The central government has made an act called Hire Purchase Act 1972 in which you will find the answer to what is a hire purchase agreement. As per the act, hire-purchase agreement is an agreement signed between two parties where the hirer hires goods in return for payments made in instalments. The agreement has certain conditions which enable the hirer to buy the goods from the lender after a nominal payment. The terms and conditions are decided beforehand and signed duly by both the parties, hirer and lender.
In a hire purchase agreement, the transfer of ownership is completed only after payment of installments and nominal amount as per the signed agreement.
For your reference, let me tell you who is a hirer in hire purchase agreement and who is the lender. A ‘hirer’ is the person who hires goods whereas ‘lender’ is the owner of the goods.
There are two types of hire purchases, consumer hire purchase and industrial hire purchase.
A consumer hire purchase agreement is where a consumer hires any goods or assets to fulfil personal needs. In an industrial hire purchase agreement, a company or industry signs an agreement to hire goods for business purposes.
A hire purchase agreement allows the hirer to own a newer better good for which the cost is spread over a period of time. Usually, there are no taxes chargeable on such agreement and purchase.
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What is a hire purchase agreement?
Paaras
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3 Year
2021-04-06T11:40:33+00:00 2021-07-23T17:37:37+00:00Comment
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