Distinguish Between A Sale And A Hire-Purchase Agreement

A lease agreement can also be distinguished from a “sale agreement” (or “sale agreement” from the buyer`s point of view). As noted above, a lease-sale agreement is, at first, only an irrevocable offer of sale, i.e. the landlord is required to sell the goods later if the tenant pays all tranches as agreed, but cannot be forced to purchase by rent. “A purchase agreement,” on the other hand, entails a legal obligation to purchase, so that the buyer has no possibility of purchase or termination of contract. Similarly, in a lease-sale agreement, the delivery of goods to the rental buyer is necessary, whereas this is not the case in a “sale agreement”. 1. In the case of a sale, the property of the goods is immediately transferred to the buyer at the time of the conclusion of the contract, while when the purchase is rented, the property of the goods is transferred to the tenant for payment of the last tranche. 6. In the case of a sale, a turnover tax is levied at the time of the contract, while in the case of a sale, VAT can only be collected when it has finally matured for a sale (K.L.

Johar – Co. vs. Dy. Commercial Tax Officer). Today, people want to live comfortably with all institutions, but at the same time they do not have that purchasing power that allows them to afford everything they need for an elaborate lifestyle. Buying rental is one of the coolest options that are available to people only for the actual sale through full payment. Let`s take a look at their differences. 3. The rental purchase is a contract to rent and buy later. Payment ins and rungs is a deal to buy. 3.

In the event of a sale, the buyer cannot terminate the contract and is obliged to pay the price of the goods. On the other hand, in the case of a rental sale, the tenant can, if he wishes, terminate the contract by returning the goods to his landlord without paying the remaining payments. It may be noted that the mere payment of the price in installments as part of an agreement does not necessarily result in a rental purchase, but a sale. For example, in the case of the “rat tempered purchase method” there is a sale, because in this case, the buyer is obliged to buy without a return option and the property in goods goes to the buyer immediately. Under the lease agreement, the goods are delivered to the buyer at the time of purchase, but the owner of the merchandise agrees to transfer the goods to the tenant only if the tenant has paid a certain number of payments. In this system, both parties receive something because the buyer has the right to use the asset immediately without making the full payment at the time of the contract extension. Thus, the buyer receives not only the product, but also the buyer`s credit. On the other hand, the seller receives the borrowing costs and benefits from the increase in turnover. The distinction should be made between a sales contract and an employment and employment contract, mainly for tax reasons. VAT is only levied in the event of a sales contract.

If ownership of the goods is to be transferred and the goods are ultimately to be delivered to the buyer, this is a sales contract, although some work may be necessary on the seller`s part of the merchandise. However, if the contract is essentially the provision of services and the exercise of skills and the goods are not delivered as such, it is an employment and employment contract and not a sale. In fact, the difference between the two is very minute. c) G commissioned an artist to paint a portrait and provided the necessary canvas and colour. Held, it is a contract for work and work, since the content of the contract is the application of skills and work in the production of the portrait (Robinson vs Graves). If the painting and painting are also to be delivered by the painter, it will be a sales contract. 2. In the case of a sale, the buyer`s position is that of the owner of the merchandise, but for the rental sale, the tenant`s position is that of a bailee until he pays the last tranche.

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