Hire Purchase & Equipment Lease
4. Responsibilities of the Seller
Authors: Staff Legal Eagle
Firm / Chambers:
Last updated: 23 Jul 2015
- The law imposes various obligations on the seller under a hire purchase agreement. The seller must:
- provide exclusive use and possession of the items to the buyer;
- ensure the items are fit for the purpose that the buyer has purchased them for;
- not engage in any misleading, deceptive or unconscionable conduct relating to the transaction;
- ensure the items being sold are as described;
- ensure the items are free from any charges or encumbrances by a third party at the time of the transaction;
- ensure the items are free from any defects;
- honour any warranties that apply to the items; and
- provide a statement to the buyer informing them that goods are second hand if that is the case.
- In return the buyer must make regular and timely repayments in accordance with the contract. In the event of a default the seller must:
- provide the buyer with at least 30 days notice declaring their intention to repossess due to default if the seller intends to seize the items; and
- provide the buyer with a notice giving them the option to reinstate the agreement.
- If the agreement is terminated the buyer may be liable for any loss suffered by the seller unless the value of the repossessed items is sufficient to cover the buyers’ liability.
- If the value of the items is greater than the amount needed to cover the sellers’ loss the buyer will be entitled to a refund.
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