CHAPTER 399
HIRE-PURCHASE ACT

Arrangement of Sections

   Section

PART I
PRELIMINARY

   1.   Short title

   2.   Application

   3.   Interpretation

PART II
GENERAL PROVISIONS RELATING TO AGREEMENTS

   4.   Application of Part II

   5.   Provisions as to agreements

   6.   Supply of copies to purchaser

   7.   Provisions to be included in agreements

   8.   Invalidity of certain provisions

   9.   Purchaser entitled to certain information

   10.   Removal of goods

   11.   Removal of goods from Zambia

   12.   Conditions and warranties implied in agreements

   13.   Appropriation of payments made in respect of agreements

   14.   Negotiable instruments

   15.   Right of purchaser to be reinstated after return of goods to seller

   16.   Right of purchaser to pay outstanding balance of purchase price.

   17.   Passing of ownership

   18.   Right of purchaser to terminate Hire-Purchase agreement

   19.   Special provisions as to installation charges

   20.   Disposal of goods upon termination of agreement

   21.   Powers of the court

   22.   Waiver of rights by purchaser

   23.   Agreements binding on liquidator or trustee of owner

   24.   Bankruptcy of purchaser

PART III
FINANCIAL PROVISIONS RELATING TO AGREEMENTS

   25.   Initial payments and periods for repayment

   26.   Time limit for certain actions

   27.   Control of purchase price

PART IV
MISCELLANEOUS

   28.   Exemptions

   29.   Saving

      SCHEDULE

AN ACT

to make provision for the regulation of Hire-Purchase agreements and certain installment sales, and for other purposes incidental to the foregoing.

[8th March, 1957]

Act 34 of 1956,

Act 14 of 1959,

Act 16 of 1969,

Act 13 of 1994,

GN 439 of 1963,

GN 336 of 1964,

GN 497 of 1964,

SI 462 of 1969,

SI 257 of 1973,

SI 63 of 1976.

PART I
PRELIMINARY

1.   Short title

This Act may be cited as the Hire-Purchase Act.

2.   Application

The provisions of this Act shall not apply to any agreement under which the Government is the seller or, subject to the provisions of sub-section (2) of section 29, to any agreement made before the commencement of this Act.

[S 2 am by GN 439 of 1963.]

3.   Interpretation

   (1) In this Act, unless the context otherwise requires—

“agreement” means a Hire-Purchase agreement or an installment sale agreement;

“cash price”, in relation to any goods, means the price at which the goods may be purchased outright for cash;

“goods” means any movable property which may lawfully form the subject-matter of a contract of hire or sale;

“Hire-Purchase agreement” means—

      (a)   any contract whereby goods are sold subject to the condition that notwithstanding delivery of the goods the ownership in such goods shall not pass except in terms of the contract and the purchase price is to be paid in two or more installments;

      (b)   any contract which provides for the hiring of goods whereby the hirer has the right—

      (i)   to purchase such goods after two or more installments have been paid in respect thereof; or

      (ii)   after two or more installments have been paid in respect thereof, to continue or renew from time to time such hiring at a nominal rental, or to continue or renew from time to time the right to be in possession of the goods, without any further payment or against payment of a nominal amount periodically or otherwise;

whether or not the agreement may at any time be terminated by either party or one of the parties;

      (c)   any other contract which has, or contracts which together have, the same import as either or both the contracts defined in paragraph (a) or (b) of this definition, whatever form such contract or contracts may take;

“installment” includes any cash amount payable in terms of paragraph (a) of sub-section (1) of section 25 and, where no cash amount is payable in terms of that paragraph, the amount of any deposit or initial payment payable under an agreement;

“installment sale agreement” means any contract of sale under which—

      (a)   the ownership in the goods sold passes either before or upon delivery;

      (b)   the purchase price is to be paid in installments, of which one or more are payable after delivery;

and

      (c)   the seller is entitled to the return of the goods sold if the purchaser fails to comply with any provision thereof;

and includes any other contract which has, or contracts which together have, the same import, whatever form such contract or contracts may take;

“purchase price” means the total sum payable by the purchaser under an agreement, including any sum payable by him by way of a deposit or other initial payment, or credited or to be credited to him under such agreement on account of any such deposit or payment, whether that sum is to be or has been paid to the seller or to any other person or is to be or has been discharged by a payment of money or by the transfer or delivery of goods or by any other means, but excluding any sum payable—

      (a)   as compensation or damages for breach of the agreement;

      (b)   forlicence or registration fees;

      (c)   for any insurance premiums which have been paid to insure the goods sold under the agreement;

      (d)   by way of interest upon installments which are in arrear; or

      (e)   in respect of any installation as defined in sub-section (2) of section 19;

“purchaser” means the person who, in terms of any agreement, is the purchaser or hirer, as the case may be, and includes his successors in title;

“seller” means the person who, in terms of any agreement, is the seller or the lessor, as the case may be, and includes his successors in title;

“writing”—

      (a)   in relation to an agreement in a form the provisions of which this Act requires shall be set out in printed or typed letters, means printing or typewriting; and

      (b)   in relation to an agreement which is not in a form such as is referred to in paragraph (a), means writing as defined in section 3 of the Interpretation and General Provisions Act.

   (2) References in sections 5, 7 and 25 to “contain”, “set out” and “provide” shall, without derogation from the provisions of paragraph (a) of sub-section (1) of section 5, be construed as references to “contain expressly in writing”, “set out expressly in writing” and “provide expressly in writing” respectively.

   (3) Where a seller has agreed that any part of the purchase price may be discharged otherwise than by the payment of money, any such discharge shall, for the purposes of this Act, be deemed to be a cash payment of that part of the purchase price.

[S 3 am by Act 14 of 1959.]

PART II
GENERAL PROVISIONS RELATING TO AGREEMENTS

4.   Application of Part II

Except for the provisions of sections 5, 23 and 24, which shall apply to every agreement or, as the case may be, to the parties to every agreement, the provisions of this Part shall not apply to an agreement under which the purchase price exceeds the sum of three kwacha.

[S 4 am by Act 14 of 1959.]

5.   Provisions as to agreements

   (1) Every agreement shall—

      (a)   be reduced to writing and signed by or on behalf of all the parties to the agreement;

      (b)   contain a statement of the cash price.

   (2) If an agreement does not comply with the provisions of sub-section (1)—

      (a)   the goods which are the subject of the agreement shall be deemed to have been sold to the purchaser—

      (i)   without any reservation as to the ownership of the goods or, as the case may be, without any stipulation as to the seller's right to the return of the goods; and

      (ii)   on credit at a price, payable in the same manner as that stipulated in the agreement, which is twenty-five per centum less than the purchase price; and

      (b)   the seller shall not be entitled to enforce any contract of suretyship, indemnity or guarantee relating to the agreement except, in the case of an agreement which has been the subject of a cession or assignment, against a surety or guarantor who was the original seller under the agreement:

Provided that if, in any action arising out of the agreement, the court is satisfied that the purchaser would not, but for the provisions of this sub-section, have been prejudiced by the fact that the agreement does not comply with the provisions of sub-section (1), the court may, subject to such conditions that it thinks just and equitable to impose, order the parties to carry out the terms of the agreement as if the agreement had complied with the provisions of sub-section (1).

[S 5 am by Act 14 of 1959.]

6.   Supply of copies to purchaser

   (1) It shall be the duty of the seller to hand or send by registered post to the purchaser a copy of any agreement entered into between them as soon as possible after it has been entered into. If a seller fails so to supply such a copy, the purchaser may hand or send to him by registered post a written request for the supply of such a copy, and any seller who, within fourteen days of the receipt of such a request, fails to hand such a copy to the purchaser, or send it to him by registered post, shall be guilty of an offence.

   (2) Any person who is guilty of an offence under the provisions of sub-section (1) shall be liable to a fine not exceeding one thousand five hundred penalty units or, in default of payment, to imprisonment for a period not exceeding thirty days.

[S 6 am by Act 13 of 1994.]

7.   Provisions to be included in agreements

   (1) Every agreement shall set out—

      (a)—

      (i)   the amount of the purchase price of the goods;

      (ii)   the amount paid or to be paid by the purchaser under the provisions of paragraph (a) of sub-section (1) of section 25;

      (iii)   the amount of each of the installments by which the purchase price is to be paid;

      (iv)   the mode of payment of such installments;

      (v)   the date or mode of determining the date on which each installment is payable; and

      (vi)   the rate of interest, which shall not exceed the maximum rate of interest referred to in sub-section (2) of section 8, chargeable upon an installment in arrear;

      (b)   a description of the goods let, sold or delivered under the agreement and of any goods delivered to the seller under the provisions of paragraph (a) of sub-section (1) of section 25 which is sufficient to identify them;

      (c)   the terms as to the reservation and passing of ownership of the goods or as to the seller's right to the return of the goods, as the case may be.

   (2) No seller shall, on or after the third anniversary of the commencement of this Act, use any form of agreement the provisions of which, whatever their nature, are not set out in clearly legible printed or typed letters of substantially the same size.

   (3) If an agreement does not comply with the provisions of sub-section (1) or, on or after the 8th March, 1960, with the provisions of sub-section (2)—

      (a)   the goods which are the subject of the agreement shall be deemed to have been sold to the purchaser—

      (i)   without any reservation as to the ownership of the goods or, as the case may be, without any stipulation as to the seller's right to the return of the goods; and

      (ii)   on credit at a price, payable in the same manner as that stipulated in the agreement, which is twenty-five per centum less than the purchase price; and

      (b)   the seller shall not be entitled to enforce any contract of suretyship, indemnity or guarantee relating to the agreement except, in the case of an agreement which has been the subject of a cession or assignment, against a surety or guarantor who was the original seller under the agreement:

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