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Instalment purchase
An instalment sale is a contract of sale under which the buyer receives the goods immediately but pays the purchase price in instalments, often subject to retention of title.
Instalment sale is a special type of contract of sale in which the parties agree that payment shall be made in multiple instalments. The buyer obtains possession of the goods, but title does not ordinarily pass until payment has been made in full where a retention of title clause has been agreed.
This regime is of particular relevance in consumer law, as it affords the buyer protection against unfair terms and excessive interest. The Civil Code and the Consumer Credit Act impose requirements concerning the disclosure of information and the right of cancellation.
In practice, instalment sales are widely used to finance the acquisition of motor vehicles, furniture and electronic goods. In the event of default, the seller may reclaim the goods, provided the statutory conditions are satisfied.
“The customer concluded an installment purchase agreement for the new car, under which payment was to be made in twenty-four monthly installments.”
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