HIRE PURCHASE
DEFINITION
S.2 HPA:
1. Hire purchase agreement
2. Hirer
3. Owner
4. Goods
5. Guarantor
EXAMPLE:
Sarah wants to buy a car through a hire-purchase agreement.
1. Owner: The finance company (XYZ Finance Ltd.) owns the car and offers it under a
hire-purchase agreement. (YANG BAGI LOAN)
2. Hirer: Sarah, the customer, wants to hire and eventually own the car. (PEMINJAM)
3. Dealer: The car dealership (ABC Motors) acts as the dealer. They negotiate the terms
with Sarah, arrange the hire-purchase agreement, and connect her with XYZ
Finance Ltd. (YANG JUAL KERETA)
In this case, the dealer (ABC Motors) facilitates the process but is not the hirer, the owner,
or an employee of the owner. Their role is to arrange the hire-purchase agreement on
behalf of XYZ Finance Ltd.
Hire purchase agreement
- A "hire-purchase agreement" is a type of contract where someone rents goods with
the option to buy them later, or agrees to buy goods in installments. However, it
does not include agreements where:
1. Ownership of the goods is transferred immediately or before delivery.
, 2. The person renting or buying the goods is a business that sells similar goods
as part of their trade.
1. Credit Corporation Sdn Bhd v The Malaysian Industrial Finance Corporation
- The plaintiffs purchased a car under a hire purchase agreement and
registered it in the hirer's name, noting their ownership claim. The first
defendant later bought the car from a third party and entered into a hire
purchase agreement with the second defendant. After terminating the hire,
the plaintiffs repossessed the car and sought a declaration of ownership,
while the defendants counterclaim for trespass, conversion, wrongful
detention, and damages.
- HELD: The court ruled that under the hire purchase agreement, the hirer did
not own the car until all payments and obligations were fulfilled. Although
the hirer was registered as the car's owner, this only indicated possession
and use, not legal ownership. Consequently, the court declared the plaintiffs
as the rightful owners and dismissed the defendants' claims for trespass,
conversion, and wrongful detention.
FORMALITIES/FORMATION OF HP AGREEMENT
DEFINITION
S.2 HPA:
1. Hire purchase agreement
2. Hirer
3. Owner
4. Goods
5. Guarantor
EXAMPLE:
Sarah wants to buy a car through a hire-purchase agreement.
1. Owner: The finance company (XYZ Finance Ltd.) owns the car and offers it under a
hire-purchase agreement. (YANG BAGI LOAN)
2. Hirer: Sarah, the customer, wants to hire and eventually own the car. (PEMINJAM)
3. Dealer: The car dealership (ABC Motors) acts as the dealer. They negotiate the terms
with Sarah, arrange the hire-purchase agreement, and connect her with XYZ
Finance Ltd. (YANG JUAL KERETA)
In this case, the dealer (ABC Motors) facilitates the process but is not the hirer, the owner,
or an employee of the owner. Their role is to arrange the hire-purchase agreement on
behalf of XYZ Finance Ltd.
Hire purchase agreement
- A "hire-purchase agreement" is a type of contract where someone rents goods with
the option to buy them later, or agrees to buy goods in installments. However, it
does not include agreements where:
1. Ownership of the goods is transferred immediately or before delivery.
, 2. The person renting or buying the goods is a business that sells similar goods
as part of their trade.
1. Credit Corporation Sdn Bhd v The Malaysian Industrial Finance Corporation
- The plaintiffs purchased a car under a hire purchase agreement and
registered it in the hirer's name, noting their ownership claim. The first
defendant later bought the car from a third party and entered into a hire
purchase agreement with the second defendant. After terminating the hire,
the plaintiffs repossessed the car and sought a declaration of ownership,
while the defendants counterclaim for trespass, conversion, wrongful
detention, and damages.
- HELD: The court ruled that under the hire purchase agreement, the hirer did
not own the car until all payments and obligations were fulfilled. Although
the hirer was registered as the car's owner, this only indicated possession
and use, not legal ownership. Consequently, the court declared the plaintiffs
as the rightful owners and dismissed the defendants' claims for trespass,
conversion, and wrongful detention.
FORMALITIES/FORMATION OF HP AGREEMENT
