Business Law: Detailed Analysis of a Hire Purchase Agreement Contract

This report provides a detailed analysis of a hire purchase contract between Hickson Rd, The Rocks NSW 2000 and 165 Warner Ave, Bondi NSW 2026. The report begins by outlining the requirements for a valid contract, including a description of the goods, the rate of hire, the total price, details of the deposit, and information on both parties' rights. It then identifies missing structural elements, such as the lack of a defined contract term, the absence of clear specifications for the equipment, and the missing interest rate. Finally, the report suggests improvements to the contract, including defining a specific term, clarifying the scope of the equipment, and specifying the interest rate and payment dates. The report concludes that while the contract meets many validity requirements, it lacks critical details that could lead to future disputes, and suggests amendments to enhance its legal enforceability.

Business law

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Requirement for a valid contract for the present case.................................................................1
TASK 2............................................................................................................................................3
Missing structural elements in the contract.................................................................................3
TASK 3............................................................................................................................................4
Suggested improvements for improvisation of the contract.......................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
A commercial contract defines the responsibilities and obligations of the parties
under contract. Under a contract parties makes promise to complete a certain task and
in return other parties pays certain consideration having monetary valuation. In the
present report a real life case over the contract Hickson Rd, The Rocks NSW 2000
(Company) and 165 Warner Ave, Bondi NSW 2026 (Hire Purchaser) is taken and same
is evaluated is context of requirement of valid contract, the missing element in the
contract. For the same suggestion are also given for improvising the contract.
TASK 1
Requirement for a valid contract for the present case
To form a valid contract for the hire purchase there are certain requisitions which
must be included in the contractual agreement to form a valid contract between the
parties with a legal enforceability. The main requirement of a hire purchase contract are:
A description of the goods:
The goods which are taken on the hire purchase under this agreement between
Hickson Rd, The Rocks NSW 2000 and 165 Warner Ave, Bondi NSW 2026 are of
Equipment and Fitout and Refurbishment (Stone & Devenney, 2017)). There is a clear
description over the details of items. It is clearly defines the use of Equipment and
Fitout and Refurbishment. What is the rights which available to the higher purchaser
and the responsibilities over the working condition and maintenance of the equipment.
The rate of hire and interest charges;
It is clearly mentioned in the repayment section that the payment with be made
through monthly instalments for the amount of $346435 which is the cost price of the
Equipment and Fitout and Refurbishment and addition of interest on this amount.
The total price to purchase the goods:
The agreement clearly defines the total amount of principles for hiring the
Equipment and Fitout and Refurbishment by the hire purchaser for his bowling club
within the prescribed within the premise (What is a Hire Purchase Agreement, 2018). In
case of failure to pay the instalment interest at the rate of 12%per annum will be
charged till the default payment is made.
Details of the deposit
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The contract of hire purchase includes the mode of payment that must be made
by the hire purchaser to the company. The deposit of monthly instalment must be made
by the higher purchaser into the companies bank account which was nominated by the
company. The conditions related with lump sum payment is also defined in the
contractual agreement (Van der Eng, 2017). Moreover, other detail related with
repayment in the contract includes the payment on regular basis irrespective of the fact
of use of Equipment and Fitout and Refurbishment during the time of hire purchase. The
provision related with first payment is also clearly defined in the contract.
Information on both parties’ rights:
The information of the both parties includes the details of the parties to contract
and their rights, responsibility under the contract. In the hire purchase agreement the
use of the item taken on the hire purchase. Under the hire purchase contract between
The Rocks NSW 2000 and 165 Warner Ave, Bondi NSW 2026 the information of parties
and their rights is defined under the various clauses of the contract which are:
Higher purchase term:
Under this section of the contract it is clearly defined that there is agreement
between the company and hire purchaser. The later party have a right to receive the
possession of Equipment and Fitout and Refurbishment with a having an exclusive right
to use them till the term of agreement in the premise (Hire Purchase agreement
Elements, 2018). To receive Principe amount and instalment there on is a right of the
company for hiring out the Equipment and Fitout and Refurbishment to the hire
purchaser.
Termination:
This clause under the hire purchase contract define the conditions no occurrence
of which the contract will stand terminated. This incudes the actions form both the
parties. A breach by one give automatic right to another of terminating the contract.
Other rights of the parties:
Under the various clauses of the hire purchase contract the there is mention of
the disclaimer and indemnity clause which defines right of the company that it s not
responsible for the acts of the hire purchaser.
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With this it can be stated that the contract have all the valid points to constitute a legal
contract. As this have all the valid requirement of contract formations and defining the
legal authorities of the jurisdiction to here out any disputes or other legal matters falling
under the scope of this hire purchase contract.
TASK 2
Missing structural elements in the contract
The contract structure is not clearly structures and even miss certain specific
points which are significant to the contract of hire purchase. The major flaws or the
missing elements of this hire purchase contract was identifies as:
No exact term of contract is defined:
Under a hire purchase contract-one of the main requisition is to pen down the
exact terms and condition of contact and clearly define the item given on hire purchase.
As seen in the contract under the clauses of hire purchase and hire purchase term there
is no definite timeline for which the articles are given on the hire purchase. There is just
mention of the term that till the time the Equipment and Fitout and Refurbishment are
used in the club and definite price the contract continues this means the continuation of
the contract is for infinite time from the date it is made and there is no scope of
changing it.
The inclusion and exclusion of Equipment and Fitout and Refurbishment:
The contract contains a clause of Equipment and Fitout and Refurbishment
which defines the provision related with the inspection, payment, use and maintenance
of the articles given on hire purchase (Ali, Bourova & Ramsay, 2016). But there is no
clear provision related with what exactly comes in the ambit of Equipment and Fitout
and Refurbishment. Under the definition section the reference to schedule A is given but
there is no such mention of the scheduled is there in the contract. On clear definition of
Equipment and Fitout and Refurbishment can lead to cater controversies in future over
the inclusion and exclusions of the equipments as one party may insist some article as
part of hire purchase articles and other can refuses to do so.
No rate of interest is mentioned
Under a hire purchase contract one of the requirement is related with the
payment of the money for the items taken on hire. In this contract the hire purchaser is
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required to pay monthly instalment which includes the Principe and the interest there
on. In the whole contract there is no mention of the rate of interest which will be charged
on the principles amount. Therefore, no exact metro of the instalment amount is there in
the contract. Though, there is mention of the term of lump sum payment still the
requisition of mentioning interest rate stand intact as this is an essential requirement of
the hire purchase contract. Moreover, there is no definite date fixed for the payment of
instalment by the hire purchaser to the company in its nominated bank account.
TASK 3
Suggested improvements for improvisation of the contract
The following are the suggestions which parties to contract must adhere to in
order to improvise the contract, increase is authenticity and make is more legally
binding:
For the first issues of undefined term of the contract it can be stated that it is
better to include certain condition over a time frames after which the contract must be
renewed with change in some terms and condition as per the conditions prevailing at
that time. With this the contract can be renewed on time and the changes made will not
lead either of the parties take undue advantages from the older terms (Hire-Purchase
Act 1960 (NSW), 2018). This better to enter a clause in the contract over the time the
contract continues with other conditions and with stating that if party wants to continue
the contract it can be renews after expiration of the defined term on contract.
For the problem of inclusion and exclusion of Equipment and Fitout and
Refurbishment it is suggested that though there is mention of definition of this article
under schedule A. It more appropriate to enter the clause which clearly explain the
definition and also what comes under its scope and what not. This is required to avoid
the future dispute over the scope of the articles given and taken on hire purchase.
For the issues of interest rate it is recommended that that under the clauses of
hire purchase with mention the principle amount the both parties must agree to a rate of
interest over the Principe amount and determine the amount of monthly instalment. It is
required to avoid the dispute over the rate on interest as the company can demand a
higher rate which is too high for such contract. As there is no mention in the contract
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about rate the hire purchaser will get bound to pay such interest which is wrong and can
lead to dispute.
Also, it is also suggested to fix a date of payment of the last date of payment or the
time frame within which the payment must be made to ensure the timely payment of the
instalment. So it is better to amend the contract at right time by making changes
recommanded.
CONCLUSION
From the above report it can be concluded that the contract between The Rocks
NSW 2000 and Warner Ave, Bondi NSW 2026 was related to hire purchase of
Equipment and Fitout and Refurbishment for a fixed amount which was required to be
paid in monthly instalments with interest. The valid contract requisition in the contract
includes majority of the requirements includes the term if the contract, mode of
payment, definitions of all the technical points. Furthermore, it can be articulated that
the hire purchase contract requires certain specific related with a specific time frame of
the hire purchase and there is no rate of intersperse is definiens the contract over the
principle amount. Moreover, the date of payment or time frame of payment of instalment
has not been defined in the contract and there was no destination of the Equipment and
Fitout and Refurbishment as what is included in it and what is not. For all of these flaws
in the contract significant advice have been given to make is more intact and increase
the enforceability of attractant in legal context.
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REFERENCES
Books and Journals
Ali, P., Bourova, E., & Ramsay, I. (2016). The statutory right to seek a credit contract
variation on the grounds of hardship: a history and analysis. Federal Law
Review. 44(1). 77-109.
Stone, R., & Devenney, J. (2017). The modern law of contract. Routledge.
Van der Eng, P. (2017). Managing political imperatives in war time: strategic responses
of Philips in Australia, 1939–1945. Business History. 59(5). 645-666.
Online
Hire-Purchase Act 1960 (NSW). 2018. Available through :<https://jade.io/j/?
a=outline&id=439215>.
Hire Purchase agreement | Elements. 2018. Available through
:<https://accountlearning.com/hire-purchase-agreement-elements-parties-involved-
example/>.
What is a Hire Purchase Agreement. 2018. Available through
:<https://legalvision.com.au/hire-agreements/>.
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