ICANBusiness LawSale of Goods and Hire Purchase2021

Babatunde entered into a hire-purchase agreement with Kazaure Motors Ltd for the acquisition of a commercial delivery van (motor vehicle). The terms of the agreement are as follows: - Cash price of the van: ₦8,000,000 - Total Hire-Purchase Price: ₦10,000,000 - Initial deposit paid: ₦2,000,000 - Monthly installment: ₦400,000 Under the provisions of the Hire Purchase Act, Cap H4, Laws of the Federation of Nigeria (LFN) 2004, what is the minimum cumulative total amount that Babatunde must have paid before Kazaure Motors Ltd is legally restricted from repossessing the vehicle without a court order?

A₦5,000,000
B₦6,000,000CORRECT
C₦4,800,000
D₦8,000,000
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Why the answer is B, and why the others tempt you.
Under Section 9(1) of the Hire Purchase Act, Cap H4 LFN 2004, once the 'relevant proportion' of the hire-purchase price has been paid, the owner cannot repossess the goods except by court action. For motor vehicles, the relevant proportion is defined as three-fifths (60%) of the total hire-purchase price. Calculating 60% of ₦10,000,000 gives ₦6,000,000. (Note: One-half or 50% applies to goods other than motor vehicles).
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