Vehicle Hire-Purchase Agreement Format in India

HIRE-PURCHASE AGREEMENT

This Hire-Purchase Agreement ("Agreement") is made at __________ on this ____ day of __________, 20__.

BETWEEN

Mr./Ms./Entity ________________, having address/registered office at ________________, hereinafter referred to as the "Owner/Financier", which expression shall, where the context permits, include its successors and permitted assigns, of the FIRST PART;

AND

Mr./Ms./Entity ________________, having address/registered office at ________________, hereinafter referred to as the "Hirer", which expression shall, where the context permits, include legal representatives and permitted successors, of the SECOND PART;

AND, IF APPLICABLE

Mr./Ms./Entity ________________, having address/registered office at ________________, being the dealer and/or guarantor for the purposes specifically stated in this Agreement, hereinafter referred to as the "Dealer/Guarantor", of the THIRD PART.

RECITALS

A. The Hirer wishes to acquire the motor vehicle described in the Schedule ("Vehicle") under a hire-purchase arrangement.

B. The Owner/Financier has agreed to acquire/provide the Vehicle and let it to the Hirer on the terms of this Agreement, with an option for the Hirer to acquire ownership after due performance of the agreed obligations.

C. Where a Dealer/Guarantor is a party, that party agrees to perform only the obligations expressly assigned to it under this Agreement.

TERMS AND CONDITIONS

1. Hire of Vehicle. The Owner/Financier lets and the Hirer takes on hire the Vehicle described in the Schedule, subject to this Agreement.

2. Price and payment. The cash price of the Vehicle is ₹__________. The initial/down payment is ₹__________. The total hire-purchase amount payable under this Agreement is ₹__________, comprising ____ instalments of ₹__________ each, payable on or before the ____ day of each month beginning on __________. Any interest, finance charge, processing fee, tax, late fee or other charge must be separately disclosed in the Schedule or an annexure forming part of this Agreement.

3. Possession and restriction on disposal. During the hiring period, the Hirer shall not sell, assign, pledge, create any unauthorised charge over, sub-let, transfer or part with possession of the Vehicle except with the prior written consent of the Owner/Financier and subject to applicable law.

4. Use, maintenance and compliance. The Hirer shall keep the Vehicle in roadworthy condition, subject to reasonable wear and tear, use it only for lawful purposes and in accordance with its registration/permit, and comply with applicable motor vehicle, taxation, pollution, permit and safety requirements.

5. Inspection. On reasonable prior notice and at a reasonable time, the Hirer shall permit the Owner/Financier or its authorised representative to inspect the Vehicle where such inspection is reasonably necessary to protect the Owner/Financier's contractual interest and is lawful.

6. Insurance. The Hirer shall maintain insurance required by law and any additional insurance expressly agreed by the parties. Where legally permissible and contractually required, the interest of the Owner/Financier shall be appropriately noted with the insurer. Premiums and other agreed insurance costs shall be borne by __________.

7. Taxes, fees and penalties. Unless otherwise stated in the Schedule, the Hirer shall bear road tax, permit fees, user charges and other lawful recurring charges relating to the Hirer's possession or use of the Vehicle. Traffic fines or penalties arising from the Hirer's use shall be borne by the person legally liable for them.

8. Voluntary termination by Hirer. Subject to settlement of amounts lawfully due and the terms expressly disclosed in this Agreement, the Hirer may request early termination by written notice and return the Vehicle at the agreed place, condition and time. The Owner/Financier shall provide a written statement of settlement.

9. Events of default. Subject to applicable law and any mandatory notice/cure requirement, an event of default may include material failure to pay an amount due, material breach of this Agreement, unlawful disposal of the Vehicle, material misrepresentation, or another event expressly stated in the Schedule that materially prejudices the Owner/Financier's rights.

10. Notice and cure. Before enforcing remedies for a curable default, the Owner/Financier shall give the Hirer written notice describing the default, the amount or action required to cure it, and a reasonable cure period of ____ days, unless a different procedure is permitted or required by applicable law.

11. Repossession. Any repossession shall be carried out only in accordance with this Agreement and applicable law. Where RBI directions or other regulatory requirements apply, the contract and enforcement process shall include the required notice, circumstances for any lawful waiver of notice, possession procedure, final opportunity for repayment before sale/auction, procedure for restoring possession where applicable, and a transparent sale/auction procedure. Nothing in this Agreement authorises trespass, force, intimidation, unlawful entry or any other unlawful recovery practice.

12. Sale or disposal after lawful repossession. If the Vehicle is lawfully repossessed and may lawfully be sold, the Owner/Financier shall follow the agreed and applicable statutory/regulatory procedure, give any required final opportunity to cure, maintain an account of the sale proceeds and permitted expenses, and adjust the net proceeds against the lawful outstanding amount. Any surplus shall be dealt with according to law and any remaining lawful shortfall shall be communicated with an account statement.

13. Registration certificate entry. The parties shall cooperate in making the required hire-purchase/lease/hypothecation entry in the certificate of registration in accordance with section 51 of the Motor Vehicles Act, 1988 and the applicable Central Motor Vehicles Rules. Where required, Form 34 shall be filed for making the entry.

14. Termination entry. On lawful completion or termination of the arrangement and satisfaction of the relevant conditions, the parties shall cooperate in filing Form 35 and completing the prescribed process for cancellation of the hire-purchase/lease/hypothecation endorsement, as applicable.

15. Ownership and option to purchase. Unless applicable law or the transaction documents provide otherwise, ownership/title as between the parties shall remain with the Owner/Financier during the hiring period. Upon payment of all amounts lawfully due and full performance of the conditions for exercise of the purchase option, the Owner/Financier shall take the agreed steps to transfer/release its interest in favour of the Hirer and provide the documents reasonably required for the registration process.

16. No assignment by Hirer. The Hirer shall not assign contractual rights or obligations under this Agreement without prior written consent of the Owner/Financier, except where such restriction is prohibited by law.

17. Guarantee (optional). If the Dealer/Guarantor has expressly agreed to guarantee the Hirer's obligations, the guarantee shall be limited to the scope and amount stated in the Schedule/guarantee annexure and shall be governed by applicable provisions of the Indian Contract Act, 1872. Delete this clause if no guarantee is intended.

18. Waiver. A delay or omission by a party in enforcing a contractual right shall not by itself amount to a waiver. Any waiver should be in writing and shall apply only to the specific matter for which it is given.

19. Notices. Contractual notices shall be sent to the postal address and/or electronic address stated in the Schedule by a method capable of establishing dispatch or delivery, subject to any mandatory legal requirement governing a particular notice.

20. Dispute resolution. The parties shall first attempt good-faith resolution of any dispute. If they choose arbitration, any dispute legally capable of being arbitrated may be referred to a sole arbitrator appointed in accordance with the Arbitration and Conciliation Act, 1996. The seat and venue of arbitration shall be __________, India, and the language shall be __________. This clause does not exclude any statutory remedy or forum that cannot lawfully be waived or excluded.

21. Governing law and jurisdiction. This Agreement shall be governed by the laws of India. Subject to any valid arbitration agreement and any non-excludable statutory jurisdiction, courts/tribunals having lawful jurisdiction at __________ shall have jurisdiction.

22. Entire agreement and amendments. This Agreement, its Schedule and signed annexures record the parties' agreement concerning the transaction. Any amendment shall be in writing and signed/accepted in the manner required by applicable law.

23. Copies. Each party shall receive a complete signed copy of this Agreement together with all schedules and annexures forming part of it.

SCHEDULE OF VEHICLE AND FINANCIAL TERMS

IN WITNESS WHEREOF, the parties have executed this Agreement on the date and at the place first written above after reading and understanding its terms.