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    Hire Purchase

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    Aditya
    Hire purchase is a transaction where goods are purchased through installment payments, with possession transferred immediately but ownership remaining with the seller until final payment. Key characteristics include installment payments, seller retaining ownership until final payment, and ability to repossess goods if payments are defaulted on. The Hire Purchase Act of 1972 defines a hire purchase agreement and provides certain rights to the buyer, such as minimum notice for repossession and return of excess payments if the amount paid exceeds the total price.

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    Hire Purchase

    Uploaded by

    Aditya
    2K views8 pages
    Hire purchase is a transaction where goods are purchased through installment payments, with possession transferred immediately but ownership remaining with the seller until final payment. Key characteristics include installment payments, seller retaining ownership until final payment, and ability to repossess goods if payments are defaulted on. The Hire Purchase Act of 1972 defines a hire purchase agreement and provides certain rights to the buyer, such as minimum notice for repossession and return of excess payments if the amount paid exceeds the total price.

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    Hire purchase is a transaction where goods are purchased through installment payments, with possession transferred immediately but ownership remaining with the seller until final payment. Key characteristics include installment payments, seller retaining ownership until final payment, and ability to repossess goods if payments are defaulted on. The Hire Purchase Act of 1972 defines a hire purchase agreement and provides certain rights to the buyer, such as minimum notice for repossession and return of excess payments if the amount paid exceeds the total price.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    2K views8 pages

    Hire Purchase

    Uploaded by

    Aditya
    Hire purchase is a transaction where goods are purchased through installment payments, with possession transferred immediately but ownership remaining with the seller until final payment. Key characteristics include installment payments, seller retaining ownership until final payment, and ability to repossess goods if payments are defaulted on. The Hire Purchase Act of 1972 defines a hire purchase agreement and provides certain rights to the buyer, such as minimum notice for repossession and return of excess payments if the amount paid exceeds the total price.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 8

    HIRE PURCHASE

    Rajesh
    Sharma
    MBA 0741
    Meaning of Hire
    Purchase
    Hire purchase means a transaction where goods are
    purchased and sold on the terms that:-
    1. Payment will be made in installment
    2. The possession of the goods is given to the buyer
    immediately.
    3. The ownership remains with the vendor till thr last
    installment is paid.
    4. The seller can repossess the goods in case default in
    payment of any installment.
    5. Each installments in the hire purchase is treated as
    higher charges till the laser installment is paid.
    Characteristics of Hire
    1.
    Purchase
    The payment is to be made by the hirer (Purchaser)
    to the hiree, usually the vendor, in installments over
    a specified period of time.
    2. The possession of the goods is transferred to the
    buyer immediately.
    3. The property in the goods remains with the vendor
    (hiree) till the last installment is paid. The ownership
    passes to the buyer (hirer) when he pays all
    installments.
    4. The hiree or the vendor can repossess the goods in
    case of default and treat the amount received by
    way of installments as hire charged for that period.
    5. The installments in hire purchase include interest as
    well as repayments of principal.
    6. Usually, the hiree charges interest on flat rate.
    Legal Position of Hire
    Purchase
    The hire purchase act, 1972defines 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 the agreement which includes:
    1. Possession of goods is delivered by the owner there of to a
    person on a condition that such person paid the agreed
    amount in periodic payments.
    2. The property/ownership in the goods is to pass to such person
    on the payment of the last of such installments.
    3. Such person has the right to terminate the agreement at any
    time before the property so passes.
    4. According to Sec. 3 of the Hire Purchase Act, 1972 every hire
    purchase agreement must be in writing and signed by all
    parties thereto.
    Rights of Hirer
    1. The hiree (vendor) can not terminate the hire purchase agreement for
    default in payment of hire or due to an unauthorised act or breach of
    expressed conditions unless a notice in writing in this regard is given to
    the hirer the period of notice will be one week where the hirer is payable
    weekly or less than that interval and two weeks in other cases.
    2. The right to repossess the goods will not exist unless sanctioned by the
    court in the following cases:
    (a) Where the hire purchases price is less than Rs. 15,000 one
    half of the hire purchase price has been paid.
    (b) Where the hire purchase price is not less than Rs. 15,000,
    three fourth of hire purchase price has been paid.
    Rights of Hirer (Cont…..)
    However this proportion in case of motor vehicles is as under :
    (a) One half, where the hire purchase price is less than
    Rs. 5,000.
    (b) Three fourths, where the hire purchase price is not
    less than Rs. 5,000 but less than Rs. 15,000.
    (c) Three fourth or such higher proportion not
    exceeding nine-tenth where the hire purchase price
    is not less than Rs. 15,000.
    3. The hirer has a right of receiving a statement from the owner against a
    payment of rupee one showing the amount paid by or on behalf of the
    hirer, the amount which has become due under the agreement but
    remains unpaid and the date upon which each unpaid installment
    became due, and the amount of each such installment and the amount
    which is to become payable under the agreement and the date or the
    mode of determining the date upon which each future installment is to
    become payable, and the amount of each such installment.
    Rights of Hirer (Cont…..)
    4. If the amount paid by the hirer till the date of
    repossession of the good or the value of the
    goods on the date of repossession of goods
    exceeds the total hire purchase price the excess
    payment made by the hirer will be returned to
    the hirer by the owner of the goods. The owner
    or the vendor, for the purpose of calculating the
    value of the goods, has the right to deduct the
    reasonable expenses for repossessing the
    goods, for storing the goods, or repairing them,
    for selling them and for payment of arrears of
    taxes.

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