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Report No. 20

Clause 4

Sub-clause (1).-As already explained,1 the provisions relating to contents have been separated from those relating to form, and have been placed in this clause.

The clause, in substance, follows the English Act, but an attempt has been made to make it simpler by dividing the requirements into items (a), (b), etc.

It is considered that the agreement should state particulars regarding the person to whom the instalments are payable, the number of instalments etc. and the date on which the hiring should be deemed to have commenced. Further, as regards the "cash price" it is considered that the agreement should, as cash price, state the market value of the goods on the date of the agreement.

The reason is, that where the person who lets out the goods is not the owner but only a financier, it would not be appropriate to speak of the price at which the goods "may be purchased" by the hirer, because the financier would not always be in a position himself to sell the goods to the hirer at that stage. The only object behind requiring a statement of the cash price is simply to have a rough idea of the market price, so that the difference between the hire-purchase price and the cash price can be ascertained, and the profit made by the owner gauged. This object would continue to be achieved by the words proposed to be used.

Sub-clause (2).-Where the consideration is in the form of kind, it would be useful to mention it in the hire-purchase agreement. Hence this provision.

Sub-clause (3).-Where the owner does not state in the hire-purchase agreement the particulars required to be stated by this clause, it would suffice if the hirer is given an option to avoid the agreement through Court. Section 2(2), opening lines, of the English Act, in such circumstances, provides that the owner shall not be entitled to enforce the hire-purchase agreement or any contract of guarantee or any right to recover the goods from the hirer etc. (There is a proviso allowing the Court to dispense with a particular requirement). It is considered that this goes too far, and may work hardship on the owner in a large number of cases. To make the agreement completely unenforceable and even to bar the right to recover the goods from the hirer appear to be sanctions which are rather harsh for a provision relating to contents of an agreement. The hirer can go to Court, and the Court can give relief according to the justice of the case.

1. See notes to clause 3.

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