Hire Purchase - Standard Provisions

Standard Provisions

To be valid, HP agreements must be in writing and signed by both .They must clearly lay out the following information in a print that all can read without effort:

  1. a clear description of the goods
  2. the cash price for the goods
  3. the HP price, i.e., the total sum that must be paid to hire and then purchase the goods
  4. the deposit
  5. the monthly installments (most states require that the applicable interest rate is disclosed and regulate the rates and charges that can be applied in HP transactions) and
  6. a reasonably comprehensive statement of the parties' rights (sometimes including the right to cancel the agreement during a "cooling-off" period).
  7. The right of the hire to terminate the contract when he feels like doing so with a valid reason.

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