HIRE PURCHASE.

Press, Volume LXVIII, Issue 20490, 8 March 1932, Page 13

HIRE PURCHASE.

LEGAL ASPECTS DISCUSSED. Some legal aspects of the hire-pur-chase system w<Sre dealt with bjr Mr R. L. Ronaldson in a luncheon address to members of the Christchurch Creditmen's Social Club yesterday. Mr L. L. Cordery, president of the club, introduced tho speaker. Mr Ronaldson said that a hirepurchase agreement was a contract entered into by the owner of a chattel and a hirer, who paid rent at fixed intervals and had an option to purchase it if he so desired. It was actually a bailment with an option to purchase. Quoting leading cases on the subject, Mr Ronaldson said it was important to note the distinction between an agreement to purchase and hire-purchase. Under a hire-purchase contract ono party remained the owner of tho chattel even though the other had possession. Thus arose the question of whether in the event of the hirer becoming bankrupt, the chattel was to be used to swell the assets of the bankruptcy. The law took the view that the owner must be responsible for his having allowed the hirer possession of the chattel, on which he might have obtained credit. The chattel, then, would bo regarded as an asset in the estate. To protect him* self against such a loss the owner of a chattel mignt register the agreement by filing a copy ar the Supreme Court office. This was in effect a public notice that the possessor of the chattel was not tho owner.' Certain classes of chattels,'which the Court had recognised to be subject to tho general custom of hire, however, did not require to be registered. Tho speaker dealt with the provisions of the usual hire-purchase agreement, which he said, generally contained clauses providing for the option to purchase, monetary consideration for same, payment of hire rental, payment of rental to dato should the chattel be relumed, a covenant to keep the chattel in repair and, insured against loss or damage by lire, and a reservation of the. right to inspect the chattel. The agreement should make it clear that the hirer has no power to assign his hire or option to' purchase and should allow of the owner terminating the agreement in the event of any.breach on the part of the hirer. The speaker was accorded a hearty vote of thanks.