Most people who buy a motor car conform to the definition of “consumer” in the Sale of Goods and Supply of Services Act 1980.
3.—(1) In the Act of 1893 and this Act, a party to a contract is said to deal as consumer in relation to another party if—
( a ) he neither makes the contract in the course of a business nor holds himself out as doing so, and
( b ) the other party does make the contract in the course of a business, and
( c ) the goods or services supplied under or in pursuance of the contract are of a type ordinarily supplied for private use or consumption.”
A large number of those consumers buy their car on “Hire Purchase” or “Credit Finance”from a Finance Company.
Provision is made in the Consumer Credit Act 1995 for such purchases.
By Section 76 (2) of the Consumer Credit Act 1995, the following are terms of hire purchase agreements with consumers:
a. That the goods are of merchantable quality;
b. That the goods are reasonably fit for the purpose for which the consumer required them, (In the case of a motor car, to provide reliable, durable, defect-free motoriing to the consumer);
c. That the goods should be of satisfactory quality;
Section 76 reads in part:
(2) Where the owner lets goods under a hire-purchase agreement in the course of a business, there is an implied condition that the goods are of merchantable quality within the meaning of section 14 (3) of the Sale of Goods Act, 1893, except that there shall be no such condition—
( a ) as regards defects specifically drawn to the hirer’s attention before the agreement is made, or
( b ) if the hirer examines the goods before the agreement is made, as regards defects which that examination ought to have revealed.
(3) Where the owner lets goods under a hire-purchase agreement in the course of a business and the hirer, expressly or by implication, makes known to the owner or the person by whom any antecedent negotiations are conducted, any particular purpose for which the goods are being hired, there shall be an implied condition that the goods supplied under the agreement are reasonably fit for that purpose, whether or not that is a purpose for which such goods are commonly supplied, except where the circumstances show that the hirer does not rely, or that it is unreasonable for him to rely, on the skill or judgment of the owner or that person.
(4) An implied condition or warranty as to quality or fitness for a particular purpose may be annexed to a hire-purchase agreement by usage.”
By Section 80 of the Consumer Credit Act 1995 representations made by the salesman selling the car are deemed to be representations made by or on behalf of the Finance Company.
Section 80 reads:
80.—Where goods are let under a hire-purchase agreement to a hirer, the person, if any, by whom the antecedent negotiations were conducted shall be deemed to be a party to the agreement and that person and the owner shall, jointly and severally, be answerable to the hirer for breach of the agreement and for any misrepresentations made by that person with respect to the goods in the course of the antecedent negotiations.”
No provision has been made under the Consumer Credit Act 1995 for the determination of disputes under the Finance agreement to be by Arbitration, whereas the standard Society of Irish Motor Industry (“SIMI”) form of agreement does contain an arbitration clause.
Consequently, disputes under Credit Finance Agreements are, in principle, resolvable in litigation. The consumer is not obliged to go to arbitration.
The consumer has a choice of suing the Finance Company and the motor dealer who “sold” the car to the consumer or just the Finance Company.