Hire-purchase CASES
In English law, hire-purchase is a financial arrangement enabling a person or business to acquire goods by initially hiring them, with an option to purchase upon completing agreed instalment payments.
Definition and Principles
Under hire-purchase agreements, ownership remains with the seller or finance provider until the buyer pays all instalments. The buyer usually gains immediate use and eventual ownership after full payment.
Key Features
- Instalment Payments: Goods paid for in regular, agreed payments.
- Ownership Transfer: Title passes to the buyer only after final payment.
- Right to Terminate: Option to return goods and terminate the agreement under specific conditions.
Legal Protection
The Consumer Credit Act and other legislation protect consumers in hire-purchase agreements, ensuring transparency, fairness, and defined rights and obligations.
Practical Importance
Understanding hire-purchase helps consumers and businesses effectively manage finances and obligations, providing a structured approach to asset acquisition.
Home » Hire-purchase
A hirer's late payment under a hire-purchase agreement, where a clause made timely payment 'of the essence', was held to be a repudiatory breach. This entitled the owner to terminate the contract and claim damages for the loss of the entire bargain. Facts The plaintiffs, Lombard North Central Plc, let a computer and equipment to the defendant, Mr Butterworth, under a hire-purchase agreement dated 26th July 1984. The agreement required an initial payment followed by 19 monthly instalments. Clause 2(a) of the agreement explicitly stated: ‘the hirer shall pay punctually the rentals… time of payment of each and every sum
A man agreed to buy a car via hire-purchase after inspecting a good model. The car delivered was a useless wreck. He refused to pay and the seller sued, relying on an exemption clause. The court held the breach was so fundamental that the exemption clause did not apply. Facts The defendant, Mr Wallis, inspected a Buick motor car in excellent condition and agreed to obtain it on hire-purchase terms from a finance company, Mutual Finance Ltd. The original owner, a Mr Stinton, arranged the sale to the finance company. The hire-purchase agreement contained an exemption clause stating: ‘No condition
A customer signed a hire-purchase offer for a car, but returned it to the dealer before the finance company accepted. The car was then stolen and damaged. The court held no contract existed as the offer was revoked or, alternatively, was subject to an implied condition that the car remain in the same state. Facts On 16th March 1961, the defendant, Mr Stimson, wished to acquire a car on hire-purchase terms. He saw the car at the premises of a dealer, Stanmore Motor Co. He signed a hire-purchase agreement form provided by the dealer. This form, which was an agreement
