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Report No. 168

Part II

Conclusions and Recommendations

2.7. Section 2(c): definition of the "hire-purchase agreement".-

The Federation has urged that this definition be substituted altogether. The reason given for this change is contained in their letter dated 24th August, 1998 accompanying the revised set of objections. It has been submitted that the hire-purchase transaction is one where "the goods (purchased at the request of the hirer) are delivered on hire with an option to purchase (and not an advance made on the security of goods, as is presumed so far, which is clearly indicated in the text of the present Act)". The said submission, in the opinion of the Law Commission, is based upon an incomplete reading of the definition.

The definition as suggested herewith, which is fully recast by the Law Commission, also takes in the type of transactions referred to by the Federation. The objection urged is thus devoid of substance. In its objections submitted earlier along with their letter dated 13th July, 1998, it had suggested addition of the words "together with such incidental charges and expenses as may be payable" in the definition. The Federation wanted the said words to be added at the end of clause (ii) in the definition. In the opinion of the Law Commission, this suggestion is unnecessary and irrelevant in the light of the definition now suggested by it. The definition of "hire-purchase agreement" shall now read as follows:-

"(c) "hire-purchase agreement" means

(i) an agreement under which goods are let on hire and under which the hirer has an option to purchase them in accordance with the terms of the agreement, and

(ii) an agreement for the sale of goods under which the purchase price or part of it is payable in instalments, and the property in the goods is to remain in the owner (notwithstanding that the hirer is to be in possession of the goods) until such conditions as to the payment of instalments or otherwise, as may be specified in the agreement, are fulfilled."

In the light of this definition, the definition of the expression "owner" also requires to be modified slightly, though no such modification is required with definition of the expression "hirer". The definition of the expression "owner" shall read as follows:-

"(f) "owner" means the person who lets or has let, or the person who delivers or has delivered possession of goods, to a hirer under a hire-purchase agreement and includes a person to whom the owner's property in the goods or any of the rights or liabilities under the agreement has passed by assignment or by operation of law."

The Hire-Purchase Act, 1972 Back

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