(c) Credit sale
This is a sale on credit. This is a contract of sale of goods whereby the purchase price is payable by five or more instalments. The property in this case passes on the payment of the first instalment and the owner losses his rights against the goods. This means the purchase can give a good title to a subsequent purchaser even when he himself has not completed the purchase. In Lee V. Butler (1893) Y bought furniture under a credit sale agreement and resold them to D before he had paid all the instalments. The original seller sued D for recovery and it was held that D had obtained a good tile as under a credit sale agreement property in the goods passes with the payment of the first installment.
The distinction between a hire-purchase agreement and a credit sale is that whereas the latter is a contract of sale with an obligation to purchase the former is a hiring contract. The hire purchase agreement is a contract letter between the owner of goods and the hirer while in credit sale, the parties are seller and buyer.
(ii) A conditional sale agreement
A conditional sale is a contract of sale of goods whereby part of the purchase price is payable by installments. Property in the goods pass to the buyer when the condition(s) prescribed by the seller is fulfilled. It differs from a hire purchase agreement as in that it is a contract of sale whether a hire purchase agreement is a contract of hiring.