Discuss the provisions under Hire Purchase Act 1967

Section 2(1) Hire Purchase Act 1967 that hire purchase includes a letting of goods with an
option to purchase and an agreement for the purchase of goods by instalments. Under Section
38, the hirer cannot sell or dispose the goods because he is not the owner of the goods until full
payment is made. The Hire purchase agreement is an agreement between the Owner and Hirer.

BEFORE
Before the parties sign the agreement, there must be negotiation between them as pre
contractual information. Section 4(1) HPA states giving notice of second schedule before
entering hire purchase agreement. The owner is required to give a prospective hirer a notice /
complete written statement signed by him in accordance with the form set out in part I Second
Schedule (summary obligation of hirer). If carried out by the dealer, such dealer is required to
give a perspective hirer a complete written statement sign by him in accordance with the form
set out in Part I Second Schedule and after that serves Part II of the Second Schedule (consent
from the owner)
Contents of the schedule that the description of the goods, statement whether the good is new
or second hand, address where the goods will be kept, cash price, deposit refer to Section 31
states the deposit is not less than one-tenth of the cash price of the goods, insurance or fees,
duration of hire purchase and the instalments payment.
Based on the cased of Affin Credit (M) v Yap Yuen Fui, it was held that section 4(1) was a
mandatory obligation before entering into a hire purchase agreement. It is an offer and
acceptance and if the owner fails to give the written form in the second schedule or fails to sign
it, the hire purchase agreement is void.

DURING
Section 4A states the hire purchase agreement must br in writing. (The agreement shall be
deemed in writing if it is printed in black). Section 4B (1) states the hire purchase agreement
must be signed by all the parties and under 4B(2) after the document has been completed.
Section 4C states the content of hire purchase agreement. It is a date on which the hiring start,
the number of instalments to be paid by the hirer, the amount of each instalment, the time for
the payment, a description of the goods sufficient to identify them and the address where the
goods are kept. Section 4D states there must be a separate agreement for every items unless the
goods are sold as a set or complimentary of each other. Section 4E states the hirer can keep the
motor vehicle registration certificate. Section 4F states there must be no alteration or
modification of the motor vehicle. Section 4G states declaration of 2nd hand motor vehicle and
compulsory inspection by Puspakom.
AFTER
Section 5 states within 21 days after the hire purchase agreement is completed, the owner shall
serve on each hirer and guarantors, a copy of the agreement. The effect if not comply all the
producers that the hire purchase agreement is void and the owner shall be guilty of an offence
under this act. The penalty under section 46 HPA states fine maximum RM100, 000 or
imprisonment maximum 5 years of both.