Whenever goods are bought they must be as described, fit for purpose and of satisfactory quality (i.e. not inherently faulty at the time of sale). Goods are of satisfactory quality if they reach a standard that a reasonable person would regard as satisfactory, taking into account the price and any description.

In general the onus is on purchasers to prove that goods do not conform to contract but during the first six months after purchase it is for the retailer to prove that the goods were of satisfactory quality and then after six months and until the end of the limitation period (6 years) it is for the consumer to prove.

Unlike other forms of credit, such as a loan or credit card where the goods you buy belong to you straight away, with hire purchase or conditional sale you do not legally own the goods until you have paid back all the money that you owe under the Agreement. This means that you cannot modify or sell the goods without the lender’s permission and the lender can take the goods back if you fail to keep up your payments. You will be liable for any damage caused to the goods during the contract period.

Under a hire purchase agreement you pay an initial deposit followed by monthly payments (apportioned to the money you borrow plus interest) over an agreed period and at the end of the period you have the option of owning the goods out right, although the lender may require you to pay a fee.

Conditional sale agreements are similar to hire purchase and you will own the goods once all your instalments have been paid but there will be no extra fee to pay at the end of the agreement.

For advice on Sale of Goods and Hire Purchase please contact:

Paul Addison on 01934 637 909 e-mail addison@powellslaw.com, or
Rabina Ahmed on 01934 637 913 e-mail ahmed@powellslaw.com.