Hire Purchase & Equipment Lease
7. Default under the Contract
Authors: Staff Legal Eagle
Firm / Chambers:
Last updated: 23 Jul 2015
- Under a hire purchase agreement the buyer may have rights to the item even if the buyer is responsible for breaching the contract by defaulting on repayments.
- Generally if the buyer has paid for more than a third of the purchase price of the item the items will be classified as protected goods and the seller will need a court order before they can repossess the items.
- If the seller repossesses items that are protected goods without your consent and without a court order you may be entitled to a refund of all the money that had previously been paid to the seller under the contract.
- If the items are located in your home or on private property the seller will need a court order to enter the premises and repossess the items even if you have paid less than a third of the total purchase price.
- For an equipment hire agreement the lessee (person borrowing the item) has no rights to retain the items after the time specified in the contract has expired.
- Once the time expires the lessee must either return the goods immediately to the owner or apply for a renewal of the lease if they wish to continue using the items.
- The two parties may include a clause in the lease agreement that specifies a certain sum be made payable to the owner if the lessee is late returning the goods or if the lessee returns the goods in an unreasonable state.
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