. Initial payment made at the time of signing the hire purchase agreement. The nature of hirepurchase transactions and their benefits to the parties in particular and the economy in general were highlighted. Hire purchase agreement format download free legal document. Hire purchase in commercial law is an agreement where the owner can permit a person, or the hirer, to hire goods from him or her for a certain period of time. Although nigeria is independent, the english legal system has a huge role to play.
However, there can be a difference between the two. Other analogous practices are described as closedend leasing or rent to own. Hire purchase agreement format download free legal. Suggested citation ofo, nat, rethinking the law on the recovery of goods in hire purchase transactions in nigeria january 25, 20. The law of hire purchase in nigeria the jet lawyer. A delivery of personal property by one person the bailor to another the bailee who holds the property for a certain purpose a contract of hire purchase also has this element. And whereas the owner has acquired the said car from the dealer for the abovementioned purpose and in consideration of the above, the dealer has agreed to guarantee the payment of the hire by the hirer in accordance with the terms of hire purchase agreement. The plaintiff made the initial payment of n22, 000. Hire purchase by ca cma santosh kumarfree download pdf. Moreover, in section 12 of the hirepurchase act 1967 revised 1978 states, this act shall apply throughout malaysia and in respect only of hirepurchase agreements relating to. Under this system the goods are delivered to the purchaser at the time of agreement before the payment of instalments but.
In respect of hire purchase arrangements with interest based on monthly rests only. Hire purchase act 1967 revised 1978 hire purchase 1 laws of malaysia reprint act 212 hire purchase act 1967 incorporating all amendments up to 1 january 2006 published by the commissioner of law revision, malaysia under the authority of the revision of laws act 1968 in collaboration with percetakan nasional malaysia bhd 2006 2. The institute of chartered accountants of nigeria ican was established by act of parliament no. Principles of business law contents study unit title page syllabus i 1 nature and sources of law 1 nature of law 3 historical origins 6 sources of law 9 the european community and uk law. Standard terms and conditions governing hire purchase agreements. The law says that the sellers bailiff who is recovering possession of goods must bring with him a copy of the notice of repossession. Rethinking the law on the recovery of goods in hirepurchase. If the hirer shall duly observe and performs all the conditions herein contained and on his part to be observed and performed and shall pay to the owner the sum specified in clause 3 hereof, together with all other sums if any payable by him to the owner under the provisions of this agreement, then the hiring shall come to an end and the said vehicle shall become the property of the hirer. An overview 2 common law, equity and statute law 23 custom 25 case law 26 nature of equity 32 application of principles of equity 34. Also, if you look at the law courts, the english common law has a large influence. With some installment plans, the buyer gets the ownership rights as soon as the contract is. Hirepurchase 7 laws of malaysia act 212 hirepurchase act 1967 an act to regulate the form and contents of hirepurchase agreements and the rights and duties of parties to such agreements.
Hire purchase agreement according to master hals bury, is a contract of hire with an option of the hirer to purchase the subjectmatter of the agreement after offsetting the entire cost of the goods in a number of agreed installments. The right of the owner to recover possession of the hired. Other analogous practices are described as closedend leasing or rent to own the hire purchase agreement was developed in the. Raimi senior lecturer, faculty of law obafemi awolowo university, ileife nigeria. At the time of enactment, the act applied only to the federal capital. M7, laws of cross river state of nigeria, 2004 as our reference point. Nov 08, 2016 hire purchase agreement is not left out of this predicament. The owner is in true and lawful possession of the said tricycle with registration no. Hire purchase in nigeria other than merely existing on paper, no official action seems to exist outside of the hire purchase act of 1965 and the hire purchase amendment act 1970.
Jun 15, 2016 a hire purchase agreement has three basic features. Such a loan given to customers is the commercial hire purchase also known as corporate hire purchase. Hire purchase is governed by hire purchase act in 1972. Hire purchase and credit sale transactions are regulated by the hire purchase act 1965 18. B 1501968 part i preliminary short title and application 1. A hire purchase hp, known as installment plan is an arrangement whereby a customer agrees to a contract to acquire an asset by paying an initial installment e. Free hire purchase agreement form educational gist no comments hire purchase agreement. Her areas of research include law librarianship, legal research methods and information technology and law. Hire purchase and leasing types of finance business. It pertinent to note that the obligation of the buyer and that of the owner are concurrent obligations and that must be done in line with each. This paper is an expose on the legislation regulating hirepurchase transactions in nigeria. These rules evidently worked a lot of hardships on parties, especially the hirer of goods. Bankers not to issue bank notes in nigeria other than those of central bank of nigeria.
Malaysia commercial law hire purchase act duration. Hire purchase by ca cma santosh kumarfree download pdf duration. Hire purchase hp or leasing is a type of asset finance that allow firms or individuals to possess and control an asset during an agreed term, while paying rent or instalments covering depreciation of the asset, and interest to cover capital cost. The term hire purchase originated in the united kingdom and is. Find addresses, telephones, contacts and locations. List of hire purchases companies based in lagos nigeria. A hire purchase business is typically a kind of loan business used to purchase large item usually a car or motorcycle. Moreover, in section 12 of the hire purchase act 1967 revised 1978 states, this act shall apply throughout malaysia and in respect only of hire purchase agreements relating to the goods specified in the first schedule. The case of the defendant is that the plaintiff took on hire a toyota liteace bus vehicle under a hire purchase agreement executed in june 1992.
May 23, 2016 hire purchase by ca cma santosh kumarfree download pdf duration. Ownership of the asset is transferred after the payment of the last installment. With hire purchase, the company or entrepreneur does not need to do any physical labor to generate money from the asset. This paper seek to analyse the impact of the hire purchase act 1965 on consumer credit and further advocate for an omnibus legal framework for consumer credit in nigeria. Whereby it is agreed between the parties as follows. If the hirer shall duly observe and performs all the conditions herein. Features of a hire purchase agreement the jet lawyer.
Standard terms and conditions governing hire purchase. Agreement for hirepurchase of a motor vehicle created date. Pdf the impact of hire purchase act 1965 on consumer credit. Repossession of hirepurchase goods in nigeria under the hire. Hire purchase loans can be obtained from designated or specialized financial institutions in nigeria. Sometimes with the dealer acting as the agent of the owner.
A hire purchase agreement is a legal document which includes clauses stating. The term hire purchase originated in the united kingdom and is similar to renttoown. The hirer has an option to buy the goods at the end of the agreement if all installments are being paid. Each hire purchase agreement is a separate agreement between you and us. This paper seeks to analyse the concept of hire purchase, its origin and evolution in nigeria as well as examine unfair terms embedded in a hire purchase agreement with the view of highlighting matters arising there from and proffering solutions to it.
Hire purchase act, hire purchase transaction, hire purchase agreement, recovery of hire purchase goods, repossession suggested citation. A bailment has been defined by the blacks law dictionary 9 th edition as. It is submitted that inspite of the existence of the hirepurchase act, common law. The buyer in the hire purchase agreement who purchases the goods on hire basis. The instalments may be annual, six monthly, quarterly, monthly fortnightly etc. But until the making of the last payment, the hirer cannot assume any legal ownership of the said property. Introduction hire purchase trading system is one of the commonest methods by which traders, dealers and manufacturers.
Upon the recompilation of extant federal legislations into the laws of the federation of nigeria 2004, the then hire purchase act, as amended, became the hire purchase act, cap. In countries like nigeria however, save for the hire purchase act as amended, which only regulated hire purchase practices, and the general common law implied terms of contract to hire purchase or equipment leasing. The right of the owner to recover possession of the hired goods. An act to amend the law relating to hire purchase and creditsale, and, in relation thereto, to amend the enactments relating to the sale of goods. Hire purchase agreements are agreements whereby an owner of goods allows a person, the hirer, to hire goods from him for a period of time by paying installments. Legal alert august 2016 equipment leasing laws and. Hire purchase is a method of financing of the fixed asset to be purchased on future date.