Parliament Panel Studies Instalment Sales Bill

TDT | Manama

Email: mail@newsofbahrain.com

A bill to govern instalment sales in Bahrain is being studied by Parliament’s Financial and Economic Affairs Committee, with sellers facing licensing rules, clearer contract duties and penalties for unlicensed trade.

The draft law, put forward by MP Hamad Al Doy, would cover goods and services named by the minister in charge of commerce. Property sales would be excluded.

Under the bill, any seller offering instalment sales would need a ministry licence and would have to keep a register of all such deals.

Each sale would require a written contract, with at least two original copies, though electronic contracts would be allowed. The contract would have to list the seller’s trade name, address, commercial registration number and contact details, as well as the buyer’s name, nationality, job, address and contact details.

It would also have to state the product, the cash price, the instalment price, the down payment, the deferred sum, the annual interest rate, how interest is counted, the number and value of instalments, due dates, late-payment penalties, warranty terms and ownership rights during the payment period.

Sellers could ask for guarantees, such as a mortgage or surety, until the full price is paid. They could also take an advance payment when the item is handed over.

Buyers would have the right to settle early and receive a cut equal to the interest due for the remaining period. Any clause denying that right would be void.

The bill would also limit action against buyers who fall behind. A court could not cancel a sale over a missed instalment if the buyer had already met 75 pc of his obligations.

If a sale is cancelled, the seller would have to return the instalments paid, after deducting a sum for use of the item and any damage caused by abnormal use.

A clause making the whole price due after one missed payment would only take effect if the buyer missed at least two instalments in a row.

A seller who breaches the law could face a warning, licence suspension for up to one year, licence cancellation or a fine of up to BD1,000.

Anyone carrying out instalment sales without a licence could face up to one year in jail, a fine of between BD1,000 and BD5,000, or either penalty.