Match each commercial credit arrangement to its correct defining characteristic regarding legal ownership and vendor rights upon default.
- Hire Purchase SchemeOwnership remains with the seller until the final installment is paid, giving the vendor the right to repossess the goods upon default.
- Deferred Payment SchemeOwnership passes immediately to the buyer upon delivery, restricting the vendor's legal remedy to suing for the unpaid balance upon default.
- Simple Credit SaleOwnership transfers to the buyer upon initial contract execution, with full payment expected as a lump sum within a specified short-term credit window.
Answer
Hire Purchase Scheme matches with ownership remaining with the seller until the final installment is paid; Deferred Payment Scheme matches with ownership passing immediately upon delivery restricting the vendor to suing for unpaid balance; Simple Credit Sale matches with ownership transferring upon contract execution with payment due as a lump sum within a short-term credit window.
The correct pairings accurately reflect the legal timing of property transfer and seller remedies under Nigerian commercial law: Hire Purchase retains title until full settlement (allowing repossession), Deferred Payment transfers title at delivery (limiting remedy to court action for debt), and Simple Credit Sale transfers title immediately for short-term lump sum settlement.
Step-by-Step Solution
Key Concept
Distinction in passage of title and legal remedies between Hire Purchase and Deferred Payment Credit Schemes