Labour Government moves to protect hire purchase consumers

BASSETERRE, ST. KITTS, JULY 11TH 2013 (CUOPM) – The Denzil L. Douglas Labour Party Administration has gone to the St. Kitts and Nevis National Assembly to protect hire-purchase consumers.

Minister of International Trade, Industry Commerce and Consumer Affairs, the Hon. Richard “Ricky” Skerritt introduced and had read a first time, The Hire Purchase Bill, 2013, during last Monday’s sitting of the lawmakers’ body.

The purpose of the Bill is to make provision for the law respecting hire-purchase and sell upon credit of goods, and to provide for related or incidental matters.

Clauses 1, 2, and 3 of the Bill seek to make provision relating to matters of a preliminary nature, that is to say, the short title of the Bill, interpretation of certain words and terms used in the Bill, and the scope of the Bill. Clause is important in that it makes provision to the effect that the “Act shall apply in relation to all hire-purchase agreements and credit-sale agreements under which the hire-purchase price or total purchase price, as the case may be, does not exceed four thousand dollars ($4,000.00), and the expressions “hire-purchase agreement” and “credit-sale agreement” shall be construed accordingly.

Clauses 4 and 5 of the Bill seek to make provision relating to the conditions that must be satisfied before concluding a hire-purchase agreement and a credit-sale agreement. In respect to hire-purchase agreements, the owner of the goods is required to state in writing to the prospective hirer a price at which the goods may be purchased by the hirer for cash before the agreement is concluded. Further, the owner would not be entitled to enforce the agreement, a contract of guarantee relating to the agreement or a right to recover the goods from the hirer, unless the requirements set out in subsection (1), (4) and (5) of this Clause have been complied with.

In respect to credit – sale agreements, the seller is required to state in writing to the prospective buyer a price at which the goods may be purchased by the buyer for cash before the agreement is concluded. Further, the seller would not be entitled to enforce the agreement or a contract of guarantee relating to the agreement, unless the requirements set out in subsection (1), (4) and (5) of this Clause have been complied with.

Clause 6 of the Bill makes provision respecting the right of cancellation of certain hire-purchase and credit-sale transactions. In that connection, the Clause (in subsections (2) & (3) thereof) seeks to provide that

“(2) The prospective hirer or buyer may, at any time after he or she has signed the relevant document and before the end of the period of four days beginning with the day on which he or she receives the second statutory copy, serve a notice, cancelling the hire-purchase or credit-sale transaction,

(a) on the owner or seller ; or

(b) on any person who, whether by virtue of this Act or otherwise, is the agent of the owner or seller for the purpose of receiving such a notice.

(3) The notice of cancellation served as provided in subsection (1) shall have effect if it indicates the intention of the prospective hirer or buyer to withdraw from the transaction to which the relevant document relates.”

Clause 7 of the Bill provides for the method by which a notice of cancellation may be served.

Clause 8 of the Bill seeks to make provision that would ensure that information as to the right of cancellation by a buyer or hirer is clearly stated in the relevant document which constitutes a hire-purchase agreement or credit-sale agreement. The statement must be contained in such position and must comply with such requirements (whether as to type, size, colour or disposition of lettering or otherwise) as may be prescribed by regulations.

Clause 9 of the Bill seeks to make provision for the re-delivery, and interim care, of goods comprised in a notice of cancellation. The Clause spells out the procedure or method to be followed in re-delivering the goods. It also imposes on the hirer or buyer an obligation to take reasonable care of the goods, and such obligation is owed to the person for the time being entitled to possession of the goods, and any breach of that obligation shall be actionable, at the suit of that person, as a breach of a statutory duty.

Clause 10 of the Bill seeks to provide for further consequences of a notice of cancellation. Such consequences include, inter alia, the following:

  • Where a notice of cancellation operates so as to rescind a hire-purchase agreement or credit-sale agreement

(a) that agreement, and any contract of guarantee relating thereto, shall be deemed never to have had effect, and

(b) any security given by the prospective hirer or buyer in respect of money payable under the agreement, or given by a guarantor in respect of money payable under such a contract of guarantee, shall be deemed never to have been enforceable.

  • On the service of a notice of cancellation, any sum which

(a) has been paid by the prospective hirer or buyer in respect of the goods to which the relevant document relates, whether it has been paid before the signature of the document or in pursuance of any provision contained in that document, and

(b) is comprised (or would, if the document constituted a hire-purchase agreement or credit-sale agreement, be comprised) in the hire-purchase price or total purchase price, or (if it is not or would not be so comprised) has in pursuance of any antecedent negotiations been paid to, or for the benefit of, the owner or seller, or has in pursuance of any such negotiations been paid to, or for the benefit of, any person (other than the owner or seller) who conducted those negotiations, shall be recoverable by the prospective hirer or buyer from the person to whom it has been paid ; and, if the prospective hirer or buyer is in possession of those goods, he shall have a lien on them for any sum which he is entitled to recover by virtue of this subsection.

Clause 11 of the Bill seeks to make provision as to what happens when a notice of cancellation is given in respect of goods which were given in part – exchange. To that end the Clause seeks to make provision to the effect that unless, before the end of the period of ten days beginning with the date of service of the notice of cancellation, the goods in question are delivered to the prospective hirer or buyer, and are then in a condition which is substantially as good as when they were delivered to the dealer, the prospective hirer or buyer shall be entitled to recover from the dealer a sum equal to the part-exchange allowance. The Clause makes provision for related matters in that respect.

Clause 12 of the Bill seeks to make provision whereby a dealer is presumed to be an agent of the owner or seller goods in respect of certain representations, while Clause 13 of the Bill seeks to make provision whereby a dealer is presumed to be agent of the owner or seller for purposes of receiving certain notices.

Clause 14 of the Bill seeks to empower a hirer to terminate, after giving written notice, a hire-purchase agreement at any time before the final payment under the agreement falls due. In that connection, the Clause spells out the procedure to be followed and how any existing liability arising out of the agreement is to be resolved.

Clause 15 of the Bill seeks to make provision respecting conditions and warranties which are to be implied in hire-purchase agreements. Such conditions and warranties include, inter alia,

  • An implied warranty that the hirer shall have and enjoy quiet possession of the goods;
  • An implied condition on the part of the owner that he or she shall have a right to sell the goods at the time when the property is to pass;
  • An implied warranty that the goods shall be free from any charge or encumbrance in favour of any third party at the time when property is to pass.

Clause 16 of the Bill seeks to make provision respecting implied conditions in hire-purchase agreements by reference to sample or description. Such implied conditions include

  • An implied condition that the bulk will correspond with the sample in quality;
  • An implied condition that the hirer will have a reasonable opportunity of comparing the bulk with the sample.

Clause 17 of the Bill seeks to make provision respecting voidable provisions in hire-purchase and credit-sale agreements. In that connection it seeks to provide, among other things, that any provision in any agreement shall be void whereby

  • an owner or any person acting on his or her behalf is authorised to enter forcibly upon any premises for the purpose of taking possession of goods which have been let under a hire-purchase agreement, or is relieved from liability for such forcible entry;
  • the right conferred on a hirer by this Act to terminate the hire-purchase agreement is excluded or restricted, or whereby any liability in addition to the liability imposed by this Act is imposed on a hirer by reason of the termination of the hire-purchase agreement by him or her under this Act;
  • the right conferred on a hirer by this Act to remedy the breach of a hire-purchase agreement in accordance with the provisions of this Act is excluded or restricted or whereby any liability in addition to any liability imposed by this Act is imposed on a hirer by reason of the continuation of the hire-purchase agreement under this Act;
  • a hirer, after the termination of the hire-purchase agreement or the bailment in any manner, whatsoever, is subject to a liability which exceeds the liability to which he or she would have been subject if the agreement had been terminated by him or her under this Act.

Clause 18 of the Bill seeks to make provision that require owners and sellers to supply certain documents and information to the hirer or buyer before the final payment is made under a hire-purchase or credit-sale agreement. In that connection, it also makes some default provisions.

Clause 19 of the Bill seeks to impose an obligation on the hirer to give information as to the whereabouts of the goods.

Clause 20 of the Bill seeks to make provision respecting appropriation of payments in respect of hire-purchase agreements where a hirer is liable to make payments in respect of two or more hire-purchase agreements to the same owner.

Clause 21 of the Bill seeks to make provision respecting evidence of adverse detention in actions by owners to recover possession of the goods.

Clause 22 of the Bill seeks to make provision to the effect that where a hirer has paid 70% of the hire-purchase price, the owner of the goods can only recover such by action.

Clause 23 of the Bill seeks to make provision respecting the powers of court in certain actions by the owners to recover possession of the goods.

Clause 24 of the Bill seeks to make provision respecting the effect of postponement of operation of an order for specific delivery of goods to the owner.

Clauses 25, 26, 27, 28, 29, and 30 of the Bill seek to make provision respecting successive hire-purchase agreements between the same parties, bankruptcy of the hirer, conditions for recovery of possession by the owner, hirer’s right of refusal to surrender goods in certain cases, obstruction, and installation charges.

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