A hire purchase agreement is a type of agreement whereby the Hirer (purchaser) can rent the goods from the owner by paying installments for a certain period. This type of agreement is helpful for those who cannot buy goods for a lump sum amount. Under such agreement the buyer has the option to purchase the goods once the rental period is over. The ownership will not be transferred until the payments are fully completed. Such transfer or purchase is optional and the same can be terminated with the parties so desire.
This type of deed is mostly undertaken to purchase goods like machines, vehicles, equipments for manufacturing etc.