(1) Where -
(a) goods are let under a hire-purchase agreement, whether made before or after the commencement of this Act, and
(b) the owner recovers possession thereof or an order is made by the court under paragraph (a) of subsection (4) of section 13 of the Principal Act for the specific delivery thereof to the owner,
then, subject to subsection (3) of this section, the liability of a guarantor under a contract of guarantee in relation to the agreement shall not exceed the amount, if any, which the hirer would have been liable to pay under section 5 of the Principal Act if he had determined the agreement under that section at the time of the recovery or the making of the order, as the case may be.
(2) Subject to subsection (3) of this section, any provision in a contract of guarantee in relation to a hire-purchase agreement whereby the guarantor, after the recovery of possession of the goods let under the agreement or the making of an order by the court under the said paragraph