Like Legal Law

Hire-Purchase Agreement – Meaning, Form, Contents & Distinction from Sale 1. Introduction A Hire-Purchase Agreement is a special kind of contract widely used in modern business, especially for buying cars, machinery, and household goods. It combines elements of bailment and sale — the hirer initially takes the goods on hire and later gets an option to purchase them by paying all the agreed instalments. This concept is governed in India by the Hire-Purchase Act, 1972 , and, where not inconsistent, by the Indian Contract Act, 1872 and the Sale of Goods Act, 1930 . 2. Meaning of Hire-Purchase Agreement A Hire-Purchase Agreement is a contract in which the owner of the goods (the bailor) lets out the goods to another person, called the hirer (the bailee) , on the condition that: The hirer pays the goods in periodical instalments ; and The hirer has an option to purchase the goods after paying all instalments; and Ownership remains with the owner until the last insta...