Akta Sewa Beli 1967
Applies to: Federal Act — see s 1 (Short title and application) · Official text ↗
- Defines key terms like 'hirer', 'owner', 'dealer', and 'hire-purchase agreement' (s 2).
- Mandates specific contents for hire-purchase agreements, including cash price, deposit, and terms charges (s 4C).
- Requires owners to serve copies of agreements and insurance policies on hirers within set timeframes (s 5).
- Implies conditions and warranties regarding the quality and fitness of goods (s 7).
- Allows hirers to complete purchases early by paying the net balance due (s 14).
- Restricts owners from repossessing goods without proper notice and limits their recovery amounts (s 16, s 18).
- Sets minimum deposit requirements and penalties for non-compliance (s 31, s 46).
What this law is
The Hire-Purchase Act 1967 (Akta Sewa Beli 1967) is numbered Act 212 in the Laws of Malaysia. Where it applies is set out in section 1 (Short title and application).
Its long title, as printed in the official text: An Act to regulate the form and contents of hire-purchase agreements, the rights and duties of parties to such agreements and to make provisions for other matters connected therewith and incidental thereto.
Read every section, the amendment history and the official copy on our law library page for this Act.
How the Act is arranged
- Part I — Preliminary (ss 1–3)
- Part II — Formation and contents of hire-purchase agreements (ss 4–6)
- Part IIA — Option to hirer (ss 6A–6C)
- Part III — Protection of hirers and guarantors (ss 7–8)
- Part IV — Hirers (ss 9–20)
- Part V — Guarantors (ss 20A–25)
- Part VI — Insurance (ss 26–29)
- Part VII — General (ss 30–48)
- Part VIII — Powers of enforcement (ss 49–56B)
- Part IX — Regulations, etc. (ss 57–58)
Part titles are from the official arrangement of sections.
Time limits in this Act
| What | Limit | Section |
|---|---|---|
| Serve copy of hire-purchase agreement on hirer and guarantors | within twenty-one days after the making of a hire-purchase agreement | s 5(1) |
| Serve copy of insurance policy or statement on hirer | within seven days of receipt of the policy | s 5(3) |
| Notice period before repossessing goods (if instalments paid are 75% or less of cash price) | not less than twenty-one days after the service of the notice | s 16(1) |
| Serve notice on hirer and guarantors after taking possession of goods | within twenty-one days after the owner has taken possession | s 16(3) |
| Hirer's time to require re-delivery or sale of repossessed goods | within twenty-one days after the service on him of the notice referred to in subsection 16(3) | s 18(1)(a) |
| Serve notice of public auction on hirer | not less than fourteen days from the date the said auction is to be held | s 18(4)(a) |
Offences and penalties
| Offence | Penalty (as written in the Act) | Section |
|---|---|---|
| Any person guilty of an offence under this Act for which no penalty is expressly provided (body corporate) | fine not exceeding one hundred thousand ringgit, and for a second or subsequent offence, to a fine not exceeding two hundred and fifty thousand ringgit | s 46(1)(a) |
| Any person guilty of an offence under this Act for which no penalty is expressly provided (not a body corporate) | fine not exceeding twenty-five thousand ringgit or to imprisonment for a term not exceeding three years or to both, and for a second or subsequent offence, to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding five years or to both | s 46(1)(b) |
| Owner enters into hire-purchase agreement without obtaining minimum deposit | guilty of an offence under this Act | s 31(1) |
| Owner, dealer, agent fails to deliver goods and does not refund deposit | guilty of an offence under this Act | s 31(3) |
| Owner selling repossessed goods without the required auction notice or, for a private sale below his estimate of value, without first offering the hirer the option to buy at that price | guilty of an offence under this Act (penalty under s 46 where none is expressly provided) | s 18(4) |
Laws cited on this page
| Act 212 | Hire-Purchase Act 1967 Akta Sewa Beli 1967 | PDF · Official ↗ |
Each law links to our mirror page: a copy of the official text captured on a known date, its version history, and the official source. Law library →
Key sections
| Provision | What it says, in plain words |
|---|---|
| s 1 | The Act applies throughout Malaysia and only to hire-purchase agreements for goods specified in the First Schedule, entered into after the Act came into operation. |
| s 2 | Defines terms such as 'hirer', 'owner', 'dealer', 'consumer goods', and 'statutory rebate' to clarify who is covered and how financial calculations are made. |
| s 4C | Requires hire-purchase agreements to specify the start date, number of instalments, cash price, deposit, and other charges in a tabular form; agreements missing these details are void. |
| s 5 | Owners must serve a copy of the agreement on the hirer and guarantors within 21 days of making it, and provide insurance policy details within 7 days of receipt. |
| s 7 | Implies warranties that the hirer will have quiet possession and that the goods are free from third-party charges, and conditions that goods are of merchantable quality and fit for purpose. |
| s 10 | If a hirer has multiple agreements with the same owner and makes a partial payment, they can choose which agreement the payment applies to; otherwise, it applies to the oldest agreement. |
| s 14 | Hirers can complete the purchase early by paying the net balance due, which is calculated by subtracting statutory rebates for terms charges and insurance from the original balance. |
| s 16 | Owners cannot repossess goods for payment defaults unless specific conditions are met, such as two successive defaults and serving a notice at least 21 days before taking possession. |
| s 18 | After repossession, the hirer may within 21 days of the s 16(3) notice require re-delivery of the goods or their sale to a cash buyer he introduces; the owner cannot recover more than the limits in s 18(2); and before selling, the owner must give 14 days' notice of a public auction, or, for a private sale below his own estimate of value, first offer the goods to the hirer at that price (s 18(4)). |
| s 21 | Clarifies that a guarantor's liability continues even if goods are repossessed, but they cannot be liable for more than the hirer, and they have rights to recover moneys paid. |
| s 31 | Requires a minimum deposit of one-tenth of the cash price unless otherwise prescribed, and mandates that deposits be collected at signing and refunded if goods are not delivered. |
| s 46 | Sets penalties for offences under the Act, including fines and imprisonment for individuals and higher fines for bodies corporate, with increased penalties for repeat offences. |
Worked examples
Facts. Ahmad hires a car under a hire-purchase agreement. After paying 10 instalments, he wants to buy the car outright. The agreement has fixed terms charges.
The law. Under s 14(1), Ahmad can complete the purchase by paying the net balance due. Under s 14(2)(a), the net balance is the original balance minus amounts paid and the statutory rebate for terms charges and insurance if cancelled.
Outcome. Ahmad pays the calculated net balance to the owner and becomes the full owner of the car, ending the hire-purchase agreement (s 14).
Facts. Siti hires a laptop. She misses two consecutive payments. The owner wants to repossess the laptop. The total instalments paid so far are 60% of the cash price.
The law. Under s 16(1), the owner must serve a written notice in the prescribed form and wait at least 21 days before taking possession, as the payments are less than 75% of the cash price and there have been two successive defaults.
Outcome. The owner serves the notice. If Siti does not pay within the 21-day period, the owner can repossess the laptop, but must then serve another notice within 21 days of taking possession (s 16(3)).
Facts. Ravi is the guarantor for his sister's hire-purchase of a washing machine. The sister defaults, and the owner repossesses the machine. The owner claims the remaining balance from Ravi.
The law. Under s 21(2), the guarantor's liability continues even after the owner takes possession of the goods. However, under s 21(3), the guarantor is not liable to any further or other extent than the hirer.
Outcome. Ravi is liable for the remaining balance up to the amount the hirer would be liable for, but cannot be charged more than that (s 21).
Examples are simplified illustrations with invented names; real cases turn on their own facts.
Questions & answers
What must be included in my hire-purchase agreement?
Your agreement must specify the start date, number of instalments, amounts, payment times, description of goods, and their address (s 4C(1)(a)). It must also show the cash price, deposit, freight, insurance, and terms charges in a table (s 4C(1)(c)). If these details are missing, the agreement is void (s 4C(2)).
Can I buy out my hire-purchase agreement early?
Yes, you can complete the purchase early by giving written notice and paying the net balance due (s 14(1)). The net balance is calculated by subtracting statutory rebates for terms charges and insurance from the original balance (s 14(2)).
What happens if I miss payments — can the owner take the goods back?
Where instalments paid are not more than 75% of the total cash price, the owner may repossess for non-payment only after two successive defaults and a written notice in the Fourth Schedule form giving at least 21 days (s 16(1)); above 75%, he also needs a court order (s 16(1A)–(1B)). These steps are not needed if there are reasonable grounds to believe the goods will be removed or concealed, which the owner must prove (s 16(2)). Within 21 days after repossession he must serve the Fifth Schedule notice on you and every guarantor, or his rights under the agreement cease (s 16(3), (6)). You may then require re-delivery or a sale to your cash buyer, and recover any surplus (s 18).
Do I have to pay a deposit?
Yes, unless a different minimum is prescribed, the owner must collect a deposit of at least one-tenth of the cash price at the time of signing (s 31(1), s 31(1A)). If the owner fails to deliver the goods, they must refund the full deposit (s 31(1B)).
What if the goods are faulty or not as described?
There is an implied condition that the goods are of merchantable quality and fit for their purpose, unless you examined them or they are second-hand with a specific disclaimer (s 7(2), s 7(3)). You also have an implied warranty of quiet possession and that the goods are free from third-party charges (s 7(1)).
What are the penalties for breaking the law?
Individuals can face fines up to RM25,000 or imprisonment up to 3 years, or both, for a first offence (s 46(1)(b)). Companies can face fines up to RM100,000 for a first offence (s 46(1)(a)). Penalties are higher for repeat offences (s 46(1)).
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Sources
Related
Consumer rightsConsumer Protection Act 1999Contracts Act 1950Enforcing a judgment