HIRE-PURCHASE ACT
Act · Trade
An Act regulates hire-purchase agreements where goods are delivered to a hirer who pays in instalments and gains ownership upon full payment. It targets hire-purchase companies, consumers, businesses, vehicle dealers, and courts handling disputes. This aims to protect consumers from unfair terms and ensure transparent disclosure of costs.
HIRE-PURCHASE ACT
What Is This Policy?
An Act regulating hire-purchase agreements under which goods are delivered to a hirer who pays instalments and acquires ownership only upon making all payments.
Who Does It Target?
Hire-purchase companies and finance institutions Consumers and businesses purchasing goods on hire-purchase Vehicle dealers and household goods retailers Courts hearing hire-purchase disputes
What Does It Aim to Achieve?
Protect consumers from unfair hire-purchase terms, ensure transparent disclosure of the total cost of hire-purchase agreements, and define the rights of both parties.
Key Features
Disclosure Requirements: The hire-purchase price, cash price, and deposit must be clearly stated in the agreement. Minimum Deposit: Prescribes minimum deposit requirements for hire-purchase transactions. Hirer Protections: Hirers have the right to return goods after paying a prescribed minimum proportion of the price. Repossession Rules: Goods cannot be repossessed without court order once the hirer has paid more than one-third of the hire-purchase price.
Current Status
Rollout Stage: Active Coverage: Nationwide hire-purchase sector Beneficiaries: Consumers purchasing on credit; hire-purchase providers Funding: Not applicable
How to Access
All hire-purchase agreements must be in writing and signed by both parties Total cost of credit must be clearly disclosed Hirers must receive a copy of the agreement Application method: Hire-purchase contracts governed by Act — no public application.
Important Terms
Hirers do not own the goods until final payment — seller retains title until then Seizure of goods once one-third paid requires court order Defective goods in hire-purchase attract same remedies as outright sale
Official Resources
Website: https://www.justice.gov.ng Contact: Federal Ministry of Justice
Legal Framework
Enacted under the legislative authority of the National Assembly pursuant to Section 4 of the 1999 Constitution. Operates alongside the Sale of Goods Act, the Consumer Protection Council Act 2004, the Federal Competition and Consumer Protection Act 2018, and the Companies and Allied Matters Act 2020.