Consequences of contravening the two-thirds rule in hire purchase agreement

Where goods have been let under a hire-purchase agreement and two-thirds of the hire purchase price has been paid the owner shall not enforce any right to recover possession of the goods from the hirer otherwise than by suit.

Explain three consequences of contravention of the above provision by the owner.

Consequences of contravening the two-thirds rule:-

  • The hire-purchase agreement if not previously terminated shall terminate.
  • The hirer shall be released from all liability under the agreement and shall be entitled to recover from the owner by suit all sums paid.
  • A hirer shall be entitled to recover from the owner by suit all sums paid by him



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