SPECIAL FEATURES OF HIRE PURCHASE AGREEMENT

SPECIAL FEATURES OF HIRE PURCHASE AGREEMENT
1. Possession : The hire vendor transfers only possession of the goods to the hire purchaser immediately after the contract for hire purchase is made.

2. Installments : The goods are delivered by the hire vendor on the condition that a hire purchaser should pay the amount in periodical instalments.

3. Down Payment : The hire purchaser generally makes a down payment, i.e., an amount on signing the agreement.

4. Constituents of Hire purchase instalments : Each instalment consists of two elements- finance charge (interest on unpaid amount) and capital payment.

5. Ownership : The property in goods is to pass to the hire purchaser on the payment of the last instalment and exercising the option conferred upon him under the agreement.

6. Repossession : In case of default in respect of payment of even the last instalment, the hire vendor has the right to take the goods back without making any compensation.