HIRE - PURCHASE AGREEMENT

Hire-Purchase Agreement
Sec. 2(e) "Hire-purchase agreement" means an agreement under which
goods are let on hire and under which the hirers an option to purchase
them in accordance with the terms of the agreement and includes an
agreement under which,--
(1) possession of goods is delivered by the owner thereof to a person on
condition that such person pays the agreed amount in periodical
installments, and
(2) the property in the goods is to pass to such person on the payment of
the last of such instalments and
(3) such person has a right to terminate the agreement at any time before
the property so passes.
INGREDIENTS: The essential characteristic features of a Hire Purchase
Agreement are:
1. The property in goods is handed over to the hire purchase. However, the
ownership is continued in the name of vendor It is just like a bailment.
2. It is in the hands of the hire-purchaser to become the owner of the goods. If
he wants to become the owner, he shall have to pay all the instalments. After
paying the last instalment only, he becomes the owner. However, he has the right
to option to return the goods and thereby to cause an end to his liability.
3. The title right of the goods shall be transferred to the hire-purchase on
payment of all the instalments.
Stamp Duty, Registration

Hire purchase agreement requires a stamp duty to be paid like any other ordinary
agreement as per the Indian Stamp Act. However, registration of hire-purchase
agreement is not required, as it mostly does not pertain to any immovable assets.
CONTENTS OF A HIRE - PURCHASE AGREEMENT
a. It must be in writing
b. It must indicate the price of the good, and the number of instalments,
and the payment for each instalment.
c. It must possess the date of commencement of such hire-purchase
d. It must contain the date of payment for each instalment.
e. The property in goods must be described sufficiently.
 AGREEMENT TO SELL
1. An agreement to sell may be in
writing or oral
2. The buyer may or may not get the
possession of the goods
 
3. Generally, the businessmen,
consumers may enter into an
agreement to sell, with the purpose of
business that is to resale, or to enjoy
the goods.
 
HIRE-PURCHASE
1. A hire-purchase agreement must be in
writing
2. The buyer gets possession of the goods,
and enjoys it
 
3. Generally, only the consumers interested
in the goods, but having no sufficient
money in hand, enter into hire-purchase
agreement, with the purpose of enjoying
such goods.
4. Under an agreement to sell, if a person buys
any goods, and subsequently sells them to a
third person, that third person acquires a good
title.
  
5. In this the buyer is entitled to claim implied
conditions and warranties.
4. A hire purchaser is not entitled to sell the
goods and cannot pass a valid title to a third
person, until all the instalments are paid.
Because the ownership lies in the vendor only.
5. A hire Purchaser cannot claim the benefits of
implied conditions and warranties given by the
law. Because the sale is not completed.

6. A hire - purchaser has liberty to opt whether

to continue to pay the instalments or to put an
6. An agreement to sell imposes a legal end to the contract.
obligation on the buyer to purchase it.  
Problem:

Yogi Purchased one two wheeler from Niranjan on hire purchase basis.
Draft a hire purchase agreement.