5Buy-back contracts regarded as pledge and loan

5 Buy-back contracts regarded as pledge and loan

5 Buy-back contracts regarded as pledge and loan

If a person receives goods under a contract of sale where the seller has the right to buy back the goods, then for the purposes of this Act—

(a) the person receiving the goods is taken to be lending money on the security of the goods as pawned goods, and

(b) the price at which the goods are to be sold under the contract is taken to be the amount lent, and

(c) the difference between the amount lent and the price at which the goods may be bought back is taken to be the interest payable.

s 5: Am 2005 No 62, Sch 1 [3].