Please be remind that this act/law is based on Malaysia Law Act PART 1 PURPOSE T
ID: 343872 • Letter: P
Question
Please be remind that this act/law is based on Malaysia Law Act
PART 1 PURPOSE The purpose of this assignment is to assess the understanding of the students on the application of the law of hire purchase to their real life business transactions. REQUIREMENT: The Hire Purchase Act 1967 provides that the owner and hirer in a hire purchase agreement are bound not only by the agreement but also by the procedure stipulated in the Act. However, a hirer who has become financially incapable might seek the assistance of a third party to cover up for him under an arrangement popularly known as "continue to pay". Students are required to look into the legality of this practice, evaluate it and recommend better solutions to the hirers.Explanation / Answer
The hire purchase act 1967 is the most used consumer credit by the malaysian people with regards to buying of cars and two wheelers. The hire purchase act is under Ministry of Domestic trade and consumer affairs. the act looks after the meaning of hire purchase, the formation , its procedures , rights and obligations of parties, important terms and process for repossecion . The hire purchase is different from credit sale since the parties involved will have to come under two agreements one with the seller and the financier and the second with the financier and the purchaser. Normally goods which have higher price value cannot be afforded by people. so they come in contract with hire purchase with their banks and consumer credit institutions. The agreement enables the general public to purchase goods which are costly by paying installments to the credit institutions and the ownership will get transferred from the credit institutions to the purchaser. For eg: if mr yong wants to pruchase a car but does not have the full money for paying the car company he will come into a hire purchase agreement with the car company and the credit institution where on providing a small amount he will get the car but the ownership will be transfered in his name only after he has paid all the installments with interest .
For most of the companies which sell goods who have high prices coming into hire purchase is very common and easy as the goods are also sold for which they get money either by the purchaser or by credit institutions and for the banks they get consumers for loan and earn interest and for the purchaser he gets the goods by paying small installments . so everyone wins. The other options which the hires can take is leasing which is a long term rental agreement with low monthly repayments. using credit cards for buying small consumer goods where the payment can be made after the span of 30 days to the bank and the ownership is with the purchaser immedietly .