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Report No. 20

Clause 24

The problem of successive hire-purchase agreements entered into by the same hirer with the same owner has been dealt with here. It happens often that goods X are hired under one agreement, and subsequently, while hiring goods Z from the same owner, the hirer is made to agree to a term under which goods X will also be subject to the obligations created by the subsequent agreement. This may sometimes affect prejudicially any right which the hirer would otherwise acquire on payment of a certain proportion.1 The clause provides that any such modification of the rights, etc. of the hirer under the first agreement would not be effective.

The present clause deals generally with successive agreements. The specific question of appropriation of payments has been dealt with in a separate clause.2

It may be noted that the clause as drafted is different from section 15 of the (English) Hire-Purchase Act, 1938, on the following points:-

(i) Under the English Act, the protection operates only if one-third of the hire-purchase price has already been paid and thereafter, the further agreement is made. Under the clause under discussion, on the other hand, this condition is not necessary. The clause under discussion will, therefore, operate irrespective of the point of time when the subsequent agreement is made.

(ii) The English Act, in relation to the further hire-purchase agreement, uses the words "comprising those goods." Under the clause under discussion, the subsequent hire-purchase agreement has been described as "relating to other goods", since usually it is in the guise of an agreement covering other goods (whether alongwith the original goods or otherwise) that attempts are made to prejudice the rights of the hirer.

(iii) In the English Act, the words used are "the provisions of section shall have effect in relation to that further agreement as from the commencement thereof". The clause under discussion is more clear, by specifically providing that any right which the hirer would otherwise have had will not be prejudiced by the further agreement.

1. See clause 18.

2. See clause 10.

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