Hire purchase is a business arrangement where one party otherwise known as the owner gives goods to another called the hirer whereby the latter will be making some periodical payment (technically known as installments) to the former until the full cost of the goods is off-set.


Upon the full payment of the purchase price, the ownership of the goods would be transferred to the hirer. Until the transfer of ownership takes place, the hirer is not the owner and therefore, he cannot handle the goods as if it belongs to him.
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