CLO3 IDENTIFY CLEARLY THE PRINCIPLES OF CONSUMER PROTECTION SUCH AS HIRE PURCHASE INTRODUCTION
DEFINITION STATUTE HIRE PURCHASE ACT 1967 (HPA 1967)
S.2(1) Contract of hire purchase may include:
A contract of letting goods with an option to purchase; or A contract for the purchase of goods by instalments. INTRODUCTION Property in goods is not transferred to the hirer at the time when the contract is made The hirer only obtains possession over the goods but not the ownership Ownership remain with the owner until full payment of the installments by the hirer and the hirer chooses to purchases the goods. CREDIT CORP (M) BHD v THE MALAYSIAN INDUSTRIAL FINANCE CORP & ANOR Court held: until the hirer had exercised his option to purchased agreement, no property in the car passed to the hirer INTRODUCTION DEFINITION S.2(1)
OWNER person who lets or has let goods to a
hirer under a hire purchase agreement HIRER person who takes or has taken goods from an owner under a hire-purchase agreement PRICE total sum payable by the hirer under HP agreement (incl. deposit, monthly installments & monthly interest) GOODS - Limited specified in 1st schedule (all consumer goods, motor vehicles) FORMATION OF AGREEMENT A. GIVING NOTICES OF THE 2ND SCHEDULE BEFORE ENTERING HPA
Owner must serve a notice duly completed
on intending hirer and signed by the owner according with the form set out in Part 1 of 2nd schedule s.4(1)(a) If the HPA is carried out by dealer dealer must serve a notice duly completed on intending hirer and signed by the owner according with the form set out in Part 1 of 2nd schedule s.4(1)(b)(i) FORMATION OF AGREEMENT
PART 1 2ND SCHEDULE SHORT DESCRIPTION OF
THE GOODS COMPRISED IN THE HPA & SUMMARY OF THE FINANCIAL OBLIGATIONS After notices serve, dealer must serve another notice duly completed & signed both by dealer & prospective owner Part II 2nd Schedule s.4(1) (b)(ii) FORMATION OF AGREEMENT
Methods of service s.4(2)
i. owner/ dealer must give notice personally to the intending hirer, and ii. Upon receiving notice, intending hirer must acknowledge receipt by signing at the appropriate column contained in the notice FORMATION OF AGREEMENT Upon receiving notice, intending hirer is not under any obligation to enter into any HPA with the owner/dealer s.4(3) Shall not also be required to pay or give any consideration to the owner/dealer for the preparation or service such notice. If so, the person who imposed such obligation shall be guilty of an offence under HPA 1967 s.4(6) FORMATION OF AGREEMENT If HPA is made without serving the notice, the agreement shall be void s.4(4) AFFIN CREDIT (M) SB v YAP YUEN FUI
Held: An offer to enter into HPA is subjected to
a condition precedent imposed by s.4(1). Failure to give a written statement under the 2nd schedule shall render the contract void. Owner/dealer who did not serve the notices, shall be guilty for an offence under HPA 1967 s.4(5) FORMATION OF AGREEMENT
b. THE AGREEMENT MUST BE IN WRITING s.4A
S.4A(1) A hire purchase agreement must be in writing S.4A(2) otherwise, the agreement shall be void S.4A(3) - Owner who does not comply this formality shall be guilty for an offence under the HPA 1967 Penalty s.46 Fine <RM3000 or imprisonment <6 months or both FORMATION OF AGREEMENT c. THE AGREEMENT MUST BE SIGNED s.4B Every HPA must be signed by all parties to the agreement s.4B(1) Agreement only can be signed by hirer when the agreement (forms or document relating to agreement) has been duly completed. Signing blank forms by the hirer shall be invalid s.4B(2) Owner/dealer who does not comply this formality shall be guilty for an offence under HPA 1967 s.4B(4) Penalty s.46 FORMATION OF AGREEMENT d. CONTENTS OF THE HIRE PURCHASE AGREEMENT (HPA) S.4C a valid HPA must contain some particulars that are required s.4C Specified s.4C(1)(a) : i. Date of the agreement ii. Number of installment to be paid iii. Amounts of each installments, to whom & where it is tp be paid iv. Time for payment v. Description of the goods, and vi.The address where the goods are placed FORMATION OF AGREEMENT The agreement shall also set out in a tabular form s.4(1)(c): i. The cash price ii. The deposit paid iii.The expenses of delivering the goods freight iv.The vehicle registration fees (in respect of vehicle) v. The insurance amount vi.The terms charges vii.The annual percentage rate for terms charges viii.The balance originally payable, and ix.The total amount payable FORMATION OF AGREEMENT
If the HPA does not contain all the particulars,
the agreement shall be void s.4C(2) The owner of the goods who did not comply this requirement shall be guilty of an offence under HPA 1967 s.4C(3) Penalty s46 FORMATION OF AGREEMENT e. SEPARATE AGREEMENT FOR EVERY ITEMS OF GOODS S.4D If there is more than 1 item of goods being hired at one time from the same owner, there must be separate HPA for every item of the goods s.4D(1) If this formality is not complied with, the HPA shall be void s.4D(2) The owner will be guilty for an offence under HPA 1967 s.4D(3) Penalty s.46 FORMATION OF AGREEMENT f. COPY OF THE AGREEMENT MUST BE SERVED ON THE HIRER S.5 Within 14 days after making of the HPA, the owner shall serve on the hirer and the guarantors a copy of the agreement each. - S.5(1) If owner failed to comply, HPA would be unenforceable by the owner s.5(1A) If the total amount payable under HPA consists of payment for insurance, the owner shall serve a copy of the insurance payment receipt and within 7 days after receiving the policy from the insurance company, a copy of the insurance policy must be served by the owner to the hirer s.5(3) IMPLIED TERMS UNDER HPA 1967