HIRE Purchase is a transaction on which goods are let on hire in an option to the hirer to purchase the

goods in the following stipulation payment

1. Is to be made in installments over a specific period of time.

2. The possession is delivered to the hire at the time of entering into a contract.

3. Each installments is treated as hire charge so that if default to made it installment the seller is to take
back the goods.

4. The hire is force to return the goods without being required to pay any further installment after
paying the installment which are rare already do.

5. Hire may become the owner of the property at anytime by paying all installment.

In essence hire purchase is the made of selling goods as well as financing price of goods. In hire purchase
the goods are rate in hire the purchase price is to be paid by installment and the hirer has option to
purchase the goods by paying the all total installment.

Parties to the hire purchase contract

A hire purchase agreement consistent of two parties these are

I. seller or owner

II.Purchaser or hire

Hirer means a person who has obtained possession of the goods from the owner thereof, under a hire
purchase agreement

Owner means a person who rates or delivery possession of goods to a hire under a hire purchase
agreement

Elements of hire purchase agreement

There are two basic elements in hire purchase agreement

A. Elements of bailment possessions of goods. Subject as to higher purchase agreement.

bailment with option to sell, a bailment is involved in delivering the goods by one person to another by
some purpose upon a contract that they shall when the purpose is complete, be returned or otherwise
disposed according to the direction of the person delivering them.

B. The element of sell which fructifros when the option to purchase is exercised by the hirer or
purchaser

FORM AND CONTENT OF HIRE PURCHASE AGREEMENT

1.Discreption and receipt of property

2. Parties to the contract.

3)The hire purchase price of goods.

4) the price of which the goods may be purchased by hirer for cash

5) The date of commencement to the agreement

6) The application and proposal of the hire purchase

7) The number of installments in which the hire purchase price will be paid, the amount of each
installment, the due date for installments, the person to whom and the place to which installment is to
be paid.

NATURE OF HIRE PURCHASE CONTRACT

The essence of hire purchase contract lies on the following distinction feature

I) Bailment of goods by the owner to the hirer

II) An agreement by which the hirer has the option to return or purchase the goods at sometime or
another. It's objective is to ensure that the property in the goods(ownership)remains in the owner, and
in such a way that the hirer will be unable to pass a goods tittle for a third party during the continuance
of the bailment.

DISTINCTION BETWEEN HIRE PURCHASE & CREDIT SALE

A contract of hire purchase must careful be distinguished from credit sell.

Credit sell is a contract for sell of goods in pursuance of an agreement under which the whole or partial
of the purchase price is payable by installment. If the property in the goods is transferred to the buyer at
the time of agreement. It's governed by the law relating to sale of goods.

Since the buyer becomes the owner of the goods he can pass a good tittle to a third party,the only
remedy for the seller being in auction for unpaid installment.

It may, however be provided in agreement for the sale of goods on credit that the property in the goods
is not to pass to the buyer until all the installment are paid. Until that time, the buyer has to a belief of
the goods and they are to remain in the ownership of the seller.
The distinction between this type of transactions and true hire purchase agreement in the fact that no
option to return or purchase of Goods therefore a supposed hire purchase agreement contains a no
defense clause whereby the hirer cannot terminate the agreement the contract.

The distinction feature of hire purchase agreement is the element of uncertainty. Whereby
implementation of a hire purchase agreement may assume any of two basic forms that is to hire or to
purchase at the option of the hirer it is therefore correctly argued that the hire purchase agreement is
too uncertain to be enforceable.

MODE OF FINANCING HIRE PURCHASE AGREEMENT

In hire purchase agreement the assets stand in the name of the seller or the finance company and
passes on the hirer on the payment of last installment. In other words under hire purchase agreement
the property in the goods passes to the hirer only on the completion of the installment.

Under the hire purchase agreement the capitalization of the assets is done in the books of the hirer and
depreciation is claimed by the hirer or the user of the assets. Normally under this kind of arrangement
the margin of 25-30% of the cost of the assets is required to be paid at the cost of the assets is required
to be paid at the time of signing the agreement.

In a hire purchase agreement, a bailee, the hirer shall not only have the charge or control of the goods,
but also he/she shall have to maintain the goods and keep them in good order.

CONDITION AND WARRANTIES

The following terms are implied in every hire purchase agreement :

a) The right to sell

There's an implied condition that the owner will have to sell the goods at the time when the property is
to pass.

b) The condition that the goods of merchantable quality, unless the goods are of second hand and the
agreement contains statements of that effect. This condition will however, not be implied if (I) The
defect complained of is the one the owner could not reasonable be aware of at the time where the
agreement was made or(ii) the hirer examined the goods or a sample thereof and the examination
reveled or ought to have revealed the defeat.under these conditions the goods are implied to be
reasonable fit for which purpose they are required. This is only so, if the hirer expressly or implied
makes known the purpose for which the goods are required

C. Legal ownership

An implied condition that the legal ownership of and the tittles to the goods automatically be vested to
the hirer upon payment by him of the hire purchase price infull.

d. Quiet Possession
 A warrant that the hire shall have and enjoy quiet possession of the goods.

e. A warrant that the goods shall be free from any charge or encumbrance in fever of third party and the
time of property is to pass , These conditions and warranty except the implied condition on fitness for
particulars purpose cannot be excluded in the agreement except that if the owner can show that before
the agreement such exclusion clause was brought to the notice of the hirer and it's effect was made
clear to him.

OTHER RIGHTS OF HIRER

1. Right to purchase with rebate, the hire has right to purchase the goods under agreement at anytime
during the continues of the agreement by giving the owner the notice of intentions to purchase the
goods. For making the purchase the hirer shall to the owner the balance of hire purchase price after
reduction of rebate, calculated in the following formula

This right of the hirer cannot be taken away by any agreement to the contrary. However, where the
agreement provides for the higher rebate.

2. Right to terminate the agreement

The hirer has the right to terminate the agreement at anytime before the final higher purchase
installment falls due .for this purpose the hire shall give to the owner a notice of his intention to
terminate the agreement. The hirer shall forthwith retain the goods to the owner and shall pay the
installment which have fallen due, but have not been paid.

3. The right to appropriate payment.

Where the hire is required to pay several hired purchase installment under two or more agreements to
the same owner and he makes the payment which is not sufficient to discharge the total amount which
is then due under all agreement he may appropriate the payment to such agreement as he likes. If the
hirer does not exercise his right of appropriate, the owner gets the right to apply the payment to the
agreement in the order of the time.

4. The right to assign and transfer the transaction.

The hirer has a right to assign his right, tittle and interest with the consent of the owner. If the owner
unreasonable withholds his consent, the hirer may make assignment without his consent. In this sense,
the owner's consent shall be deemed to be honourable withheld, if he seemed any condition therefore.

When the owner refuse to give his consent on a request by the hire, the hire may apply to the court
for a declaration that the consent has been unreasonable withheld. If the court makes such an order,
consent shall be deemed to have unreasonable been withheld.

RIGHT OF OWNER
1.Upon refusal by the hire to accept delivery. it's the duty of the hirer to accept the delivery of the
goods. If he refuse to do so the owner remedy is not to sue for the rent aggrieved, but to bring the
action for damage.

The major/ extent of damage for the failure in the estimated loss directed and naturally in the ordinary
cause of the event(refusal) from the hirer's breach of contract.

II) Owner's right to possession

It's well established as the general rule of the law of bailment that any act which is basically inconsistent
in the terms of bailment terminate the bailment and gives immediate right to possession of the property
to the owner, however this right applies only where the contract does not make any specific provision in
the contrary.

III)owner's right to determine/terminate

The owner has the right without previous notices to determine the contract and consequently to
repossess the goods. His right to repossessed is available at anytime, however if he is right to terminate
the hiring is made continent upon the notice being given or declaration being made then no right arises
until such notice or such declaration being given.

iv.Owner is right recovery by Action

In most cases where the hirer refuse permission for the owner to retake property to be more prudent
for the owner to resolt to action to recover the goods. The proper action is to detinue, The court has
the power to restitution (specifically) of the property.

Alternatively, a claim should be made for damages for conversion. The major of damage of conversion is
normal the value of the goods converted.