• 5 Marks

BL – Nov 2014 – L1 – SB – Q6b – Hire Purchase and Consumer Credit Transactions

State and explain two pieces of information required in a hire purchase memorandum under the Hire Purchase Act of 1965.

One of the innovations introduced into the hire purchase contract by the Hire Purchase Act of 1965 is the preparation of a memorandum evidencing the agreement.
Required:
State and explain any TWO pieces of information that a hire purchase memorandum must contain.
(Total 5 Marks)

  • Description of the Goods:
    The hire purchase memorandum must contain a clear and detailed description of the goods being hired. This ensures that both parties are aware of the specific item involved in the agreement and prevents any ambiguity or misunderstanding about the goods under contract.
  • Cash Price and Hire Purchase Price:
    The memorandum must state both the cash price (the amount the goods would cost if bought outright) and the total hire purchase price (the total cost the hirer will pay, including interest, if the goods are purchased on hire). This transparency allows the hirer to understand the financial commitment they are entering into and compare the costs of buying versus hiring.
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