Question

Explain the main features of hire purchase system and Installment payment system?

Answer 1

Answer:

Main characteristic of hire purchase and instalment payment system are as follows:

1. purchase is a credit purchase
2. purchase price is paid in instalment
3. goods are delivered to the buyer
4. Buyer has a right to use this goods
5. sellers remains the owner of the goods up to the time of payment of the last instalment
6. payment of purchase price is made in agreed instalment
7. ownership is transferred to the buyer immediately at the time of sale
8. On making default in payment of instalment,sellers cannot take back the goods,he can only file a suit for the amount due.
9. If buyer sells these goods before payment of the last instalment to the third party,third party gets better title
10. Under this system goods are sold and delivery is also made to the buyer,but its full price is not paid at the time of sale,therefore,this sale is like credit sale

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