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Report No. 20

Chapter III

Warranties and Conditions, and Passing of Property

6. Warranties and conditions to be implied in hire-purchase agreements.-

(1) Notwithstanding any agreement to the contrary, in every hire-purchase agreement there shall be an implied warranty-

(Compare section 8, H.P.A., 1938)

(a) that the hirer shall have and enjoy quiet possession of the goods, and

[Cf. section 14(b), I.S.G.A.]

(b) that the goods shall be free from any charge or encumbrance in favour of any third party at any time when the property is to pass;

[Cf. section 14(c), I.S.G.A.]

(2) Notwithstanding any agreement to the contrary, in every hire-purchase agreement there shall be-

(a) an implied condition on the part of the owner that he shall have a right to sell the goods at any time when the property is to pass;

[Cf. section 14(a), I.S.G.A.]

(b) an implied condition that the goods shall be of merchantable quality, but no such condition shall be implied by virtue of this clause

(i) as regards defects of which the owner could not reasonably have been aware at the time when the agreement was made, or

[Cf. section 16(2), I.S.G.A.]

(ii) where the hirer has examined the goods or a sample thereof, as regards defects which the examination ought to have revealed, or

(iii) if the goods are second-hand goods and the agreement contains a statement to that effect.

[Cf. section 16(1), and section 150, I.C.A.]

(3) Where the hirer expressly or by implication makes known the particular purpose for which the goods are required, there shall be an implied condition in every hire-purchase agreement that the goods shall be reasonably fit for such purpose.

(4) An owner shall not be entitled to rely on any provision in a hire-purchase agreement excluding or modifying the condition set out in sub-section (3) unless he proves that before the agreement was made the provision was brought to the notice of the hirer and its effect made clear to him.

(5) Nothing in this section shall prejudice the operation of any other enactment or rule of law where by any condition or warranty is to be implied in any hire-purchase agreement.



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