The Attorney General’s Chambers and Ministry of Legal Affairs has expressed regret over complaints of alleged unfair and possibly unlawful conduct in hire purchase transactions. To address these issues, the government enacted a modern Hire Purchase Act in 2022, with the main objective of bringing greater balance and fairness in the relationship between the hirer and owner.
However, despite the enactment of the legislation, the ministry said that there have been complaints that provisions of the act are not being properly implemented or complied with, or are being completely ignored. As a result, the public is urged to familiarize themselves with the provisions of the Act or to seek legal counsel if necessary, especially for those intending to enter into hire purchase agreements.
Below are some of the measures that were implemented in the law:
Section 3(1) obliges the owner to disclose in writing the cash price before the hire purchase agreement is entered into, while Section 3(4) requires all hire purchase agreements to contain clauses that state the hire purchase price and the cash price of the goods, among others.
Section 5 gives the right to the hirer or buyer to terminate the agreement, and Section 6 lists the clauses in agreements which, if included, will be void and therefore unenforceable. Section 10 entitles the hirer or buyer to cancel the agreement within 7 days of signing, and Section 13 entitles a hirer or buyer who has cancelled under Section 10 to recover monies paid under the agreement.
Section 23 prohibits the owner from enforcing any right to recover possession otherwise than by action in a court of law, if the hirer or buyer has paid seventy percent or more of the hire-purchase price or total purchase price. Section 28 provides for a rebate on early payment of five percent per annum, and Section 29 requires owners to give at least twenty-one days prior notice of their intention to recover possession before they can enforce their right to recover possession of the goods if a hirer or buyer has paid less than seventy percent of the hire purchase price.
