IF YOU WANT TO ENTER INTO A HIRE PURCHASE AGREMENT? KNOW YOUR RIGHTS.
Nkannebe Raymond is a law student and tweets @yung_silky
The commercial life of society especially in a Nigerian setting where the not-too- rich constitute a great number of the society will become hardly tolerable if Hire Purchase commercial relationships do not exist for it will make the poor members of the society not to be able to obtain the use of certain expensive chattels or properties which they could not have the financial buoyancy to make an outright purchase.
Most higher purchase agreement have two or three parties usually the Owner of the property, the Financial Institution usually banks who broker the relationship and the Hirer who is the initiator of the whole transaction. However for emphasis reasons, I will attempt a brief but concise definition of the term Hire Purchase.
Hire Purchase agreement according to Master Hals bury, is "a contract of hire with an option of the hirer to purchase the subject-matter of the agreement after offsetting the entire cost of the goods in a number of agreed installments. But until the making of the last payment, the hirer cannot assume any legal ownership of the said property".
What follows is the Right of the parties in a transaction of such nature:
1. RIGHT OF THE OWNER AGAINST THIRD PARTIES
Where a third party who is usually not a part of the hire purchase agreement has obtained a good title of the goods comprised in a hire purchase agreement by acting in good faith and honest intention, the owner has no right of recovery of the goods. But if the third party obtains not a good title to the goods, the owner may repossess the goods. In the second instance, the court will not consider whether the hirer has already paid all the installmental obligations under the contract.
2. THE RIGHT OF THE HIRER AGAINST THIRD PARTIES
The essential characteristic of the hire-purchase agreement is that as long as the agreement lasts, the legal title over the goods remains with the owner. But since the hirer has the possession of the goods during the subsistence of the agreement, he can sue anyone who interferes with his right of possession either in trespass, conversion or detinue. But when he obtains any damages in the process, he has to account to the owner. In other words, where the hirer is in possession of hired goods which are wrongfully detained or converted or negligently damaged or destroyed by a third party, the hirer has a legal right against such third parties. The hirer's right against third parties who are not member of the Hire purchase agreement is not affected by reason of the termination of the agreement at the instance of the owner so long as the offence was committed when the hirer was still in possession of the goods.
3. RIGHT OF THIRD PARTIES
It is in the nature of the law to put everybody on equal footing and since the owner and hirer has certain rights; in the same vein the innocent third parties have also been accommodated by the law. If you ever find yourself in such corner that is, if you as a third party receives hired goods in circumstances where you never had the opportunity to know that the said goods are objects of a hire purchase agreement and thus do not obtain a good title at least by law, and have been dispossessed by the owner or the finance company, you have a right of action against the hirer for the value you paid for the goods
In conclusion, there is not a single law that exists without exceptions and that has been the beauty and ugliness of the law from time immemorial. As have been said, everybody is accommodated under the umbrella of the law little wonder the Law presumes the accused to be innocent until the contrary is proved. Therefore, from the foregoing if you ever want to enter into a hire purchase agreement or happen to be a victim of circumstance as 'third parties' in a hire purchase agreement, know that you have certain rights and presumable innocence under the Hire purchase Act.