CPT Law Hire Purchase Agreement - Revision Sheet

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CPT Law Hire Purchase Agreement - Revision Sheet

  1. 1. [HIRE PURCHASE AGREEMENT] December 12, 2010 HIRE-PURCHASE AGREEMENTHire purchase agreement is an agreement of installment.For Example: A sells a refrigerator to B with a stipulation that B shall pay A a fixed sum everymonth by way of installments till the full price of the refrigerator is paid.Now till B pays the full amount to A by way of installments, he does not become the owner ofrefrigerator. He can discontinue payments of further installments. In such a case, A takes backthe refrigerator. B has no right to recover installments already paid by him to A because theamount paid by him is adjusted towards the hire charges of refrigerator. This is called a hire-purchase agreement.Note: The buyer agrees to pay the price of the goods in certain installments. The ownership ofthe goods passes to the buyer after the full price of goods is paid. The ownership till then remainswith the seller. Difference between agreement to sell and hire-purchase agreement 1. Agreement to sell is a step to contract 1. Hire-purchase agreement becomes a of sale. sale only after the payment is made in 2. In agreement to sell conveyance of full. goods may take place subsequently. 2. In a hire-purchase agreement 3. In an agreement to sell the buyer can conveyance is immediately transferred take advantage of implied conditions while ownership remains with the and warranties. seller. 4. Agreement to sell is regulated by sale 3. In a hire-purchase agreement the hirer of goods Act,1930 Cannot so claim the benefits of implied conditions and warranties unless it becomes a sale. 4. Hire purchase is regulated by Hire Purchase Act, 1972.vxplain 2 score more-- post your doubts to us at vxplain@gmail.com Page 1

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