HP questions

We recently received an email recently from someone who had a number of questions about hire purchase. I think it’s worth answering them in public. These are questions that are facing many, MANY people who feel the need to buy things on what the law refers to as “deferred payments”.

Q1. If you have purchased an item from a furniture shop A at hire purchase to meet a specific need, let's say high level programming or CAD Engineering, but you later find out that the machine you brought does not meet system requirements for that software, are you not entitles to cancel that hire purchase contract and return the tool back to the retailer?

For instance, let's say I walk into Furniture shop to buy a computer to do drafting and design, but do not know which computer is the best. I talk to the sales person, who recommends a Toshiba Satellite with AMD E1 Processor and I buy it on hire purchase. After only two days I find out that the computer cannot run AUTO CAD, and I find another one elsewhere at computer shop B, same price but with capabilities. As a consumer, don't I have the right to return the computer since it does not satisfy my needs, cancel the contract and buy a rather better one from shop B?

No. You have no rights that can help you in this situation. Well, probably not.

When you buy something on hire purchase you are throwing yourself out of a plane without a parachute. Yes, you might fall on a huge pile of feathers but it’s very, VERY unlikely.

Firstly the Hire Purchase Act almost certainly offers you no protection because it only covers purchases up to a total value of P4,000 and I bet the total credit price of what you bought was more than that.

Secondly you signed an agreement that commits you to paying for the item you selected. Unless you specifically stated that you wanted a device that could run AutoCAD then you now have no right to demand that. There’s a fundamental rule that says that when an agreement is put in writing, then no other verbal, informal agreements matter. It’s only what’s in writing that matters. The hire purchase agreement you signed is the only thing that is relevant. The lesson is to make specific requirements very clear before you buy something. And then get it in writing.

Q2. If I purchase a computer from furniture shop A, hire purchase and, just two days later, realise that the computer was overpriced for it's performance and see a cheaper one at shop B. Do I not have the right to kindly return the computer back to shop A, request the manager to cancel the contract, and go for shop B even though I will not be getting my installment back?

For instance, let's say I walk into Furniture Shop A to buy a good computer. Mr. Assistant B convinces me to buy an HP 255 HD 250GB, 2GB RAM for P4500.00. After hire purchase, and initial installment of say P300.00. After one day, I find out that the computer is annoyingly slower and slowing down my progress. I walk into computer shop B, and find a Toshiba Satellite HD 750GB, 3GB RAM for P4100. That means better performance for less. In that case, don't I have the right to return the computer back to shop A in kind, and go for shop B with the loss of my installment?

Again, the problem is that you agreed to buy that computer. You didn’t agree to buy that computer subject to certain conditions, such as it being the best computer you could buy. You only have a right to return the computer if there’s a manufacturing fault with it or if it’s not “of merchantable quality” which the Consumer Protection Regulations defines as meaning it’s not “fit for the purposes for which commodities of that kind are usually purchased, as it is reasonable to expect in light of the relevant circumstances”.

In short, you have no right to change your mind. The lessons are. Do your research to identify the best things to buy. Then shop around to get the best deal. And NEVER buy on impulse.

Q3. I buy a computer from furniture shop A on hire purchase, and I have a job. Within a month I lose my job and can no longer keep up with the payments. Can I not be entitled to return the computer back to the furniture shop and have the contract terminated without any complications?

Sorry, it’s too late. Again, you signed an agreement and (correct me if I’m wrong) but nobody held a gun against your head when you did so, did they?

I’m sorry to sound unsympathetic but is it the store’s fault that you lost you job? You signed an agreement that got you a computer and which said you would make a series of payments to the store. Have they broken the agreement or have you?

Yes, you can return the computer to the store but you must expect there to be complications. Lots of them. You’ll no longer have a computer but once they’ve auctioned the now second-hand item for a fraction of it’s original price, you’ll probably still owe the store more than the original cash price of the item. Don’t forget that the total hire purchase cost of the computer was at least double the cash price of the device.

I’ve seen all of these scenarios before. The lesson is always the same. Instead of buying something on hire purchase, either buy something second-hand or save up for it instead. Do almost anything instead of buying on hire purchase.