Question

Explain any THREE (3) implied terms which are stated in the Hire Purchase Act 1967. (10 mark)

Answer 1

As per the Hire Purchase Act 1967 following are few implied terms:

1. Owner has right to sell the goods: Prior to the inception, during and until the last instalment of the agreement is paid by the hirer, the ownership lies in the hands of the hire seller. Hence he has the right to sell the asset when there is any default in any a payment from the hirer's end. This is implied and cannot be questioned by the hirer in default.

2. The second implied term is Fitness Ie when the hire purchases places an order for the requirement from the owner, it is implied that the owner satisfies this need by delivering the goods that are potentially fit. Thus fitness of the goods delivery is an implied condition. However an exception to this condition is delivery of used Ie second hand goods. In such a case fitness have to be expressively told and make understood to the hirer by the owner before entering into the agreement.

3. Posession shall lie with the hirer: Unless there is a default from hirer, it is implied that he can enjoy the possession and use it according to the terms in the agreement.

4. Free from encumbrances: It is implied that the goods delivered under the agreement are fully owned by the owner and is not subject to any sort of mortgage, hypothecation or any other encumbrances.