CONTRACT LAW — Hire Purchase — Non-Signature by Owner — Effect on Enforceability
Principle Statement
Under section 2(2)(a) of the Hire Purchase Act, parties to a hire purchase agreement are required to sign the agreement. Where only the appellant signed and the respondent never signed, the agreement does not comply with the Act. The respondent, having seized the rig in violation of the provisions of the Hire Purchase Act, cannot recover the outstanding installment.
Ratio Decidendi (Source)
Per Onnoghen, JSC, in Civil Design Construction Nig. Ltd v. SCOA Nigeria Limited (2007) NLC-123-216-2001(SC) at pp. 27–28; Paras C–D.
"Under section 2(2)(a) of the Hire Purchase Act parties to a hire purchase agreement are, among other requirements required to sign the agreement of hire. In the instant case, it is not disputed that only the appellant signed exhibit D2 and that the respondent never signed same … The respondent having seized rig No. LA 8509 WD in violation of the provisions of the Hire Purchase Act cannot recover the outstanding installment of N100,000.00."
Explanation / Scope
A hire purchase agreement must be signed by both parties to be valid under the Hire Purchase Act. Where the owner fails to sign, the agreement does not comply with the statutory requirements. A party who violates the Act by seizing goods improperly cannot rely on the Act to recover outstanding payments. This principle enforces strict compliance with the formal requirements of the Hire Purchase Act.
