Question Tag: Protected Goods

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  • 20 Marks

BCL – May 2016 – L1 – Q4 – Sale of Goods/Hire Purchase

Analyze the implications of paying 60% of a hire purchase price, the legality of seizing a motor, and possible remedies.

Kobi Jones, a porter, buys a tricycle motor to help him cart goods of his clients. The motor was purchased from Agaza Motor Company Limited on a hire purchase agreement. The hire purchase price was GH¢4,500.00 to be paid for in twenty equal instalments. By June 2011, Kobi Jones had paid 60% of the purchase price but was unable to pay the instalment due in July 2011. His plea to be given more time to pay fell on deaf ears. In August 2011, while Kobi Jones was on his way to cart goods for customers, the agents of Agaza Motor Company seized the motor. Kobi Jones thus lost a very lucrative job from which he had hoped to make GH¢2,400.00. Kobi Jones is very upset and comes to you for advice.

a) Explain the effect that the payment of 60% of the purchase price had on the agreement. (6 marks)

b) What does the seizure of the motor by the agents of Agaza Motor Company amount to? (10 marks)

c) What remedies, if any, are available to Kobi Jones? (4 marks)

a)

  • The item (tricycle motor) becomes a protected item. (4 marks)
  • The item can be recovered only by a court order.         (4 marks)

b)

  • The seizure of the item breaches the hire-purchase agreement entered into between Kobi Jones and Agaza Motor Company Limited. (8 marks)

c)

  • Kobi Jones can go to court for an order to reclaim his motorbike. (4 marks)
  • 10 Marks

BCL – Nov 2023 – L1 – Q2b – Sale of Goods/Hire Purchase

Discuss the legal nature of goods under a hire purchase agreement and the implications of repossession by the seller.

Yaro Ltd deals in cars. They let out their brand new car to Nakare on a hire purchase agreement. The total purchase price stood at GH¢86,000 payments to be made in two years. The monthly installment agreed on was GH¢3,600. With almost three quarters of the payment made, Nakare for unknown reasons refused to make further installment payments. Nakare refused to communicate to Yaro Ltd.

Officials of Yaro Ltd, including the accountant, while on a normal duty tour, chanced on the car and took possession of it. Nakare admitted to non-fulfillment of regular installment but argued that the company’s action was in error.

Required: i) With almost three quarters of the total purchase price paid, explain the legal nature of the goods. (5 marks)

ii) What are the possible implications of the actions of the officials of Yaro Ltd under the hire-purchase agreement? (5 marks)

i) The goods become protected goods. (1 mark)

Protected goods are goods which have been let under a hire-purchase agreement, one-half of the price or total price of which has been paid, whether in pursuance of a judgment or otherwise, or tendered by or on behalf of the hirer. (2 marks) In relation to which the hirer has not terminated the hire-purchase agreement or in the case of a hire-purchase agreement, the bailment, by virtue of a right vested in the hirer. (2 marks)

ii) The possible implications of the actions of the officials of Yaro Ltd under the hire-purchase agreement:

  • The owner shall not enforce a right to recover possession of protected goods from the hirer otherwise than by an action (court action).
  • Where the owner recovers possession of protected goods in contravention under the Hire-purchase Act, N.R.C.D. 294, the agreement if not previously terminated, is terminated, and
  • The hirer is released from liability under the agreement and is entitled to recover from the owner, in an action for money had and received, the sums of money paid by the hirer and the security given in respect of the agreement.
  • The guarantor is entitled to recover from the owner in action for money had and received, the sum of money paid under the contract of guarantee or under security given in respect of the agreement.
  • However, the Court may on application by the hirer make an order for the return of the goods to the hirer and for the rescheduling of payments due under the agreement.               (5 marks)

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