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Which of the following statements is not correct in relation to hire-purchase?
- a)The property in goods passes to the hirer along with its possession
- b)The hirer is deemed to be a bailee till the payment of last installment
- c)The hirer may terminate the contract by returning the goods
- d)The hirer cannot transfer any title.
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
Which of the following statements is not correct in relation to hire-p...
The correct answer is option 'A': The property in goods passes to the hirer along with its possession.
Explanation:
Hire-purchase is a type of agreement where the hirer (buyer) is given possession of goods by the owner (seller) in exchange for periodic payments. The hirer has the option to purchase the goods at the end of the agreement period by paying the remaining balance.
Let us analyze each statement to understand why option 'A' is not correct:
a) The property in goods passes to the hirer along with its possession:
This statement is incorrect. In a hire-purchase agreement, the ownership of the goods remains with the owner/seller until the hirer makes the final payment and exercises the option to purchase. Until then, the hirer only has possession and the right to use the goods. The ownership is transferred to the hirer only after the full payment is made.
b) The hirer is deemed to be a bailee till the payment of the last installment:
This statement is correct. A bailee is someone who temporarily possesses someone else's property but does not own it. In a hire-purchase agreement, the hirer is considered a bailee until the final installment is paid and ownership is transferred.
c) The hirer may terminate the contract by returning the goods:
This statement is correct. The hirer has the right to terminate the hire-purchase agreement at any time by returning the goods to the owner/seller. However, the hirer may still be liable to pay certain charges or penalties as mentioned in the agreement.
d) The hirer cannot transfer any title:
This statement is correct. As the ownership of the goods remains with the owner/seller until the final payment is made, the hirer cannot transfer any title or ownership rights to a third party.
Therefore, option 'A' is not correct as the property in goods does not pass to the hirer along with its possession in a hire-purchase agreement.
Explanation:
Hire-purchase is a type of agreement where the hirer (buyer) is given possession of goods by the owner (seller) in exchange for periodic payments. The hirer has the option to purchase the goods at the end of the agreement period by paying the remaining balance.
Let us analyze each statement to understand why option 'A' is not correct:
a) The property in goods passes to the hirer along with its possession:
This statement is incorrect. In a hire-purchase agreement, the ownership of the goods remains with the owner/seller until the hirer makes the final payment and exercises the option to purchase. Until then, the hirer only has possession and the right to use the goods. The ownership is transferred to the hirer only after the full payment is made.
b) The hirer is deemed to be a bailee till the payment of the last installment:
This statement is correct. A bailee is someone who temporarily possesses someone else's property but does not own it. In a hire-purchase agreement, the hirer is considered a bailee until the final installment is paid and ownership is transferred.
c) The hirer may terminate the contract by returning the goods:
This statement is correct. The hirer has the right to terminate the hire-purchase agreement at any time by returning the goods to the owner/seller. However, the hirer may still be liable to pay certain charges or penalties as mentioned in the agreement.
d) The hirer cannot transfer any title:
This statement is correct. As the ownership of the goods remains with the owner/seller until the final payment is made, the hirer cannot transfer any title or ownership rights to a third party.
Therefore, option 'A' is not correct as the property in goods does not pass to the hirer along with its possession in a hire-purchase agreement.
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Community Answer
Which of the following statements is not correct in relation to hire-p...
The Statement A is incorrect as it explains that, property in hire purchase passes along with its possesion
But, according to Hire purchase Act,1972
Possesion may pass immediately, but the property in the goods passes at the payment of last installment until then he is just a bailee with goods
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Which of the following statements is not correct in relation to hire-purchase?a)The property in goods passes to the hirer along with its possessionb)The hirer is deemed to be a bailee till the payment of last installmentc)The hirer may terminate the contract by returning the goodsd)The hirer cannot transfer any title.Correct answer is option 'A'. Can you explain this answer?
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