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U.S. DEPARTMENT OF COMMERCE

HARRY L. HOPKINS, Secretary

BUREAU OF FOREIGN AND DOMESTIC COMMERCE . H. ENGLE, Acting Director

Comparative Low Series

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A Monthly World Review

THE DIVISION OF COMMERCIAL LAWS

Guerra Everett, Chief

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NEW IMMIGRATION REQUIREMENTS OF CUBA . .

From the Office of the American Commercial Attaché, Habana COMMERCIAL ARBITRATION IN GREECE

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By Commercial Attaché K. L. Rankin, Athens

Page

107

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By Assistant Commercial Attaché Harold M. Randall, Buenos
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Subscription: $1 a year; single copies, 10 cents. Make remittances only to Superintendent of Documents, Washington, D. C.

Published with the approval of the Director of the Budget

Legal Information is a Business Necessity

Comparative Law Series

THE DIVISION OF COMMERCIAL LAWS
Guerra Everett, Chief

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SUPERINTENDENT OF DOCUMENTS, WASHINGTON, D.C.

U. S. DEPARTMENT OF COMMERCE HARRY L. HOPKINS, Secretary BUREAU OF FOREIGN AND DOMESTIC COMMERCE N. H. ENGLE. Acting Director

Comparative Law Series

THE HIRE PURCHASE ACT O F GREAT

BRITAIN

By J. H. Barkmeier, Division of Commercial Laws

The Hire-Purchase Act of July 29, 1938, which became effective on January 1, 1939, applies only to England and Wales since it is specifically provided that the Act shall not extend to Scotland and Northern Ireland. This law constitutes the first statute dealing specifically with hire-purchase agreements as the previous legal principles1 governing such agreements were derived from decisions of the courts applying principles relating to contracts derived from the common law, the Sale of Goods Act, the Factors Act and other pertinent statutes.

The Act is limited in its application to hire-purchase agreements and credit-sale agreements under which the hire-purchase price and the total purchase price, respectively, do not exceed £100, except in the case of motor vehicles or railway rolling stock when the maximum sum within the scope of the Act is £50, and in the case of livestock, £500.

"Hire-purchase agreement" is defined by the Act as: "An agreement for the bailment of goods under which the bailee may buy the goods or under which the property in the goods will or may pass to the bailee, and where by virtue of two or more agreements, none of which by itself constitutes a hire-purchase agreement, there is a bailment of goods and either the bailee may buy the goods, or the property therein will or may pass to the bailee, the agreements shall be treated for the purposes of this Act as a single agreement made at the time when the last of the agreements was made."

The most common form of instalment agreement in use in England provides for the delivery of possession of the goods to the hirer, with the property (title) in the goods remaining in the owner, and for the hirer's option either to purchase by completing the payment of rental instalments or to terminate the hiring by returning the goods to the owner.

The definition given for a credit-sale agreement is: "An agreement for the sale of goods under which the purchase price is payable by 5 or more instalments." Under this type of sale, corresponding to our budget plans, title to the goods passes to the purchaser when the agreement is entered into, but the price is payable in 5 or more instalments.

The "hire-purchase price" is defined as: "The total sum payable by the hirer under the hire-purchase agreement in order to complete the purchase of the goods to which the agreement relates, exclusive of any sum payable as a penalty or as compensation or damages for a 1See Trade Promotion Series No. 153, "Trading Under the Laws of Great Britain" (1935), page 55, obtainable from the U. S. Superintendent of Documents, Washington, D. C., or any of the District Offices of the Bureau. Price 15 cents.

breach of the agreement." Thus if the cash selling price of the goods is £90, the hire-purchase charges £10 and the hirer has the option to purchase the piano for 10s., the total hire-purchase is £100 10s. and the transaction would not come within the provisions of the Act.

The "total purchase price" is defined as: "The total sum payable by the buyer under a credit-sale agreement, exclusive of any sum payable as a penalty or as compensation or damages for a breach of agreement.

PROSPECTIVE HIRER OR PURCHASER MUST KNOW CASH PRICE

Before any agreement is entered into the owner must state in writing to the prospective hirer, otherwise than in the agreement, the cash price of the goods. This requirement is deemed to have been sufficiently complied with if at the time the hirer has inspected the goods, tickets or labels clearly stating the cash price were attached to or displayed with the goods, or if the hirer has selected the goods from a catalogue, price list or advertisement which clearly states the cash price.

In order that the buyer may not have an opportunity to say that he did not see a ticket or advertisement, it has been stated that it will probably be advisable to hand the hirer a memorandum quoting the cash price and include in the hire-purchase application form an acknowledgment by the hirer that such a memorandum has been received by him.

The penalty for noncompliance with the requirement to make known the cash price is very severe, as the owner then is not entitled to enforce the agreement or any contract of guarantee relating thereto or any right to recover the goods from the hirer, and no security given by the hirer or guarantor in respect of money payable is

enforceable.

Before making any credit-sale agreement under which the total purchase price exceeds £5, the seller is under similar obligation, as the owner of hire-purchase goods, to make known the cash price of the goods, and subject to the same penalties for failure to do so.

FORM OF AGREEMENT

The requirements as to form include: (a) a note or memorandum of the agreement signed by the hirer and by or on behalf of all other parties to the agreement; (b) a statement of the hire-purchase price and of the cash price of the goods, the amount of each installment and the date each is to be paid, and a list of the goods sufficient to identify them; (c) a notice, which is at least as prominent as the rest of the contents of the memorandum, in the terms prescribed in the Schedule to the Act, setting forth the rights of the hirer to determine the agreement and the restrictions of the owner's right to recover the goods; and (d) a copy of the note or memorandum must be sent to the hirer within 7 days of the making of the agreement. The penalty for failure to comply with any of the above requirements is the loss of any right to enforce the agreement or recover the goods, but the court may, if it is satisfied that the buyer has not been prejudiced, dispense with the requirements of (b), (c) and (d) subject to any conditions that it thinks fit to impose.

In the case of credit-sales where the total purchase price exceeds £5, there must also be (a) a note or memorandum signed by the buyer

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