Assignment (15 Marks)

Group PBA7A

Arul is the owner of a shop selling all types of uniforms. Recently he entered into a contract with Mr Ronald, the PIBG chairman of a local primary school. Mr Ronald had ordered 100 jackets on behalf of the PIBG. He told Arul that the jackets have to be made of cotton, which was more comfortable to wear in hot weather. However when the jackets were delivered, he realized that they were made of polyester and not cotton. Advise Mr Ronald, as to his rights under the Sales of Goods Act 1950.

Group PCA7A

Treating the question on its own, answer the following:

a) Ani’s husband, Osman, bought a car on hire purchase by getting a loan from Sykt. Kewangan Maju. The agreement was for a period of 48 months with a monthly instalment of RM520. After paying for a period of 24 months, Ani’s husband suddenly died. Can Ani proceed with the hire purchase agreement?

b) What happen if Osman does not wish to continue with the hire purchase agreement? What should he do?

c) Can Hamidon, Osman’s friend, take over the hire purchase agreement when Osman is no longer interested in continuing with the hire-purchase agreement?

Instruction:

1. Maximum two (2) students per group.

2. Format of assignment: font: Arial, font size: 12, 1.5 paragraph spacing.

3. Assignment must contain the following:

Cover page: Course title and students’ matric number only.

Content: Question for the assignment, issues, relevant provision of Companies

Act, elements/principle of law, relevant decided cases, application of law to the

question, remedy (if any), conclusion.

Footnotes/References must be included.

4. Date of submission:19th October 2010 (tuesday) by 7 p.m.

5. No mark will be awarded to those who fail to submit the assignment on the stipulated date.

UNIVERSITI TEKNOLOGI MARA

FACULTY OF ADMINISTRATIVE SCIENCE & POLICY STUDIES

BUSINESS LAW(LAW 503)

PREPARED BY

2007118375 (AM225)2007118333 (AM225)

There are three issues arise from this case:

a) Ani’s husband, Osman, bought a car on hire purchase by getting a

loan from Sykt. Kewangan Maju. The agreement was for a period of

48 months with a monthly instalment of RM520. After paying for a

period of 24 months, Ani’s husband suddenly died. Can Ani

proceed with the hire purchase agreement?

Issue 1:

Whether Ani can proceed with the hire purchase agreement after her husband,

Osman died?

Law

The Hire Purchase Act 1967, provides several provisions concerning the rights

and the duties of hirers under hire-purchase agreements .

STATUTORY RIGHTS OF HIRER

Under Section 13. Rights by Operation of Law. If the hirer is dead, the hirer’s

right, title and interest under the hire-purchase agreement will pass to his

personal representative by operation of law. Upon the transfer, the personal

representative shall comply with the provisions of the hire-purchase agreement.

“by operation of law" indicates that a right or liability has been created for a

party, irrespective of the intent of that party, because it is dictated by existing

legal principles. For example, if a person dies without a will, his heirs are

determined by operation of law. Similarly, if a person marries or has a child after

his or her will has been executed, the law writes this pretermitted spouse or

pretermitted heir into the will if no provision for this situation was specifically

included. Adverse possession, in which title to land passes because non-

owners have occupied it for a certain period of time, is another important right

that vests by operation of law.

Apply

From the cases, Ani is the personal representative of Osman by operation of

law.

Conclusion

Since Osman died, her wife, Ani can proceed with the hire purchase

agreement.

b) What happen if Osman does not wish to continue with the hire

purchase agreement? What should he do?

Issues 2

Whether can Osman terminate the hire purchase agreement or not?

Law

Section 15. Right to terminate the agreement.

- Under Section 15 (1),the hirer has right to terminate the hire purchase

agreement at any time by returning the goods to the owner during

ordinary business hours at the owner’s ordinary business place

specified in the agreement for that purpose.

- Under Section 15(5)(a), upon the termination , the hirer may require the

owner to sell the goods to any person introduced by the hirer who is

prepared to buy the goods for cash at a price agreeable to the owner.

- Under Section 15(5)(b), if at the time of returning the goods to the owner,

the value of the goods is more than the balance outstanding, the hirer is

entitled to the difference.

If at the time of returning, the value of the goods is less than the balance

outstanding, the owner is entitled to the difference.

Apply

From this case

Conclusion

c) Can Hamidon, Osman’s friend, take over the hire purchase

agreement when Osman is no longer interested in continuing with

the hire-purchase agreement?

Case 3

Whether can Osman’s friend, Hamidon continue the hire purchase agreement

or not?

Law

Section 12. Right to assign hirer’s Rights under Hire Purchase Agreement

- Initially, the hirer is not the owner of the goods. Therefore, he has no

right to assign, any right over the goods to another person.

- Under Section 12 (1) , however, the hirer may assign the right, title and

interest under a hire-purchase agreement to another person (assignee)

with the consent of the owner.

- Under Section 12(1)If the owner is unreasonably withhold the consent,

then the hirer may assign his right, title and interest without the consent

of the owner.

- Under Section 12(3), however, the hirer must first apply to the High Court

for an order declaring that the consent of the owner has unreasonably

been withheld.

“consent is unreasonably withheld means:

a) That the owner fails or refuses to give his consent without sufficient

cause/reason.

b) Under Section 12(2), if the owner requires any payment or

consideration for his consent to such an assignment

c) Under Section 12(3), when the High Court is satisfied to declare

that the owner has unreasonably withhold his consent, upon the

application by the hirer.

d) Refer to Section 12 (5), when the owner requires other

or additional guarantors to guarantee the assignee’s obligation,

whereas:

i) The same guarantors who have guaranteed the hirer’s

obligation have agreed to guarantee the assignee’s obligation

under the assignment; or

ii) The assignee has furnished the same number of guarantors

to guarantee his obligation under the assignment as was furnished

by the hirer to guarantee his obligation under the hire-purchase

agreement. Refer to Section 12(5).

- On the other hand, in granting the consent to the assignment, the owner

may stipulate that all defaults incurred by the hirer under the hire-

purchase agreement shall be made good .Refer to Section 12(4)

- Owner may also require the hirer and the assignee (under Section 12(4))

a) To execute and deliver to the owner an assignment in a form

approved by the owner, whereby the assignee agrees:

i) To be personally liable to pay the installments remaining

unpaid, and

ii) To perform and observer all other stipulations &conditions

of the hire-purchase agreement during the residue of the

term, and

iii) To indemnify the hirer in respect of those liabilities.

b) To pay the reasonable costs incurred by the owner in stamping or

registering the assignment agreement

Apply

Conclusion

REFERENCES