Consider the following statements concerning an instalment sale of goods:
(a)Ownership of the goods passes to the buyer when the agreement is signed
(b)It has the same legal effect as a sale by hire-purchase
(c)The seller's rights are limited to those of a creditor
(d)It is recorded as a sale when the final instalment is paid

Question

Quizplus · Accepted Answer

(a) is correct - ownership of goods passes to the buyer only when the agreement is signed.
(b) is incorrect - instalment sale and hire-purchase are not the same; instalment sale is a form of credit sale while hire-purchase is a form of lease.
(c) is correct - the seller is considered a creditor because the buyer is purchasing the good on credit and making payments.
(d) is incorrect - instalment sale is recorded as a sale as soon as the goods are delivered, and the buyer has the right to possession of the goods, not just upon the final instalment payment.

Consider the Following Statements Concerning an Instalment Sale of Goods