Sale Vs Hire Purchase Agreement

On the other hand, “a purchase agreement” is a legal obligation to purchase, so that in this case the buyer does not have the possibility to purchase or terminate the contract. Again, in a lease purchase agreement, the delivery of goods to the lease buyer is necessary, whereas this is not the case for a “sale agreement”. Purchase and lease agreements are very similar, but the two contracts differ from one another in their legal incidents. In the commercial rental purchase system, the single party pays in a number of tranches the cost of the asset. In addition, the agreed rates include the price plus interest on the asset made available to the lease buyer on credit. In this way, the final amount paid over time in the form of instalments and the down payment paid are higher compared to the cash-down price of the asset.