Buy rent or also known as installment is an arrangement of buying and selling goods where the seller sells goods by calculating each payment made by the buyer by paying off the price of the goods agreed upon by both parties and is bound in an agreement. The ownership of the goods will move from the seller to the buyer after all payments have been paid by the buyer to the seller.
Elements of a Lease Agreement
According to Article 1 letter a of the Decree of the Minister of Trade and Cooperatives Number 34 / KP / II / 80 regarding Rental Purchases, Purchase with Installments, and Renting, the elements or elements of a purchase agreement are:
- The sale and purchase of goods;
- Sales taking into account each payment;
- Purchase rental object is delivered to buyer;
- Momentum for transfer of ownership after the last settlement.
Terms of the Rental Purchase Agreement
To be valid, a lease purchase agreement must be in writing and signed by both parties. Buyers and sellers must spell out the following information clearly in a contract:
- Clear item description.
- Cash price for goods.
- The purchase price of rent, that is the total amount that must be paid to rent and then buy goods.
- Monthly installments (most states require that applicable interest rates be disclosed and set rates and fees that can be applied in lease purchase transactions).
- A fairly comprehensive statement about the rights of the parties (including the right to cancel the agreement during the “cooling-off” period).
- The seller’s right to terminate the contract when he feels he wants to do it for a valid reason.