Explanation of hirer’s rights to statutory rebate
5 Explanation of hirer’s rights to statutory rebate
The explanation of a hirer’s right to a rebate of terms charges pursuant to section 11 on payment of the net balance due to the owner to be given to the hirer pursuant to the provisions of the First Schedule of the Act and to be printed in type known as 10 Point Roman capitals as specified therein is as follows: —
UNDER SECTION 11 OF THE ACT, THE HIRER UNDER A HIRE-PURCHASE AGREEMENT IS ENTITLED TO COMPLETE THE PURCHASE OF THE GOODS BY PAYING OR TENDERING TO THE OWNER THE NET BALANCE DUE TO THE OWNER UNDER THE AGREEMENT. WHEN DOING SO THE HIRER WILL BE ENTITLED TO A “STATUTORY REBATE” OF THE TERMS CHARGES, CALCULATED IN ACCORDANCE WITH THE DEFINITION OF THAT TERM IN SECTION 2 OF THE ACT AS FOLLOWS.
THE AMOUNT OF STATUTORY REBATE SHALL BE CALCULATED IN ACCORDANCE WITH THE FOLLOWING FORMULA —
WHERE (IN EACH CASE)
“C” = THE AMOUNT OF TERMS CHARGES
“N” = THE NUMBER OF COMPLETE MONTHS OF THE AGREEMENT STILL TO GO
“T” = THE TOTAL NUMBER OF MONTHS IN THE AGREEMENT
INSTALMENTS IN THE EARLY STAGES OF REPAYMENT CONTAIN A LARGER PROPORTION OF THE TERMS CHARGES THAN INSTALMENTS PAID LATER ON TOWARDS THE COMPLETION OF AN AGREEMENT. THIS IS BECAUSE THE GREATER PART OF THE PRINCIPAL AMOUNT IS OWING IN THE EARLY STAGES OF AN AGREEMENT. THIS IS DEMONSTRATED IN THE FOLLOWING EXAMPLES WHERE, FOR EXAMPLE, $260 TERMS CHARGES ARE INCLUDED IN AN AGREEMENT TO BE PAID IN 12 MONTHS BUT THE AGREEMENT IS COMPLETELY PAID OFF WITH
9 MONTHS STILL TO GO — 260 x 9 x 10 = $150 REBATE 12 x 13 (PAY $110
TERMS
CHARGES)
6 MONTHS STILL TO GO — 260 x 6 x 7 = $70 REBATE
12 x 13 (PAY $190
TERMS
CHARGES)
3 MONTHS STILL TO GO — 260 x 3 x 4 = $20 REBATE
12 x 13 (PAY $240
TERMS
CHARGES)
The statute text is free to read above. View subscription options to unlock the case-law research tools for each provision.