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Lease Finance & Hire Purchase
What is the primary distinction between a lease and a hire purchase agreement?
In a lease, ownership of the asset remains with the lessor throughout the contract period, whereas in hire purchase, ownership transfers to the hirer upon payment of all instalments including the final option-to-purchase payment.
What is the meaning of 'lessor' in a lease transaction?
The owner who grants the right to use the asset.
Which party is called the 'lessee' in a lease transaction?
The lessee is the party who takes the asset on hire from the lessor and uses it for the agreed period in exchange for periodic lease rentals, without acquiring ownership of the asset.
What is a 'closed-end lease' in leasing terminology?
A lease where the lessee has no obligation at end of term.
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