General Guarantee argued, both in the high court and the court of appeal, that in the absence of a signature on the HP agreement, the rogue had not taken the car under that agreement. Instead, it said, all that the dealer had done was lend her the car and by selling it she was stealing it. Both courts roundly rejected this argument. The judges decided that commercial reality was such that the dealer would only have handed an expensive car over after having been told by General Guarantee that it had entered into the HP agreement. There is no reason why an HP agreement has to be made in writing, although in practice most of them are.
English law allows most contracts, except for the sale of land, to be made orally.
The decision does reduce one of the risks of car buying. Dealers often hand over cars before all the formalities are completed. General Guarantee's persistence in taking the case to the court of appeal reflected the belief in the finance industry that the Hire Purchase Act normally only applies after a written agreement is signed. Now that that has been effectively scotched, many innocent purchasers will be saved from losing their vehicles. Richard Colbey is a barrister.