EQUITABLE RELIEF FOR THE PURCHASER OF HIRE‐PURCHASE GOODS
| Published date | 01 September 1956 |
| Date | 01 September 1956 |
| Author | Aubrey L. Diamond |
| DOI | http://doi.org/10.1111/j.1468-2230.1956.tb00374.x |
EQUITABLE
RELIEF
FOR
THE PURCHASER
OF
HIRE-PURCHASE
GOODS
ALTHOWGR
the layman commonly regards
a
hire-purchase agreement
simply as a means
of
buying goods without paying cash, the legal
view
is that
a
true hire-purchase agreement
is
not a sale of goods
at all.
It
is
A
complex contract which creates a bailment of
thc goods and grants the hirer
an
option
to
purchase them
on
fulfilment
of
certain conditions.
If,
instead
of
granting the hirer
an option to purchase, it imposes an obligation to purchase the
goods it is really a sale
on
credit terms. The hirer is
a
person
who has agrecd
to
buy the goods and therefore has power under
section
25
(2)
of the Sale
of
Goods Act,
1808,
to pass a god title
to
a
purchaser in good faith, although he himself has as yet
no
title to the goods.1
If,
on
the other hand,
it
is
a
true hire-purchase
ngreement, the hirer has not agreed to buy the goods and section
25
(2)
will
not
assist a purported purchaser of the hired goods from
the hirer: he
will
get
no
title to the goods.a
EFFECT
OF
BREACH
OF
THE
AGREEMENT
Like any other bailment, the bailment of hire created by a hire-
purchase agreement may be determined in accordance with its
express provisions.
If,
for example, the agreement provides that
the owner of the goods may terminate the hiring without notice
if the hirer parts with the possession of the goods, the owner
becomes entitled
to
recover possession of the goods when the hirer
places them with an auctioneer for sale.-’
A
bailment is also
terminated by any act of the bailee inconsistent with the con-
tinuance of the bailment even though the terms of the bailment
make
no
express provision
for
termination. Thus where
a
bailee
in
possession of jewels
for
safe custody pledged them for
a
loan
the bailment was terminated and the pledgee liable for conversion.‘
In
the case of
a
hire-purchase agreement, however, termination
of
the bailment must be distinguished from termination
of
the
whole transaction.
“In
a complex contract
of
this nature
it
by
no
means follows that because that part of the contract which
is
a
contract
of
bailment is at an end the other part
of
the
1
Lee
v.
Butler [l893] 2
Q.B.
318,
C.A.
a
Helbv
v.
Mattheros rl896l
A.C.
471.
R.L.
But
n
purchaser from
the
hirer
will
obtain
n
good
title
if
he
buys
the
goods
in
mirket
overt
in accordance
with
8.
22
of
the
Sale
of
Goods
Act,
1893: Bishopsgate Motor
Finance
Corporation Ltd.
v.
Transport Brakes Ltd. [1949]
1
K.B.
322,
C.A.
J
North Central Wagon
Co.
v.
Graham [1950]
2
K.B.
7,
C.A.
4
Hartoa
v.
Hoare (1743) 3
Atk.
44.
498
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