Hire-Purchase Agreement

THIS AGREEMENT is made and entered into at …………………... this …………….... day of ……….... between M/s……………………….. a Company having registered office at ………………………. hereinafter referred to as 'the Owner' of the One Part and Mr. …………………... of …………………….. hereinafter referred to as 'the Hirer' of the Other Part ;

WHEREAS  the Owner is carrying on business of manufacturing ……..………………. .…………… at ……..……. AND WHEREAS the  Hirer has requested the Owner to give the said ……… and equipment on hire to enable the Hirer to carry on the business of manufacturing …………………... with an option to the Hirer to purchase the same.

NOW IT IS AGREED BY AND BETWEEN THE PARTIES AS FOLLOWS : 

1.  The owner agrees to give and deliver over to the Hirer the said ……................... described in the Schedule hereunder written on hire on the terms and conditions hereinafter mentioned and pursuant to the said Agreement the Owner has delivered possession of the said ................. to the Hirer.

2.  The Hirer confirms that he has inspected the said .................... before taking possession and is satisfied that it is in good and working condition and acknowledges delivery of the same to him by the Owner and agrees to hold it on the terms and conditions hereinafter mentioned.

3.  The hire-purchase price of the said ................. fixed at Rs. …………. exclusive of the deposit amount mentioned in the next clause and the cost price fixed at Rs. …………. is accepted by both the parties hereto.

4.  The Hirer has paid to the Owner on the execution of this agreement a sum of Rs. …... as deposit or earnest which will be adjusted against the hire purchase price of the said ................., if the Hirer exercises the option to purchase the same as hereinafter mentioned. If the Hirer does not exercise the said option or the agreement is terminated before the exercise of such option then the said amount of deposit will be returned to the Hirer by the Owner on the expiration or sooner determination of this agreement, subject to deduction of any claim which the Owner may have against the Hirer under or by virtue of this agreement or in law.

5.  During the pendency of this agreement the Hirer shall pay to the Owner by equal monthly instalments a sum of Rs. ………... as hire charges, in advance without any deduction, the first of such payments to be made on the execution of this agreement and each subsequent monthly payment will be made on or before the …………………... day of such each succeeding month hereafter. The payment will be made at the registered office of the Owner by cash only or by cheque in the name of the Owner.

6.  If the Hirer fails to pay any monthly instalment of hire charges on the due date thereof then the Hirer shall be liable to pay interest thereon at the rate of …………………..  per cent per annum from the date of default till payment thereof. This is however, without prejudice to the right of the Owner to terminate this agreement for default in payment of the monthly instalments as hereinafter provided.

7.  During the pendency of this agreement the Hirer shall keep the said ................. in good working condition and shall maintain it properly as a man of prudence would do and shall replace any of the parts thereof lost or disused or out-of-use or broken.

8. The Owner through its authorised representative shall be entitled to inspect the said ................. during working hours at any time and for that purpose to enter into the premises where the said ................. will be installed or kept and the Hirer shall allow the Owner and its representative to do so.

9. The Owner does not give any warranty as to the quality or fitness of the mechanism of the said ................. and will not be responsible or liable for any defect found therein.

10. The Hirer proposes to install the said ................. at …………………..... and agrees and undertakes not to remove the same to any other place without the prior written consent of the Owner. The Hirer shall not remove the name plates fixed to the machinery for the purpose of identification of the property of the Owner during the pendency of this agreement.

11.  The Hirer shall use the said ................. for the manufacture of ……………… and not for any other purpose without the prior consent of the Owner.

12.  The Hirer shall not give the said ................. on hire or on any other basis or to allow it to be used by any other person without the prior written consent of the Owner and shall not hypothecate or pledge the same with any person to secure payment of any moneys.

13. The ownership or property of the Owner in the said ................. will continue to remain unaffected during the pendency of this agreement and the Hirer shall be considered as the bailee thereof with all the duties and obligations of a bailee in law, until the Hirer exercises his option to purchase hereinafter provided.

14.  If any taxes or other dues are required to be paid in respect of the said ................., the same will be paid by the Hirer and if any permit or licence to use the said ................. is required to be obtained from any Government or any local authority the same will be obtained by the Hirer at his costs and responsibility.

15.  If the said ................. or any part thereof goes out of order and requires repairs of a substantial nature the work of repairs will be carried only through a mechanic appointed by the Owner and the Hirer shall pay his charges.

16. The Hirer shall be liable to pay the hire charges every month notwithstanding whether the said ................. is working or remains idle for want of work or for any other reason.

17.  If the Hirer commits breach of any term of this Agreement or fails to pay any two monthly instalments of hire charges, the Owner will have the right to terminate this agreement by giving one month's prior notice to that effect and unless in the meanwhile the breach is remedied and the hire charges are paid as the case may be, this agreement shall, on the expiration of the notice period stand terminated. If the agreement is terminated as aforesaid the Hirer's option to purchase as hereinafter mentioned shall stand forfeited or cancelled.

18. If the Hirer is adjudged insolvent or he allows the said ................. to be attached in execution of a decree or an order of a court or for recovery of any Government dues or if a Receiver thereof is appointed by Court or any creditor, this agreement, on the happening of any such event shall stand terminated.

19. The Hirer shall have also a right to terminate this agreement at any time by giving not less than fourteen days' prior notice to the Owner to that effect but in such a case the Hirer will be liable to pay to the Owner the amounts which have accrued due towards hire charges and have not been paid and the amount of hire charges payable for the period from the date of termination till the stipulated period of this agreement would expire as and by way of compensation for the loss suffered by the Owner,

20. On the termination of this agreement by efflux of time or earlier termination by the Owner or the Hirer or otherwise as aforesaid, the Owner shall return to the Hirer the amount of deposit less the amounts payable by the Hirer to the Owner for hire charges or otherwise and the expenses to be paid or incurred by the Hirer in terms of these presents and not paid by him.

21. If the said ................. is lost or wholly destroyed or damaged beyond repairs by fire, floods or earthquake or for any other reason, the Hirer shall make good the loss suffered by the Owner, the loss being the market price of the ................. then existing or the hire-purchase price mentioned in clause (3) above, whichever is more, Provided that, the amount of Insurance claim received if any will be adjusted against such price.

22.  The Owner declares that -

(a) The Hirer shall have and enjoy quiet possession of the said ................. during the subsistence of this agreement.

(b) That the said ................. is free from any charge or encumbrance in favour of any third person.

(c)  The Owner has a right to sell the said ..................

(d)  The said ................. is new/second hand.

23.  The Hirer shall not assign the benefits and rights under this Agreement to any other person without the prior written consent of the Owner which consent shall not be unreasonably withheld or refused.

24.  If on the determination of this agreement by efflux of time or otherwise, the Hirer fails to deliver the said ................. to the Owner, without there being any dispute the Owner will be entitled to file a suit or take other proceedings to recover possession thereof and the Hirer will be liable to pay all the costs, charges and expenses incurred by the Owner, in that behalf subject to any order of the Court.

25.  If any dispute arises between the parties out of or in connection with the agreement whether in the nature of interpretation or meaning of any term hereof or as to any claim by one against the other, or otherwise the same shall be referred to arbitration of a common arbitrator if agreed upon, otherwise to two arbitrators one to be appointed by each party hereto and the arbitration shall be governed by the Arbitration Act for the time being in force.

THE SCHEDULE ABOVE REFERRED TO 

(List /Description of machinery & equipment)                       )
Signed and delivered for and                                                   ) 
on behalf of M/s. ……………….  & Co. Ltd.,                       )
by Mr. ………………... a Director of the                               )
Owner duly authorised by a                                                     )
Resolution of the Board of                                                       )
Directors dated…………………                                             )
in the presence of .…………………..                                     ) 

Signed and delivered by the                                                    ) 
withinnamed Hirer Mr. ………………….                             )
in the presence of .……………..                                            )