Question

Explain the conditions and warranties which are to be implied in every hire-purchase agreement.

Answer 1

The conditions and warranties which are to be implied in every hire-purchase agreement are-

• An implied warranty that the hirer shall have and enjoy quiet possession of the goods.
• An implied warranty that the goods shall be free from any charge or encumbrance in favor of any third party at the time when the property is to pass.
• An implied condition on the part of the owner that he shall have a right to sell the goods at the time when the property is to pass.
• If the hirer states the purpose for which the goods are required, the goods must be fit for such purpose.
• An implied condition that the goods are of merchantable quality. However, this would not apply in the following situations:-
  • Where the goods are hired on a second hand basis and this is stated by the memorandum of agreement.
  • If the defects in the goods are of the type that the owner could not have been reasonably aware of at the time of the agreement.
  • If after the hirer has examined the goods, the defects are of such a nature that he reasonably ought to have discovered when examining the goods.
• An implied condition that the goods shall be of merchantable quality, but no such condition shall be implied by virtue of this clause-
  • As regards defects of which the owner could not reasonably have been aware at the time when the agreement was made, or
  • As regards defects of which the owner could not reasonably have been aware at the time when the agreement was made, or
  • Where the hirer has examined the goods, or a sample thereof, as regard defects which the examination ought to have revealed, or
  • If the goods are second-hand goods and the agreement contains a statement to the effect