Hire Purchase and the Implied obligations of the Owner and Outright Obligations of the Hirer

       

    

Obligations of the Owner

The implied terms have been described as warranty and condition. They bear the same meaning ascribed to them under the Sale of Goods Act. Distinction is however provided in the definition under Section 20(1) where –warranty is defined as a non-essential term, the breach of which entitles the hirerto sue for damages only. Condition is not given a statutory definition

– but by implication, the difference lies in the breach – the hirer is entitled to reject the goods and treat the contract as repudiated.

1. Delivery of the Goods: It is the duty of the owner to deliver the goods to the hirer when due. The goods must also be delivered in good condition.
2. Title: Before goods can successfully be assigned to a contract for hire purchase, the owner must have a title to the goods.
3. Description of the Goods: The owner of the goods must ensure that the goods are delivered according to the buyer’s description. Also, the goods must fit their description.

Fitness and Quality of the Goods: The goods must be of merchantable quality and they must fit the purpose for which they were hired. However, if there is any defect in the property, it should be something that the owner can easily discern. For example, in the case of Anoka vs. SCOA Warri (1955/56) WNLR  the hirer returned a vehicle due to defect in its engine. The court held that the implied term of fitness for purpose would not be applicable here due to the fact that the defect was something which the owner couldn’t easily discern. He couldn’t have ordinarily known of a fault in the engine unless he took the engine apart.

4. Quiet Possession: The hirer has a right to quiet possession of the goods. The owner is obligated to abstain from unnecessarily disturbing the buyer.
5. Furnishing Information: There is a general obligation on both parties to always furnish information regarding the hire purchase contract. This information includes things like arrears paid, date of payment, balance remaining etc.

Obligations of the Hirer

1. Acceptance of Delivery: It is an obligation on the hirer to accept the goods when they are delivered by the owner. If doesn’t he can be sued for non-acceptance.
2. Duty of care: The hirer has a duty to use the goods in ways that would not occasion damage to the goods.

Payment of installments: This is one of the main functions of the hirer. He has to pay installments for the hirer purchase as and when due. There are a plethora of cases to help support this assertion. In the case of Animashawun vs. CFAO (1960) LLR 113 the hirer defaulted in payment and the owner repossessed the goods. The court held that since the hirer had failed to pay his installments at the required time, the owner had the right to repossess the goods.

3. Redelivery of the Goods: If the hirer purchase agreement falls through, it is the duty of the hirer to redeliver the goods to the owner.
4. Duty not to sell the Goods: The hirer has a duty not to sell the goods until the last installment has been paid.
5. Duty not to act Inconsistent to Owner’s Right: The hirer also has a duty not to act in relation with the goods in a manner that is inconsistent with the right of the owner. He can only do this when the goods have been completely purchased.

          6.   Hirer’s right of termination: The hirer’s right of termination is set out in section 8 of the Act. it provides that a hirer  shall,  at any time, before the final payment under a hire-purchase agreement, be entitled to determine the agreement by giving notice of termination in writing to any person entitled or authorized to recover any sum payable under the agreement.

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