Hire purchase contract

MEANING: This is a form of agreement in which the owner transfers possession of goods to the hirer after paying an initial deposit while he retains ownership until final payment is made. It means the goods are on hire and not owned by the buyer until the final installment is paid.

PARTIES TO THE CONTRACT

1. The dealer.
2. The hirer
3. Finance company.

FEATURES OF HIRE PURCHASE

1. Cash price should be stated.
2. Agreement should be documented and evidenced in writing.
3. Requires initial deposit.
4. Installment payment.
5. Suitable for durable goods.
6. Seller has right of repossession.
7. Buyer can take possession and not ownership.

ADVANTAGES OF HIRE PURCHASE TO SELLERS.

1. Increase in turnover.
2. Enable sellers to dispose of expensive.
3. The sellers can change higher prices for goods.
4. Sellers can repossess the goods.
5. Sellers retain ownership until full payment is made.
6. Increase in profit.

ADVANTAGES OF BUYERS

1. Buyers enjoy the use of goods even when they have not fully paid.
2. Affords buyers the opportunity of acquiring expensive goods.
3. Improves the customer’s standard of living.
4. Buyers can return goods to seller before completion of payment.
5. Buyers have access to credit.

DISADVANTAGES TO SELLERS

1. Customers may fail to pay as at when due.
2. Additional cost may be incurred as a result of court persecution.
3. A lot of capital may be tied down.
4. Problems of irrecoverable debts.

DISADVANTAGES TO BUYERS

1. Buyers may pay more for the goods.
2. They can buy more than what they can afford to pay for.
3. The customers may not be able to negotiate better conditions of sales.
4. The interest rate may be very high.

DEFERRED PAYMENT

This is a credit agreement in which the customer is allowed to take possession and ownership of the goods upon the payment of the initial deposit.

FEATURES OF DEFERRED PAYMENT

1. Ownership and possession are transferred immediately to the buyer.
2. Less durable goods are involved.
3. Sellers cannot repossess the goods.
4. Lower price is charged.
   ASSIGNMENT

Differentiate between a buyer and a seller

State the advantages of a buyer

State the feature of hire purchase

CONTRACT OF SALES OF GOODS (WEEK5)

Meaning of sales of goods: The contract of sales of goods is governed by the law of contract. According to the sales of goods Act of 1893. Sales of goods is a contract of goods whereby the seller transfers or agrees to transfer property in goods to a buyer for money consideration called the price.

FEATURES OF CONTRACT OF SALES

1. There must be agreement to transfer property in goods.
2. The property may be transferred immediately under the contract or it may be agreed to be transferred.
3. There must be a buyer and a seller.
4. There is money consideration on called price.

IMPLIED PROVISIONS OF THE SALES OF GOODS ACT 1893

1. Right of seller to sell.
2. That the goods shall correspond with the description.
3. That the goods must be of merchantable quality.
4. That the goods shall be fit for a particular purpose.
5. That the bulk of goods shall correspond with sample.
6. That the goods shall be free from any encumbrance at the time property is to pass.
7. That the goods shall be delivered and accepted.

CONTRACTUAL RULES FOR THE SALES OF GOODS.

1. Existence of an agreement.
2. Intention to create legal relations.
3. Contractual capacity of parties.
4. It must be supported by valuable considerations.

RIGHTS OF THE UNPAID SELLERS.

The seller has the following rights;

1. Right to lien.
2. Right to stoppage in transit.
3. Right to re-sell.
4. Right to sue the buyer for the price.
5. Right to sue buyer for non-acceptance.

RIGHT TO THE BUYER

The buyer has the following rights in a contract of sale;

1. He can sue for non-delivery.
2. He can sue to recover purchase price.
3. Right to sue the specific performance.
4. Right to repudiate the contract.

ASSIGNMENT

Explain the right of a buyer