New South Wales Consolidated Acts

CREDIT ACT 1984 - SECT 13

13 Contracts for hiring goods

(1) A contract for the hiring of goods shall be deemed to be a credit sale contract if:

(a) the cash price of the goods at the time when the contract for the hiring is made is not more than $20,000 or the goods are, or include, a commercial vehicle or farm machinery in relation to which the cash price is more than $20,000, and

(b) under the contract the person to whom the goods are hired has a right, obligation or option to purchase the goods.

(2) A contract for the hiring of goods shall be deemed to be a credit sale contract if the cash price of the goods at the time the contract is made is not more than $20,000 or the goods are a commercial vehicle or farm machinery and:

(a) the contract provides, or it is reasonably likely having regard to the nature of the goods that the goods are, or are to be, affixed to land or to other goods and the goods are not, or when so affixed would not be, reasonably capable of being re-delivered to the supplier,

(b) before the contract is made, the supplier:

(i) acts in such a manner that the person to whom the goods are hired ought reasonably to infer that the supplier is willing, whether during or within a reasonable time after the period during which the contract is in force, to negotiate the sale to that person of the goods or of goods of a value and description similar to the value and description of the goods to which the contract relates (being a value and description as at the time the contract is made), and

(ii) expects, or in the circumstances ought reasonably to expect, that the person to whom the goods are hired will negotiate the purchase by that person of the goods or of goods of such a similar value and description, or

(c) before the contract is made, it is agreed that the person to whom the goods are hired may continue the contract for a nominal consideration for a period that exceeds, or for two or more periods that together exceed, the period of two years after the expiration of the original term of the contract for the hiring.

(3) Where a contract for the hiring of goods is by this section deemed to be a credit sale contract:

(a) the person from whom the goods are hired is the credit provider under the credit sale contract,

(b) the person to whom the goods are hired is the debtor under the credit sale contract,

(c) the cash price of the goods for the purposes of the credit sale contract is the cash price in relation to the contract for the hiring,

(d) the instalments payable under the contract for the hiring are instalments payable under the credit sale contract,

(e) the property of the supplier in the goods passes under the contract to the person to whom the goods are hired upon delivery of the goods or the making of the contract whichever last occurs,

(f) a mortgage containing the prescribed terms and conditions shall be deemed to have been entered into in writing between the person to whom the goods are hired and the supplier as security for payment to the supplier of the amount payable to the supplier by the person to whom the goods are hired under the contract, and

(g) any provision in the contract for hiring by virtue of which the supplier is empowered to take possession, or dispose of, the goods to which the contract relates is void.

(4) Subsection (2) does not apply to a contract for the hiring of goods that are or might reasonably be expected to be used by the person to whom they are hired for the purpose of a business carried on by that person or by that person and another person or other persons, where the whole or the greater part of the amount payable under the contract is, or might reasonably be expected to be, a loss or outgoing necessarily incurred in carrying on the business.

(5) In this section:

(a) a reference to a contract for the hiring of goods does not include:

(i) a reference to a contract for the hiring of goods to a body corporate, or

(ii) a reference to a contract for the hiring of goods to the extent that the financial accommodation provided in relation to the goods is not credit within the meaning of this Act, and

(b) "cash price", in relation to a contract for the hiring of goods:

(i) where at the time the contract is made the goods are available for purchase for cash from the person from whom the goods are hired-means the lowest price at which the person to whom the goods are hired might have bought the goods from the first-mentioned person for cash,

(ii) where at the time the contract is made the goods are reasonably available for purchase for cash but are not reasonably available for purchase for cash from the person from whom the goods are hired-means the price at which, at that time, the person to whom the goods are hired might reasonably have bought goods of that kind for cash, or

(iii) where at the time the contract is made the goods are not reasonably available for purchase for cash-means the amount that is the reasonable value of the goods at that time.