Forms Of Hire And Purchase Agreements

What are the forms of hire purchase agreements?

Answer (1)

Team Legistify

  • Sector-1, Noida

Hire-purchase agreements are of two forms.

1. In the first form the goods are purchased by the financier from the dealer and

i. the financier obtains a hire-purchase agreement from the customer,

ii. under which the customer becomes the owner of the goods

iii. on payment of all the installments of the stipulated hire and exercising his option to purchase the goods on payment of a nominal price.

iv. The owner gets his money from the financier, who recovers the cost from the customer.

2. In other form

i. the customer purchases the goods and he executes a hire-purchase agreement with a financier,

ii. under which he remains in possession of goods, subject to payment of amount paid by the financier on his behalf to the owner.

iii. The financier gets a right to seize the goods in the event of non-fulfillment of conditions of hire-purchase agreement by the customer.

Answered on 28 Sep 2018

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