Legal English Challenge 2023- Day 6 Reading

Hire purchase is an arrangement for buying expensive consumer goods. When you enter into a hire purchase agreement, the goods are bought on credit; payment is by instalment, ownership of the goods remains with the seller until payment has been made in full and does not pass as soon as the goods comes into the possession of the buyer.

A hire-purchase agreement has to include following information: the contracting parties, an object of the sale and delivery terms, a price and payment terms, information about the competent authority to settle the account between the seller and the buyer for the hire purchase, a retention of title (ROT) clause that the seller has the ownership of the object of the sale until the purchase has been fully paid.

It is important to distinguish between hire purchase agreements and leasing contracts. The key difference between them is that you will own your consumer good at the end of a hire purchase agreement. In contrast, when you lease something,  once the contract term is over the lessee usually has a choice of extending the lease, returning the asset, or introducing a buyer for the asset.


on credit

to come into the possession of somebody


consumer goods


to extend the lease

by / in instalment(s)

to remain with somebody

retention of title

to retain the title

to own

ownership of something


to possess

to settle the account between X and Y

title to something