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Hier Purchase System

The document discusses hire purchase system. Some key points: 1) Hire purchase is an agreement where goods are hired with an option to purchase after paying installments. Ownership remains with the vendor until the purchase option is exercised. 2) Under hire purchase, the buyer gets possession of the goods but ownership remains with the seller until all installments are paid. The buyer can also return the goods before completing payment. 3) If the buyer defaults, the seller can repossess the goods and forfeit the amounts already received. Ownership transfers to the buyer only after full payment of the hire purchase price.

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manoranjanpatra
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217 views10 pages

Hier Purchase System

The document discusses hire purchase system. Some key points: 1) Hire purchase is an agreement where goods are hired with an option to purchase after paying installments. Ownership remains with the vendor until the purchase option is exercised. 2) Under hire purchase, the buyer gets possession of the goods but ownership remains with the seller until all installments are paid. The buyer can also return the goods before completing payment. 3) If the buyer defaults, the seller can repossess the goods and forfeit the amounts already received. Ownership transfers to the buyer only after full payment of the hire purchase price.

Uploaded by

manoranjanpatra
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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HIER PURCHASE SYSTEM

WHAT IS HIRE PURCHASE


• It is an agreement to the hire goods with
an opinion to purchase after payment of
the agreed hire installments. Ownership of
the goods remains with the vendor until
the opinion to purchase is excercised
FEATURES OF HIRE PURCHASE
SYSTEM
 There is an agreement between the seller and the purchaser
 The position of the goods immediately passes from the seller
to the buyer on signing the agreement
 The buyer will make payment in installment over a period of
time
 The ownership of the goods will remain with the seller and
passes to the buyer on the payment of last installment
 Each installment is treated as hire charge till the last
installment is paid.
Cont……
Cont…..
 The buyer has the opinion to return the goods to
the seller and can terminate the agreement f he
does not want to pay the rest of the installment.
 If there is any default in payment of any
installment, the seller has a right to repossess
the goods sold on hire purchase and forfeit the
amount already received either in down payment
or in installment.
• HIRE PURCHASE PRICE-
• The hire purchase price means the total
payable by the hirer under the hire purchase
agreement in order to complete the purchase of
or acquisition of the property in the goods to
which the agreement relates and includes any
some so payable by the hirer under the hire
purchase agreement whether by way of deposit
or otherwise.
• Net hire purchase charge [sec8(1)(d)]
• Net hire purchase charges in respect of
the goods sold on hire purchase means
the difference between the net hire
purchase price and the net case price of
the goods.
• Hire purchase agreement-
• The hire purchase agreement most content the following
particular
 The description of goods in a manner sufficient to identify them
 The hire purchase price of the goods
 The date of commencement of the agreement
 The number of installments in which hire purchase price is to
be paid, the amount and due date.
Hire purchase vs Credit sale
• In credit sale the property i.e., ownership
and possession is transferred to the
purchase simultaneously.

• In hire purchase the ownership


remains with the seller until last
installment is paid.
Hire purchase vs Installment sale
• In case of installment system it is not only the position
but also the ownership of the goods which is transfer
to the buyer immediately at the time of agreement.
• If the buyer stop payment of the dues at that time the
seller has no right to right to repossess the goods

In hire purchase the ownership remains with the seller until


last installment is paid.

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