12Implied condition as to merchantable quality in hire-purchase agreements
(1)In section 8(1) of the principal Act (which provides that certain conditions and warranties shall be implied in hire-purchase agreements to which that Act applies), paragraph (d) (which relates to an implied condition that the goods shall be of merchantable quality) shall have effect subject to the following provisions of this subsection, that is to say.—
(a)for the words " except where the goods are let as second hand goods, and the note or memorandum of the agreement made in pursuance of section two of this Act contains a statement to that effect " there shall be substituted the words " except in so far as the condition referred to in (this paragraph is excluded by virtue of subsection (3A) or subsection (3B) of this section " , and
(b)the words " as regards defects of which the owner could not reasonably have been aware at the time when the agreement was made, or " shall be omitted.
(2)The following subsection shall be substituted for section 8(2) of the principal Act (whereby a condition is implied where the hirer makes known the particular purpose for which the goods are required):—
“(2)Where the hirer, whether expressly or by implication.—
(a)has made known to the owner, or to a servant or agent of the owner, the particular purpose for which the goods are required, or
(b)in the course of any antecedent negotiations has made that purpose known to any other person by whom those negotiations were conducted, or to a servant or agent of such a person,
there shall be an implied condition that the goods shall be reasonably fit for that purpose.
Section 24(2) of the Hire-Purchase Act 1964 shall apply for the purposes of this subsection as it applies for the purposes of Part I of that Act”.
(3)At the beginning of subsection (3) of section 8 of the principal Act there shall be inserted the words " Subject to the following provisions of this section " ; and after that subsection there shall be inserted the following subsections:—
“(3A)Where under a hire-purchase agreement goods are let as second-hand goods and—
(a)the agreement contains a statement to that effect, and a provision that the condition referred to in subsection (1)(d) of this section is excluded in relation to those goods, and
(b)it is proved that before the agreement was made the provision in the agreement so excluding that condition was brought to the notice of the hirer and its effect made clear to him,
that condition shall not be implied in the agreement in relation to those goods.
(3B)Where under a hire-purchase agreement goods are let as being subject to defects specified in the agreement (whether referred to in the agreement as defects or by any other description to the like effect), and—
(a)the agreement contains a provision that the condition referred to in subsection (1)(d) of this section is excluded in relation to those goods in respect of those defects, and
(b)it is proved that before the agreement was made those defects, and the provision in the agreement so excluding that condition, were brought to the notice of the hirer and the effect of that provision was made clear to him,
that condition shall not be implied in the agreement in respect of those defects.”