Question

Answer either Question 1 OR Question 2
(Answer ONE question Only.)
you must use hire purchase act.

Question 1

On 3.3.2019 Salleh visited a used car showroom as he is interested to buy a second-hand car. The salesman, Ismail, recommended to him the Proton Perdana motor car, and informed him that the car was in tip top condition. Salleh then agree to enter into hire purchase agreement with XYZ Finance Bhd. for the hire purchase of a second-hand Proton Perdana.
After using the car for two days, Salleh discovered that the engine condition was not performing in satisfactory manner and the brakes were faulty. Salleh is unhappy with the performance of the car and wishes to terminate the hire-purchase agreement.
Advise Salleh on the following:

Notice of the second schedule was not given to Salleh until 4.3.2019.
The agreement contained a clause in which states that the owner will not be liable for the representation or statement made by the dealer or his servant or agent.
The agreement expressly negates the owner’s liability for fitness and merchantable quality of the car.
On December 2019, Salleh’s business failed and his goods including the Proton Perdana motor car were seized by another creditor in execution of a judgement

Question 2

On 1.7.2019 Rian entered into a hire-purchase agreement with Abraham Electrical Goods Sdn Bhd to hire purchase a Cinema Screen LED television set. He paid the instalments regularly for three months. Since then Rian has left his job. He has defaulted twice in his monthly instalments’ payments, that is in October and November respectively to Abraham Electrical Goods Sdn Bhd.

Subsequently,Abraham Electrical Goods Sdn Bhd sent a letter on 20th December 2019 to Rian informing him that he had defaulted the hire-purchase agreement by his failure to pay the two instalment payments in October and November, and that he must therefore remedy the default. A week after he received the letter from Abraham Goods Sdn Bhd, two men came to his house and informed him that they were instructed by Abraham Electrical Goods Sdn Bhd to repossess Cinema Screen LED television set. When Rian protested they rudely brushed him aside and abruptly dismantle the television set and took it away. Rian now seeks your advice.
Advise Rian as to his rights.

Answer 1

2) A hire purchase agreement is a contract of bailment coupled with an option to hire purchase to acquire the goods delivered to him under such an agreement. By the delivery of goods to the hire purchaser, the hire vendor merely pass with their possession, but not the ownership. The property or title to the goods is transferred to the hire purchaser, on his paying the last installment of the hire price or complying with some other conditions stipulated in the contract. At any time before that the hire purchaser has the option to return the goods and, if he does so, he has only to pay the installments of price that by then have fallen due. The right or option to purchase is the essence of hire purchase agreement. In the event of default by the buyer (hire purchaser) in the payment of any instruments of hire price, the vendor can take back the goods into his possession. This is legally permissible since the property in the goods is still with the vendor.

As per section 18 sub section 1 of Hire Purchase Act 1972

Rights of owner to terminate hire-purchase agreement for default in payment of hire or unauthorised act or breach of ex­press conditions.—
(1) Where a hirer makes more than one default in the payment of hire as provided in the hire-purchase agreement then, subject to the provisions of section 21 and after giving the hirer notice in writing of not less than—
(i) one week, in a case where the hire is payable at weekly or lesser intervals; and
(ii) two weeks, in any other case, the owner shall be entitled to terminate the agreement by giving the hirer notice of termination in writing: Provided that if the hirer pays or tenders to the owner the hire in arrears together with such interest thereon as may be payable under the terms of the agreement before the expiry of the said period of one week or, as the case may be, two weeks, the owner shall not be entitled to terminate the agreement.

As per section 19 of the Hire Purchase Act 1972

Rights of owner on termination.—Where a hire-purchase agree­ment is terminated under this Act, then the owner shall be enti­tled,—

(a) to retain the hire which has already been paid and to recover the arrears of hire due: Provided that when such goods are seized by the owner, the reten­tion of hire and recovery of the arrears of hire due shall be subject to the provisions of section 17;

(b) subject to the conditions specified in clauses (a) and (b) of sub-section (2) of section 10, to forfeit the initial deposit, if so provided in the agreement;

(c) subject to the provisions of section 17 and section 20 and subject to any contract to the contrary, to enter the premises of the hirer and seize the goods;

(d) subject to the provisions of section 21 and section 22, to recover possession of the goods by application under section 20 or by suit;

(e) without prejudice to the provisions of sub-section (2) of section 14 and of section 15, to damages for non-delivery of the goods, from the date on which termination is effective, to the date on which the goods are delivered to or seized by the owner.

So according to the question Rian had entered into a hire purchase agreement with Abraham Electrical Goods Sdn Bhd to hire purchase a cinema screen LED television set on1st July 2019 and he had paid the installment regularly for 3 months after that he failed to pay the installment of 2 months,i.e October and November. Failing to do so Abraham Electrical Goods send a letter to Rian on 20th December 2019. A week after receiving the letter Abraham Electrical Goods send two of his men to Ria's house and instructed them to repossess the cinema screen LED.

So as we can see that Rian had defaulted in paying two months installment which Ultimately led to the termination of the hire purchase agreement by Abraham Electrical Goods and which led to repossession of goods by Abraham Electrical Goods.

So according to me Abraham Electrical Goods was correct over here by repossessing the goods from Rian.