HIRE PURCHASE

AGREEMENT
BY JUSTICE FRANCIS OBIRI
 HIRE PRUCHASE AGREEMENT

• The sale of goods Act of 1962 was regulating hire purchase and
conditional sale agreement until 1974 when the hire purchase degree
NRCD 292 started its operation.
• Section 20(2) states a hire purchase is an agreement for bailment of
the goods under which the Bailee may buy the goods or under which
the property in the goods may passed to the bailment means given
the possession of the goods to another person without giving him to
the ownership.
• Buying goods on hire purchase agreement is legally to hire the goods
until certain time when an option can be exercise to take over the
legal item to the goods.
• Hire purchase agreement involved three stages;
• 1. The bailment of the goods. That is transferring the possessions
without ownership.
• 2. The hiring, paying for the services of the goods.
• 3. A sale taking the legal title of the goods.
 CONDITIONAL SALE AGREEMENT

• Section 24(1) of the decree NRCD 292 states a conditional sale

agreement is a contract for sale of goods under which the whole part
of the purchase price is to be paid by installments and the property in
the goods remains with the owner until the specific time in the
agreement such as payment has been fulfilled by the buyer.
• This is the sale under which ownership will pass to the buyer
depending upon in his payment of the price.
• CREDIT SALE AGREEMENT
• This is an agreement for the sale under which the whole or part of the
purchase price is to be paid by installment mean while the property
may pass to the prospective buyer.
 HIRE PURCHASE, CONDITIONAL SALES AND CREDIT
SALES

• 1. The one who takes the possession of the goods under hire
purchase agreement is a mere Bailee under conditional sale
agreement a buyer in possession but under credit sale an owner
owing the previous owner.

• 2. The one in possession cannot sell under hire purchase and

conditional sales agreement but can do so under credit sale
agreement but can do so under credit sales agreement since he is the
owner.
• 3. Ownership passes to the hirer as soon as he completes the
transaction but the buyer under conditional sale upon the fulfillment
of the condition but under credit sale when goods are delivered to
the buyer.

• 4. The possessor under hire purchase and conditional sales

agreement can terminate the agreement while the buyer under credit
sale is bound to buy the goods.
• 5. Under credit sales agreement, the buyer can resell the goods when
first installment is paid but the conditional and hire purchase cannot
be re-sold.
• THE FORM AND CONTENT OF HIRE PURCHASE AND CONDITIONAL
SALE.
• The hire purchase decree lays down certain conditions be fulfill:
• 1. When first installment is paid, written and sign section one requires
that where goods are let under a hire purchase agreement or sold
under conditional sale agreement the owners or seller shall not be
entitle to enforce the agreement unless it is in writing and sign by the
hire or buyer.
• 2. Requirement before agreement- section 2 provides that before any
agreement is made the seller or owner shall state orally and in writing
to the prospective buyer or hirer price agreed and the total purchase
price.

• 3. Section 3(1) provides that any hire purchase agreement shall be the
following;
• Statement of the cash price and a hire purchase price of goods.
• 4. The amount each installment and the dateor mode to determine
the date upon which each installment is payable.
• 5. Description or list of the goods which the agreement relates is
sufficient to identify them.
• 6. Section 3(2) requires that a copy of the agreement shall be
delivered or send to the hirer or buyer within 14 days after making
the contract.
• NOTICE TO BE INCLUDED IN THE HIRE PURCHASE AGREEMENT
• A. The hirer may be put an end to the agreement either by given
notice of termination in writing to any person who is entitled to
collect or received the hire rent or in accordance with the terms of
the agreement or whichever is most favorable to you.
• B. He must pay any instalment which is in arrears at the time when he
gives the notice.
• C. If the hirer fails to take reasonable care of the goods he may be
liable to compensate the seller for any loss or damage cause by sure
failure.
• D. After half of the total amount have been paid then the hirer has
himself put an end to the agreement the owner of the goods takes
court actions or consent of the hirer if the owner of the goods applies
to the court for such an order the court may, if it thinks just to do so
or allow the hirer to keep either the whole goods on condition that he
pays the balance of the fair proportion of the goods have not the
regard to what the hirer has already been paid.
TERMINATION OF BAILEMENT
AGREEMENT
• 1. Section 5 of the decree provides that any time before the final
payment falls due the hirer or buyer has the right to return the goods
and terminate the contract on payment of half of hire purchase price.
• 2. In the case of conditional sale agreement where the property in the
goods has become vested in the buyer before final payment is made
and the buyer shall not thereafter be entitled to terminate the
agreement.
• 3. Where a buyer under conditional sale agreement terminates the
agreement, the property becomes vested to him provided he has not
transfer the goods to a third party before a final payment is made.
• 4. Termination by assignment: A buyer may at any time before
payment falls due terminate the contract by assigning the possession
on control of the goods to a third party with the consent of the seller
in this case the buyer ceases to be hirer and the assignee continues
the payment of installment of the same terms.
• However, where the hire purchase contract provides that the hirer
shall not assign, the buyer shall be guilty of misdemeanor.

• 5. Termination of a payment of the unpaid balance: At any time

before the final payment is made under the hire purchase contract,
the buyer can terminate the contract by paying the unpaid balance.