Characteristics of Hire Purchase Agreement

Following are the characteristics of the hire purchase agreement.

i)     It must be in writing and must he signed by all the parties thereto (Section 3)

ii)     According to Section 4 of Hire Purchases Act, 1972, the agreement must state

a)    the hire purchase price of the goods to which the agreement relates;

b)    the cash price of the goods, that is to say, the price at which the goods may be purchased by the hirer for cash;

c)    the date on which the agreement shall be deemed to have commenced;

d)    the number of instalments by which the hire purchase price is to be paid, the amount of each of those instalments and the date (the mode of determining the date upon which it is payable) and the person to whom and the place where it is payable; and

e)    the goods to which the agreement relates, in a manner sufficient to identify them.

Apart from the above mentioned conditions, a full description of the amount to be paid in cash or by cheque, if any, should be given in the agreement.

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