Hire purchase system originated in U.K. Hentry moore a Piano maker introduced this system in 1846. Hire purchase is a method of sale .In this system the goods are let out on hire by a creditor (usually a finance company) to the hire purchase customer (hirer) The buyer is required to pay an agreed amount in periodical instalment. The ownership of the property remains with creditor and passes on to hirer on the payment of the last instalment.
Hire purchase is based on an agreement in writing.The buyer takes possession of the goods at the time of entering into contract.Each instalment is treated as hire chargesOwnership transfer from the buyer to the seller on the payment of the last instalment.The purchaser has the right to terminate the agreement any time before the property passes.
1, To purchase with rebate2To terminate agency3To appropriate payment4 to assaign and transmitTo refund on seizure of goods
1 To comply with the agreement2To take care of goods3 Not to make unathorised use.4 To give information
Right to terminate the agreementTo recover possession.To recover damage.
To supply a copy of the agreement.To supply all necessary information.
Hire purchase is based on an agreement.It has to be in writing and signed by both parties.The agreement must contain1, Description of the goods2 Hire purchase price of the goods3 The date of commencement of the agreement.4 The number of instalments ,amount, and due date.
Through sub sec (1) of Sec 6 of the banking regulation act of 1949 the Govt. of India has permited Banks to engage in hirepurchase business.RBI isued following guide lines.1 Banks shall not themselves under take the HP business2 Banks can set up subsidiaries for this.
Hire purchase and credit salesHire purchase and instalment salesHire purchase and leasing
The hire purchase act of India 1972 defines a hire purchase agreement as an agreement under which goods are let on hire and under which the hirer has an option to purchase them in accordance with the terms of agreement under which, Payment is to be made in instalments over a specified period. Possession is transferred to the purchaser at the time of entering into the contract Ownership in goods transfer to the purchaser on payment of the last instalment. Each instalment is treated as hire charges so that if default is made in payment of any one instalment the seller is entitled to take away the goods. The hirer is free to return the goods without being required to pay any further instalment falling due after the return.