May 2018 Q3 b.
Komosa Limited entered into a Hire- Purchase agreement with Mr. Gyeabour over a car. The agreement was to last for a period of 4 years of monthly instalment. The instalment arrangements went on for three and half years till Mr.Gyeabour decided to terminate the arrangement and stopped paying the instalment. For the remaining period, the Company had no news of Mr. Gyeabour or the car. When the car was later found, the air conditioning compartment was in a bad state of disrepair. The Company now intends to sue Mr. Gyeabour who has resurfaced. Mr. Gyeabour is now pleading with the Company for mercy.
Required:
i) Describe TWO basic requirements that should be outlined in a Hire Purchase Agreement. (4 marks)
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- a statement of the cash price and the hire-purchase price or total purchase price, as the case may be, of the goods;
- the amount of each instalment by which the price is to be paid and the date or the mode of determining the date upon which each instalment is payable;
- a description or list of the goods to which the agreement relates sufficient to identify them;
- a notice, which is at least as prominent as the rest of the contents of the agreement, in the terms set out in the First or Second Schedule to this Decree.
ii) Explain to Mr. Gyeabour TWO steps he should have taken in respect of the termination and the damaged car under the Hire-Purchase Act, 1974 NRCD 292. (6 marks)
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Gyeabour should have taken the following steps as a hirer:
- The hirer under a hire-purchase agreement is entitled at any time before the final payment under a hire-purchase agreement falls due, to terminate the agreement by giving notice of the termination to the person entitled to receive payments under the agreement.
- Where the hirer terminates the hire-purchase agreement he is liable to pay the difference between the total of the sums of money paid and one-half of the hire-purchase.
- Where the agreement is terminated, the hirer shall return the goods at the expense of the hirer to the premises from which they were originally supplied or to any other place as the owner may direct.
- Where the agreement is terminated the hirer who has failed to take reasonable care of the goods is liable to compensate the owner for the loss or damage caused by his failure.