Question

Which among the following are true about Hire Purchase?
(A) The title to goods passes on last payment in hire purchase.
(B) The seller can sue for price if the buyer is in default. He cannot take possession of the goods.
(C) The hirer is not responsible for risk of loss of goods if he has taken reasonable precaution because the ownership has not yet transferred.
(D) Component, other than cash price included in installment, is called Hire charges.

• A. (A), (B), and (D) only
• B. (B), (C), and (D) only
• C. (A), (C), and (D) only
• D. (A), (B), and (C) only

Hint:

Remember that hire purchase agreements combine elements of leasing and install ment sales.

Answer 1

The Correct Option is C

Key aspects of hire purchase:
1. Ownership passes upon final payment.
2. The hirer is protected from risks with proper care.
3. Payments cover hire fees in addition to the item's cost