Victorian Consolidated Legislation

Credit Act 1984 - SECT 13

Contracts for hiring of goods

13. Contracts for hiring of 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 him 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 him
        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 him 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) 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 that are or might
        reasonably be expected to be used by the person to whom they are hired
        wholly or mainly for the purpose of a business carried on by him or by
        him and another person or persons and 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; 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.