Hire Purchase Agreement - Legal Service Provider In India

 

 What is Hire Purchase Agreement?

A hire purchase agreement is an agreement of hire with an option to purchase available at the disposal. The user makes a downpayment during the purchase, and the outstanding balance will be paid in instalments with an interest charge. Mostly, Indian people used concept mortgage, which is similar to the hire purchase agreement.

In both cases, the ownership of the purchased goods will be transferred to the lender until the borrower pays off the whole debt.

Hire Purchase Agreement - Legal Service Provider In India


A hire purchase agreement is usually executed between one company and another party usually knows as a “hirer”. Various clauses of a hire purchase agreements include confirmation to hire from both parties, price of the equipment in question, payment to execute the agreement, monthly instalments payable by the hirer, remedies upon default of instalment by the hirer, dispute resolution clause etc. among other clauses governing the transaction.

 

The hire purchase agreement to be writing and signed by parties:

●      Every hire purchase agreement shall be in writing form.

●      And signed by all parties related to this deal.

●      If there is a contract of guarantee, then this agreement shall be signed by surety also.

●      For detailed information visit LawDocs


Every Hire- Purchase agreement shall be state-

  1. Price of Goods to which the agreement relates
  2. The cash price of goods; the price to which item may be purchased by the owner.
  3. The date on which the agreement shall be deemed.
  4. Also, state the installment of goods; For instance:

  • Number of installments,
  • Amount of each installment
  • the date, or the mode of determining the date,
  • The person to whom
  • And the place where it is payable.

 

  1. Identify the attributes of the item which relate to an agreement.

Conclusion: Hire Purchase agreement is an important source of financing in recent times. It provides a convenient way to afford and acquire assets. However, before entering an agreement, one should clearly understand the costs involved and the disclosures provided.


Written by

Chetna Bansal (Manager IT Services - LawDocs)

Suyash Raizada (Chief Manager IT Services- LawDocs)

 

 

 

 

 

 

 

 

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