Professional Documents
Culture Documents
Dr Saif Siddiqui
Defined :
Hire purchase is a
peculiar transaction in which the goods are let on hire with the option to hirer to purchase them
Features:
Payment to be made in installments over a specified period The possession is delivered to the hirer at the time of entering into the contract Property is passed to the hirer after last installment is paid If a default is made , seller become entitled to take away the goods The purchaser is free to return the goods with out paying any further installment
In installment sale ,
In hire purchase,
Ownership
Depreciation
Magnitude
Extent
Maintenance Cost is maintenance is borne by the hirer In financial lease , cost is borne by lessee In operating lease, cost is borne by lessor
Nature of agreement
Delivery of equipment
Location
Hire charges
Alteration
Not to make any alteration , additions with out prior consent The events that will constitute a default
Termination
Risk
Registration and fee Stamp duty Schedule of equipments forming subject matter Schedule of hire charges
Consumer Credit
Consumer buyer pay a small fraction of the cash purchase at the time of delivery
Features:
Bipartite arrangement
Tripartite arrangement
Features:
Credit sale
Cases in favour :
Cases against:
Thought less buying Insolvency Costlier Risk for traders Artificial boom
Fall in average age of consumer Cheaper rates Flexible rate structure Increased start up salary
Score (points)
20 25 10 20
25
100
Stability of employment
assets
0.059 0.59
0.20 0.45