Question

What is the name of the buyer under the hire purchase system?
A. hirer
B. buyer
C. debtor
D. hire vendor

Answer 1

Hint: For the above question, in order to find the name of the buyer under the hire purchase system, we will perhaps have to know about the hire purchase system itself.

Complete step-by-step solution:
As we happen to know that the hire purchase system is a credit purchase. We know that the price under the hire-purchase system is paid in installments. Hence the goods are delivered in the possession of the purchases at the time of commencement of the agreement.
We also know that a hired vendor continues to be the owner of the goods till the payment of the last installment.
Also, therefore a hirer is the name of a buyer under the hire purchase system.
Now, we will check all of the options given to us in the question, one by one as follows:
A. hirer
We already know that a hired vendor continues to be the owner of the goods till the payment of the last installment. Therefore a hirer is the name of a buyer under the hire purchase system.
Hence, this option is the correct answer to the question as the name of the buyer under the hire purchase system is hirer.
B. buyer
It is not the correct option.
C. debtor
It is also not the correct option.
D. hire vendor
A Hired vendor is the person who sells the goods to the hirer.
Hence this option is incorrect.
Therefore, the correct option for the above question is option A.

Note: Be careful while choosing the option. There is a great chance that students might choose option D as the correct option. But, they must note that along with the word ‘hire’, it also contains ‘vendor’. A vendor is someone who sells goods, not buys goods. So, do not choose this option.