AG, Ministry of Legal Affairs concerned about unfair hire purchase transactions.

The Attorney General’s Chambers and Ministry of Legal Affairs have noted with great regret, the complaints of many in respect of alleged unfair and possibly unlawful conduct in hire purchase transactions.

A press release issued by the Ministry of Legal Affairs states that it is principally because of these reasons that the Government of Guyana enacted a modern Hire Purchase Act which came into force in 2022. The main objective of the Act is to bring greater balance and fairness in the relationship between the hirer and owner which was skewed heavily in favour of the former over the latter, prior to the enactment of the legislation.

Unfortunately, based upon the complaints received, many of which have been circulating on social media, it appears that provisions of the Hire Purchase Act are not properly implemented or complied with, or are being completely ignored.

A copy of this legislation can be obtained from the Parliament Office, Public Buildings at a most affordable price or can be accessed on the Official Gazette website online at https://officialgazette.gov.gy/index.php/publications/1996-extraordinary -gazettes-12th-december-2022-act-no-23-of-2022-the-hire-purchase-act-2022.

Members of the public, more specifically, those who intend to enter into hire purchase agreements are hereby urged to familiarize themselves with 1 the provisions of the Act or to secure legal counsel to do so on their behalf in relation thereto.

A few important sections of the Act are hereby summarized with the view of bringing greater awareness to the protection which they accord to the parties in a hire purchase transaction. Section 3(1) imposes the obligation on the owner, to disclose in writing the cash price before the hire purchase agreement is entered into.

Section 3(4) requires all hire purchase agreements to contain clauses that state the hire purchase price and the cash price of the goods; the amount of instalments required to pay the hire purchase price; and the date each instalment is payable.

Section 5 gives the right to the hirer or buyer to terminate the agreement. Section 6 lists the clauses in agreements which, if included, will be void and therefore unenforceable. These include, among other things: giving an owner or seller the authority to forcibly enter premises to possess goods; denying the hirer or buyer of the right to terminate/determine the agreement; subjecting a hirer or buyer on termination of an agreement to a liability which is greater than the liability provided for under the Act; or clauses which relieve the owner or seller or any person acting on his behalf from liability for any acts or defaults.

Section 10 entitles the hirer or buyer to cancel the agreement within 7 days of signing.

Section 13 entitles a hirer or buyer who has cancelled under section 10 to recover monies paid under the agreement, subject to a restocking fee charged by an owner or seller to a maximum of 10 per cent.

Section 23 states that where the hirer or buyer has paid seventy percent or more of the hire-purchase price or total purchase price, the owner is prohibited from 2 enforcing any right to recover possession otherwise than by action in a court of law.

Section 28 provides for rebate on early payment of five percent per annum or such rate as may be prescribed where the balance of the hire purchase price is paid at least one month before the date it is due, calculated on the amount of such balance for the period in respect of which it was prepaid.

This section also provides that where a balance remains unpaid for more than one month it may attract an interest on such balance at a rate of five percent per annum or such rate as may be prescribed, calculated on the amount of such balance for the period in respect of which it is due.

Section 29 provides that in cases where a hirer or buyer has paid less than seventy percent of the hire purchase price the owner or seller must give at least twenty-one days prior notice of his intention to recover possession before he can enforce his right to recover possession of the goods. Obviously, the above is not exhaustive but is intended merely to highlight a few provisions of the Act which appear to be observed in breach based upon complaints that are in the public domain