- 20 Marks
BCL – L1 – Q40 – Sale of Goods/Hire Purchase
Question
PREMIUM GH. LTD
Premium Gh. Ltd entered into an agreement with the Controller and Accountant General’s Department, by which monies were deducted at source on the salaries of workers who had benefited from its Christmas credit sales scheme by way of Hire Purchase. Unfortunately, Mr. Yaw got infected with a virus and passed away shortly after enjoying the credit sales.
Required:
You are the only law student in the accounts department, and your boss has asked you to:
(a) Explain the nature of a Hire Purchase arrangement and the implication of Mr. Yaw’s death.
(b) In TWO (2) ways, differentiate between a Hire Purchase and a Deferred Payment.
Answer
(a) Hire-purchase is a form of secured credit sale. It is a special system of purchase and sale or of retail business under which goods are delivered to the purchaser immediately on signing the hire purchase agreement, but the price is recovered or collected in future in periodic instalments with regular intervals.
This form of purchase is regularly used by various individuals as a method of purchasing goods on credit while paying them back in agreed instalments.
(b) Difference between hire purchase and deferred payment
| Hire-purchase | Deferred payment |
|---|---|
| Ownership of the goods is vested in the seller until the last instalment is paid. | Ownership of the good is transferred to the buyer immediately he/she makes an initial deposit. |
| Goods are deemed to be on hire. | Goods are the property of the buyer. |
| Under certain conditions, the seller can repossess the goods when the buyer defaults in payment. | The seller cannot repossess the goods when the buyer defaults in payment; the only remedy the seller can take is to sue the buyer. |
- Tags: Contract Law, Deferred Payment, Hire Purchase, Sale of Goods
- Level: Level 1
- Topic: Sale of Goods/Hire Purchase
- Uploader: Samuel Duah