In commercial practice, various credit arrangements dictate when legal ownership of goods transfers and what rights sellers retain. Match each credit trading scheme on the left with its corresponding legal ownership feature and seller remedy on the right.
- Hire Purchase SchemeOwnership remains with the vendor until the final installment is fully paid, giving the vendor the right to repossess the item upon default.
- Deferred Payment SchemeOwnership passes to the buyer immediately upon delivery, while payment of the purchase price is postponed and settled in structured future installments.
- Credit Sale SchemeOwnership passes to the buyer upon agreement and delivery, preventing repossession and limiting the vendor to suing for unpaid debt upon default.
Answer
Hire Purchase Scheme matches with ownership remaining with the vendor until the final installment is paid with repossession rights; Deferred Payment Scheme matches with ownership passing upon delivery while payment is postponed into future installments; Credit Sale Scheme matches with ownership passing immediately upon delivery restricting the vendor to legal debt recovery.
Hire Purchase keeps legal ownership with the seller until the final installment is settled, allowing the seller to repossess upon default. Deferred Payment transfers ownership immediately upon delivery while deferring installments to future dates. Credit Sale transfers ownership immediately at the time of delivery, meaning the seller cannot repossess the goods and can only sue for breach of contract to recover the debt.
Step-by-Step Solution
Key Concept
Legal timing of title transfer and seller repossession rights across Hire Purchase, Deferred Payment, and Credit Sale schemes