HP clauses

When a vehicle is subject to a hire purchase agreement, you as a trader are entering into an agreement with the finance company. The consumer is then entering into the hire purchase agreement with the finance company.

The agreement between you and the finance company will be subject to an extensive contract, the finance company's terms and conditions. We often need to review these agreements as finance companies quite often attempt to rely on the clauses.

The agreements all vary however one of the clauses which may be included, states if the consumer fails to accept/take possession of the vehicle or cancels within 14 days from the date of taking purchase, you as a trader agreed to take back possession of the vehicle and rescind the agreement! Simply, the consumer can decide they have had a change of heart.

Usually, where the above clause is not within the agreement, if the consumer chooses to cancel with the finance company under the “14 day cooling off period” our position would be, we are not subject to these conditions. You the trader, have the agreement with the finance company only, not the consumer therefore the consumer additional rights under (Consumer Credit Act 1974) is not applicable to your agreement with the finance company. However, the vehicle still must be as described, satisfactory quality and fit for purpose for the requirements of the agreement between you and the finance company.

Lawgistics members can contact the legal team for advice on contracts and any clauses they are unsure of.

Authors: Roxanne Bradley

Published: 14 Jun 2018


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