Amendments Nos. 181 and 182 are related and may be discussed together. Is that agreed? Agreed.
SECTION 77.
I move amendment No. 181:
In page 42, to delete lines 44 to 47 and in page 43, to delete lines 1 to 5 and substitute the following:
"77.—(1) A consumer hire agreement shall be made in writing and signed by the hirer and by or on behalf of all other parties to the agreement and a copy of the agreement shall be—
(a) handed personally to the hirer by the owner upon the making of the agreement, or
(b) delivered, or sent by prepaid registered post to the hirer by the owner within 10 days of the making of the agreement.".
These amendments redraft into a new format the provisions of section 77, and there is a minimum alteration to the content. Under orders from the Attorney General the amendments put the provisions in a more logical sequence. The content, scope and thrust remain unaltered, but they are placed in better order.
Do the amendments refer to straightforward consumer hire agreements and is there no element of purchase?
There is no element of purchase and the hirer never owns and never gets to own the subject matter of the agreement.
It is important to have the matter covered, otherwise people may rent a good for, say, a primary period of £10 per month and forever at, say 3p per month and in so doing avoid the provisions of the Hire Purchase Acts completely if possible.
Amendment agreed to.
I move amendment No. 182:
In page 43, to delete lines 6 and 7, and substitute the following:
"(2) A consumer hire agreement shall—
(a) contain a statement that the hirer has a right to determine the agreement, and"
Amendment agreed to.
I move amendment No. 183:
In page 43, paragraph (d), to delete line 19 and substitute "(ii) the cash price of the goods,".
This amendment is proposed because the cash price, as defined in section 2, is more appropriate to use in this instance than the purchase price. The Director of Consumer Affairs suggested the amendment as apparently he has had some dealings which illustrate the need for the cash price of the goods rather than the purchase price.
Amendment agreed to.
I move amendment No. 184:
In page 43, paragraph (d), between lines 35 and 36, to insert the following:
"(viii) a statement of the cost of early termination of the agreement and any conditions relating to such termination, and
(ix) clear details of the costs and penalties to be applied in the case of breach of contract.".
This deals with the consumer hire agreements. The nature of these is such that the goods do not change ownership over the period of hire. There are occasions when the consumer may have, for one reason or another, to terminate the hiring agreement into which he has entered. On such occasions the consumer involved may be in for a shock when he discovers the cost of such termination because it can be quite high in comparison to the selling price of the goods or their value, and he may not have known that.
The purpose of the amendment is to ensure that the consumer will be fully aware of the cost of early termination, much in the same way as the early payment of a debt, and will be in a better position to decide beforehand whether a hire or purchase would be best to his needs. This addresses the point raised by Deputy McDowell on this matter. A consumer who is not certain that he can and will remain within a hiring agreement for its duration would be ill advised to embark on one. This, of course, is a matter of choice.
This proposal arose following information submitted to us by the Director of Consumer Affairs regarding the charges being raised in relation to the termination of consumer hire agreements. It is therefore proposed that the amendment will provide for a statement of the cost of early termination of the agreement and any conditions relating to such termination, and clear details of the costs and penalties to be applied in the case of breach of contract.
In section 61 we had this 50 per cent rule. Is a formula applied in the case of these higher schemes regarding the cost of early termination? Is it a Central Bank assessment or who is doing this?
No. There is no set formula. We wanted to deal here with a situation where there is no knowledge of the cost of termination, and the fact that in some cases the cost of termination could exceed the cost of the goods. The Director of Consumer Affairs gave particular examples which had been brought to his attention. He said that people who hire in a consumer hire arrangement are not aware of the cost of termination.
Under section 78 they are entitled to determine a consumer hire agreement giving notice. Is that right?
If they get notice. Yes.
It does seem that Deputy Bruton is right. For instance, if I sign a consumer hire agreement for ten years, theoretically, if I throw back the goods after a week they can still come after me for nine years' payments.
That is what Deputy Bruton raised under the matter of hire purchase.
He was asking about the hire purchase formula, but he is saying that there is no formula here. So you are left with what could be huge legal liabilities.
It is only a hiring agreement, you are not actually purchasing anything.
I accept that but if I hire a television, as many people do, simply renting their TVs, if I sign on for ten years——
Three years.
——and I hand it back after one month, am I entitled to claim all the payments for ten years? There is no surrender formula built into the statute.
If you contract to hire goods for a certain period of time, in my experience the supplier has in the past sought to recover all the payments due for the entire duration of the agreed hiring period whether that was one, three or ten years. They certainly make a stab at going to the courts to recover their money. There may be legitimate reasons as to why the person hiring the goods was not able to continue. Therefore, the Minister should try to insert some out clause in the legislation which would determine the right of a consumer to give reasonable and adequate notice of their wish to end the hiring agreement. They should be entitled to do so.
That they would have the right to terminate?
Yes.
They would always have the right to terminate.
If they have entered a contract to hire a piece of equipment for ten years, the person who gives out the goods on hire expects to be paid for ten years, regardless of what happens to his or her customer. That is the problem, so we should try to stitch in an "out" clause.
The cost of termination is what the Deputy is really talking about.
Unlike section 61, section 78 has no clause spelling out the ceiling on the liability for the consumer.
Let us look at it from another angle. If you enter a consumer hire arrangement for a television set, you will never own it. Therefore, the condition of the article when you terminate, give back, or the creditor seeks to take it back, can have a bearing, surely.
Yes, but firstly it could be a second-hand article the day you get it. A TV rental service will not necessarily give you a brand new set. Secondly, your granny can give you a TV set for Christmas and you could then be stuck with three years' rental repayments——
And you want to terminate.
—— and there is no formula——
No, there is no formula.
——unlike in hire purchase. You cannot say that you want to compound it to a certain amount and that you do not want to pay any more than a certain amount.
Buying to purchase is different from hiring to purchase.
I accept that.
Therefore, what condition you keep it in is relevant because, eventually, you will own it anyway, and if you damage it along the way you are responsible. However, in a consumer hire agreement, in effect, if you damage the product or something happens to it, you have damaged a product which you would neve have owned.
That is right. I fully accept that, Minister, but what we are querying here is the fact that, though you may not have the same formula in hire purchase, obviously——
That is what I am trying to say.
——it seems a bit strange that you cannot be caught by a consumer contract of huge length in circumstances where, if you had bought on hire purchase you could have a let out of some sort.
It obviously could not be the same formula as hire purchase.
I agree, but some kind of surrender formula seems to be fair. Otherwise, to take Deputy Flood's case, if somebody signs a ten year agreement for a television set there is no way out.
I will certainly look at that. The formula, however, could not be the same as the hire purchase formula because in that case you are purchasing the article eventually, whereas this time you only have its usage. Deputy Flood's point, as I saw it, was the shock of the baldness of the termination. This amendment seeks to allow the consumer to make a choice between hire purchase or consumer hire. They would see the difference between the cost and termination cost of each method and could then decide which to opt for. That was the purpose of inserting this amendment, though while the amendment is one thing, the questions the Deputy raised are another matter and certainly need to be looked at.
Is the amendment agreed to?
Clearly the amendment has come to the Director's attention, but the wider issue of whether there is any formula on termination is one we would have to look at.
Amendment agreed to.
I move amendment No. 185:
In page 43, paragraph (e), line 36, to delete "or" where it firstly occurs and substitute "on".
That is a typographical error.
Amendment agreed to.
I move amendment No. 186:
In page 43, paragraph (e), line 36, after "for" to insert "and copy of".
This proposal is self-explanatory and provides for statutory notice to be given to the consumer on any copy of the agreement given to him as well as on the proposal forms. It came to us via the Director of Consumer Affairs.
Amendment agreed to.
Section 77, as amended, agreed to.
NEW SECTION.
I move amendment No. 187:
In page 44, before section 78, to insert the following new section:
"Application of sections 66 to 75 to consumer hire agreements.
78.—Where goods are let under a consumer hire agreement, the provisions of sections 66 to 75 shall apply to the letting agreement as if it were a hire purchase agreement and in every such agreement there is an implied warranty that the goods are free, and will remain free, from any charge or encumbrance not disclosed, before the agreement is made, to the person taking the goods and that that person will enjoy quiet possession of the goods except so far as it may be disturbed by any person entitled to the benefit of any charge or encumbrance so disclosed.".
This proposal reinserts the old section 76 which was removed from Part 6 by virtue of amendment, and replaces it within the appropriate part of the Bill here relating to consumer hire agreements. The text is taken from the Sale of Goods and Supplies of Services Act, 1980. It is interesting to note that this section was originally added to the 1980 Act while the Bill was proceeding through the Oireachtas. We were trying to find out who proposed it but we just did not have time. I think it was through a Seanad amendment. It is designed to bring into the ambit of the Act, goods let on hire to a person dealing as a consumer, as distinct from hire purchase.
Amendment agreed to.