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Rights available to an owner and Hirer in a Hire-purchase agreement

Rights available to an owner and Hirer in a Hire-purchase agreement: Rights available to an owner in a Hire-purchase agreement in Nigeria.

HPA means hire purchase Act in this article.

  • The rights of the owner depend upon the nature of the contract and also differ from contract to contract as well.
  • The owner should have the right to terminate the hire-purchase agreement in cases of default in payment by the hirer or unauthorized use of the goods under the Hire-purchase agreement.
  • On termination of a Hire-purchase agreement, the owner should have the right to retain the hire which has already been paid and to recover the arrears of hire due.
Rights available to an owner and Hirer in a Hire-purchase agreement
Rights available to an owner and Hirer in a Hire-purchase agreement

Remedies for an owner in Hire Purchase Agreement Violations

Purchase agreements are basically contracts that create legal duties between the parties. Violations of purchase agreements are remedied in a similar fashion to other types of breach of contract cases. Remedies can either be legal or equitable. Legal remedies may include:

Rights available to an owner and Hirer in a Hire-purchase agreement
Rights available to an owner and Hirer in a Hire-purchase agreement

Damages awards to cover losses directly caused by the breach (such as recovery of the payment price)

Damages awards to cover other losses “flowing from” the breach (such as a loss of business profit caused by the breach)

Equitable remedies can include:

  • Reformation (rewriting of some or all of the contract)
  • Rescission (cancelling of the entire contract)
  • Injunctions (such as requiring the seller to deliver the goods)
  • Right to seize the Goods
  • lien of the third parties
  • sale, pledge and execution
  • levy of execution

How Are the Remedies Determined?

The application of legal or equitable remedies will depend on several factors, including:

  • State laws (contract laws can be different from area to area)
  • The exact terms of the agreement
  • The facts surrounding the breach incident

In some cases, the purchase agreement itself may outline the remedies that the parties should seek. Some agreements may allow the parties to file a lawsuit, while other agreements may limit remedies to mediation or other alternatives. These will all depend on the preferences of the parties.

Remedies available for a hirer in hire purchase agreement

The right of the hirer to purchase at any time with rebate:

The hirer should have a right to, at any time during the course of the hire-purchase, purchase the goods without having to wait for the expiration of the hire-purchase agreement. When this occurs, he should get some rebate because the interest element of the hire-purchase price would have been reduced.

The right of the hirer to terminate the agreement at any time:

The hirer has a right to terminate the hire-purchase agreement at any time. If it is been provided for in the agreement.

Rights available to an owner and Hirer in a Hire-purchase agreement
Rights available to an owner and Hirer in a Hire-purchase agreement

The right of the hirer to appropriate payments in respect of two or more agreements:

Where a hirer has more than one hire-purchase agreement with the same owner, he has a right to appropriate his payment in respect of the hire-purchase agreements. Where he fails to appropriate his payment, the HPA normally provides for how his payment should be appropriated.

Assignment and transmission of hirer’s right or interest:

Rights available to an owner and Hirer in a Hire-purchase agreement
Rights available to an owner and Hirer in a Hire-purchase agreement

A hirer should have the right to assign his interests in a hire-purchase agreement. This matter is not presently provided for in the HPA. It shall be discussed in greater details next week. In addition to the right of assignment, there should be clear and fair provisions regarding the transmission of the rights of the hirer upon his death, but before the hire-purchase transaction has come to an end. This is another issue that will be treated in full some other time.

The right of hirer in case of seizure of goods by owner:

The HPA gives the owner the right to repossess the goods the subject matter of a hire-purchase agreement under certain circumstances. In spite of this, the hirer still has some rights during this period which the HPA should provide for adequately. The issues concerning repossession have been considered.

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