Question

There seems to be a disconnect between the law and practice with regards to hire-purchase transactions/contracts. Identify what accounts for this disconnection if any and suggest ways by which it can be remedied. (law question not less than 250 words?

Answer 1

1. Hire Purchase Agreements:- Hire Purchase Agreements are those agreements whereby a holder of goods allows a person, the hirer to hire goods from him for a period of time by giving installments. The Hirer has an option to purchase the goods at the end of contract if all installments are being paid. This is not an agreement of sale but a contract of bailment as the hirer has an option to purchase the goods. Although the hirer has the right of using those products for he is not the legal owner.

2. Disadvantages of Hire Purchase Agreements:-

a) It is usually proven to be more expensive in the long run.

b) It tempt individuals and companies to purchase goods that are beyond their means.

c) Individuals and companies cannot sell the goods or use them as security to borrow money under Hire Purchase Agreements.

3. Remedies:-

a) Approaching the right court.

b) Drafting of consumer complaint.

c) Hire Purchase Agreements should make it easy for consumers.