Case Study on Hire Purchase Law

This case study examines the options available to Cyclops under the Hire Purchase Act 1967 to ensure compliance with the act. It discusses the definition of a hire purchase agreement, the rights and duties of the hirer and owner, and the consequences of non-payment of installments. The case study applies these principles to a scenario where Cyclops purchased a car through a hire purchase agreement but was unable to make the installments due to termination of employment. It concludes by outlining the two options available to Cyclops under the act: regular installment payments or full repayment of the loan.

Running head: CASE STUDY ON HIRE PURCHASE LAW
CASE STUDY ON HIRE PURCHASE LAW
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1CASE STUDY ON HIRE PURCHASE LAW
Introduction:
The present case study involves the following issues comprising of what are the options
available to Cyclops according the Hire Purchase Act 1967 such that there will be no breach of
the said act.
Rules:
According to section 2(1) of the Hire Purchase Act 1967, hire purchase agreement means
letting of goods with an option to purchase and an agreement for the purchase of goods by
instalments.
In the case of Arab-Malaysian Finance Bhd v Samian Bin Sabin & Anor , the court held
that in such agreement, owner is the person who has hired out goods under such agreement and
such owner has rights and duties according to the agreement or according to the provisions of
law.
Under such agreement both the hirer and owners are bound by certain rights and duties
toward each other failure of which will cause the breach of the contract. The statutory rights of
the hirer are embodied in sections 9 to 14, 15(1) and 18 of the act. The corresponding duties are
contained in section 20A mainly. The owner has also certain rights that are present in sections
16(1) and 16A mainly and duties as contained in sections 9(1)
The main duty of the hirer is to pay the installments regularly. Failure of which will make
the owner take back the possession of the goods hired as held in Tractor Malaysia Bhd v
Kumpulan Pembinaan Malaysia Sdn.Bhd. However the hirer if desired may terminate such

2CASE STUDY ON HIRE PURCHASE LAW
agreement by paying all the installments together as held in Leong Weng Choon v Consolidated
Leasing (M) Sdn Bhd.
Application:
In the present case study, Cyclops bought a car via hire purchase agreement from Goody,
a car dealer. According to the agreement, Cyclops has to pay RM500 monthly as installments for
4 years. However, Cyclops was terminated from his service after six months. Due to which he
was unable to pay the installments.
According to the said act, if he was unable to pay installments for consecutive two
months, there will be breach of agreement. Hence, the owner has the right to take back the
possession of the car by serving a 21 days notice. After such 21 days, if he could not repay the
due installments, the owner will take back the car. However, he cannot sell or dispose of such car
within the next 21 days. Cyclops if be able to repay the due installments within the 21days he
can get back the possession. If he cannot, the car will be taken in the possession of the owner
permanently.
Conclusion:
Hence, according to said act, Cyclops is left with two options mainly, firstly to pay the
installments regularly plus the repayment of due installments, if any. The second option available
to him is to repay the loan entirely at one installment and take back the possession entirely at
once. The second option is easier because unnecessary extra interest money will b saved by him.

3CASE STUDY ON HIRE PURCHASE LAW
References:
Hire Purchase Act 1967
Leong Weng Choon v Consolidated Leasing (M) Sdn Bhd[1998] 3 AMR 3133
Tractor Malaysia Bhd v Kumpulan Pembinaan Malaysia Sdn.Bhd [1979] 1 MLJ 129