Distinguish Between Hire Purchase And Ordinary Hiring Agreement

It can be noted that the simple payment of the price in instalments as part of an agreement does not necessarily lead to a rental purchase, but that it may be a sale. For example, in the case of the “tempe buy method”, there is a sale, because in this case the buyer is required to buy without the possibility of return and ownership of the goods is immediately transferred to the buyer. Rent to Own agreements are also excluded from the Leases Act in the Lending Act, as they are considered leases and not a credit extension. Leasing and time-purchase may be similar, since both are a method of financing and in both cases payment is made in small parts. In this impression, it is interesting to know the differences between the two. The differences between these two financing methods are set out below. 3. In the event of a sale, the buyer cannot withdraw from the contract and is obliged to pay the price of the goods. On the other hand, in case of purchase of rental, the tenant may, if he wishes, terminate the contract by returning the goods to its owner, without being obliged to pay the remaining measurements. 5. At the time of the purchase to be made, the financier withdraws the goods from the buyer in the event of late payment. In the event of a tempered sale, the seller cannot take back the goods in the event of late payment, but only sue the buyer. In the case of a rental agreement, the tenant has the possibility to terminate the contract and return the goods, while the buyer does not have such a right or option in case of purchase to temper.

This is explained by the fact that the purchase did not take place in case of rental purchase, but only at the beginning. Until that date, the tenant remains the guarantor and the payments he has paid are considered as rental fees for the use of the goods. . . .

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LORRI WALTERS Realtor®

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