Hire Purchase Agreement is signed when a person hires goods for a certain period by paying instalments, and he can own such goods until the end of the agreement. This agreement lasts for a specified period. The consumer does not hold the goods until the last instalment is paid, but they can use the goods throughout the repayment. The hire purchase agreement can be held with the societies, finance companies, retail stores, banks, etc.

A hire purchase agreement is drawn and signed by the hirer (the consumer) and on behalf of the owner (the lending institution).

Generally, the Hire Purchase Agreements are entered between the hirer and the financier. The hire purchase agreement must fulfil the legal requirements of the Sale of Goods Act, 1930 and the Indian Contract Act 1872. Chapter 9 of the Indian Contract Act covers the provisions relating to hire purchase. The owner can recover the goods or can abandon the claim to the goods and sue for the damages in case of breach of the hire purchase agreement.

In the case of the Hire Purchase Agreement, registration is not necessary. In order to register the hire purchase agreement, the Stamp duty is payable under Article 5 Schedule 1 of the Stamp Act.

CONTENT

• The goods for which hire purchase agreement is done
• The price of the goods
• Hire purchase price, i.e. total amount payable over the life of the loan to complete the purchase
• The amount of installment
• Date of installment payment
• Number of instalments
• Names and addresses of the signing parties
• A clause stating that the hirer has the right to withdraw from the agreement within a specific period after receiving an agreement copy
• It is advisable that all terms and conditions of the agreement shall be read and understand before signing it
• Fees and costs of a hire purchase agreement

Why Legato?

Connect with a Legal Expert easily
Legato is your one stop destination with everything related to legal. It empowers you with access to a network of verified lawyers providing their services at all costs. Moreover, our dedicated Case Follow-Up Manager will assist and update you with the progress.

Verified lawyer network
Our network for 1000+ verified lawyers will not only assist you with your case but update you and advise you with things to do & not to do.

Quick results
Once, the legal expert is finalized, you are ready for quick action related to your work. Majority of the lawyers will share a time estimate of what to expect moving forward.