Finance Agreement – Instalment Sale Agreement


This Instalment Sale Agreement has been designed for lending transactions where a lender finances goods (such as vehicles, equipment, office furniture etc) for people on an instalment sale basis. Provision is made for ownership in the financed goods to pass to the borrower once the loan has been repaid.

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With a Pre-Agreement Proposal

(in terms of the NCA)

Summary A lender that finances goods (such as vehicles, equipment, office furniture etc) for people on an instalment sale basis may consider using this Instalment Sale Agreement. Provision is made for ownership in the Goods to pass to the borrower once the loan has been repaid. The Pre-Proposal Quotation and Instalment Sale contract have been drafted with the National Credit Act in mind.

The NCA-required Pre-Agreement Quotation is included with this document.

Why would I need an Instalment Sale Agreement? A contract for an Instalment Sale is used when a person finances goods for someone else, on the basis that ownership in the goods passes to the lender once the loan has been repaid in full. For example, computers, furniture, audio goods, vehicles etc. This Agreement provides for a loan that is repaid in instalments over a specific period, with regular payment obligations.

What does the Instalment Sale Agreement say?

The Pre-Agreement Proposal covers the following issues: Description of goods; Finance details; Finance term; Instalments.

The Instalment Sale terms covers the following issues: Definitions; Suspensive Conditions; Sale of Goods; Delivery and Risk; Insurance; Security; Use; Fees and Charges; Interest; Instalments; Early termination; Customer warranties and undertakings; Default; Consents; Delivery address; General.

How long is the template contract? The template Pre-Agreement Proposal can be printed onto three pages, and the template Instalment Sale terms can be printed onto ten pages.

What do you need to do to use the Instalment Sale Agreement?

  • Read the documents to ensure that they suit your requirements. Make changes as required.
  • Complete the relevant details in the Pre-Agreement Proposal and the Instalment Sale Agreement as they pertain to the borrower.
  • Ensure that the documents are signed by both the financier and the borrower.

Before signing this agreement, the financier is advised to conduct a comprehensive financial and credit check on the borrower, and get the borrower to complete a separate application form for a credit facility.

This Agreement is intended for use in cases where the National Credit Act applies. While it has been drafted in accordance with our interpretation of the legislation, we recommend that you obtain independent advice before using an Installment Sale Agreement. Agreements Online will not be liable for any damages you may suffer due to your non-compliance with any regulatory requirements.

Also known as: Sale Agreement; Hire-Purchase Agreement; Finance Agreement; HP Agreement; Installment Sale Contract

Also viewed: Financial Lease Agreement

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