Commercial transactions often utilize different credit sales arrangements depending on when legal ownership transfers and the legal remedies available to the seller upon buyer default. Match each credit scheme on the left with its corresponding legal feature regarding ownership transfer and seller remedies on the right.
- Hire Purchase SchemeOwnership remains with the seller until the final installment is paid, allowing the vendor statutory rights of repossession upon default.
- Deferred Payment SchemeOwnership passes to the buyer upon delivery, restricting the vendor's remedy for default strictly to legal action for recovery of the unpaid debt.
- Credit Sale SchemeOwnership passes immediately to the buyer at the time of contract execution, with payment structured into future periodic installments.
Answer
Hire Purchase Scheme matches with ownership remaining with the seller until final payment with repossession rights; Deferred Payment Scheme matches with ownership passing upon delivery and seller remedy restricted to suing for debt; Credit Sale Scheme matches with ownership passing immediately upon contract execution with structured future installment payments.
The correct pairings accurately reflect legal ownership rules in commercial credit: Hire Purchase keeps legal title with the seller until the final payment (permitting repossession); Deferred Payment transfers title upon delivery (restricting vendor recourse to court action for debt recovery); Credit Sale transfers ownership immediately upon contract execution with payments spread over future installments.
Step-by-Step Solution
Key Concept
Distinction between legal ownership transfer timing and vendor default remedies across Hire Purchase, Deferred Payment, and Credit Sale schemes.