HL Deb 06 May 1974 vol 351 c347

Facts. K (in England) agrees with L (an individual) to bail goods to L for a period of three years certain at £2,000 a payable quarterly. The agreement contains no provision for the passing of the property in the goods to L.

Analysis. This is not a hire-purchase agreement (see paragraph (b) of the definition of that term in section 184(1)), and is capable of subsisting for more than three months. Paragraphs (a) and (b) of section 15(1) are therefore satisfied, but paragraph (c) is not. The payments by L must exceed £5,000 if he conforms to the agreement. It is true that under section 101 L has a right to terminate the agreement on giving K three months' notice expiring not earlier than eighteen months after the making of the agreement, but that section applies only where the agreement is a regulated consumer hire agreement apart from the section (see subsection (1)). So the agreement is not a consumer hire agreement, though it would be if the hire charge were say £1,500 a year, or there were a "break" clause in it operable by either party before the hire charges exceed £5,000. A similar result would follow if the agreement by K had been a hiring agreement in Scotland.

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