Short Answer Question (3 Marks) · Q6
Q.Distinguish between a Hire-Purchase Agreement and a Sale.
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Start your 14-day free trial to unlock the full solution →| Basis | Hire-Purchase Agreement | Sale (including sale on instalments) |
|---|---|---|
| When property passes | Only when the last instalment is paid AND the option to purchase is exercised | Immediately, at the time of the contract |
| Nature of the transaction | A bailment (hiring) coupled with an option to buy | A sale |
| Position if hirer/buyer stops paying | Hirer may simply return the goods and terminate the hiring | Buyer remains liable; seller can sue for the unpaid PRICE, since the buyer is already the owner |
| Right to resell the goods before full payment | Hirer cannot pass good title, since he is not yet the owner | Buyer, being the owner, generally can deal with/resell the goods |
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