Hire purchases PDF

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Summary

notes for hire purchases...

Description

Rights of Hirer 1)Right to terminate the agreement 2)Right to purchase the goods 3)Right to receive statement 4)Right to receive notice 5)Right to get back the excess payment 6)Court's permission to repossess

Credit purchase method: Under the system, the goods purchased on hire purchase is treated as property of the purchaser on the assumption that asset has been purchased with the intention of paying all the instalments on the due date. Repossession Repossession means taking back the property or goods from the buyer on non payment of any instalment due by him, by forfeiting any right of the buyer on the goods. The repossession may be either complete repossession or partial repossession depending upon the circumstances of each case. Complete Repossession Complete repossession means taking back of all the goods sold by the hire seller to the hire purchaser on non-payment of any instalment due. Partial Repossession Partial repossession means the taking back or repossessing of only a part or portion of the goods sold to the hire purchaser by the hire vendor on non-payment of any instalment,by adjusting the agreed value of non-repossessed goods against the amount due. Difference between Hire Purchase and Sales Hire Purchase

Sales

1) Meaning

It is an agreement to purchase.

A sale is a contract.

2) Parties

Hire purchaser and hire seller

Buyer and Seller

3) Title in the goods

Title or property in the goods passes to the hirer only on payment of the last instalment

Property or title in the goods passes to the buyer immediately at the time of contract of sale.

4) Buyer's Position

Position of purchaser is that of a hirer till he pays the last instalment.

The position of the buyer is that of the owner of the goods.

5) Termination of contract

The hirer can terminate the contract ract by returning the goods to its owner without any further liability.

The buyer cannot terminate the contract and is bound to pay the price of the goods.

6)Loss on payment

On non payment of any instalment due to insolvency of purchaser, the hire vendor can repossess the goods.

The risk of any loss on non payment resulting from the insolvency of the buyer is borne by the seller.

7) Passing title

The hire purchaser cannot pass any title even to a bonafide purchaser.

The buyer can pass a good title to a purchaser. bonafide purchaser.

8)Risk in Goods

If the Hire purchaser takes reasonable care as is required to be taken by the bailee, he is not of responsible for the loss of goods.

As the buyer becomes the owner on signing of the contract, any loss of goods will have to be borne by him

9)GST

GST is levied only when the title is transferred.

GST is leived at the time of sale...