Understanding Installment Sales: Contracts, Rights, and Guarantees
Classified in Law & Jurisprudence
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Understanding Installment Sales Contracts
An installment sale contract is an agreement where one party delivers movable property to another, and the recipient is obligated to pay a specified price, either in full or in installments, over a period exceeding three months from the contract's completion. This arrangement must be clearly defined to avoid ambiguity.
Perfection: A contract is considered 'perfected' when it meets all general contractual requirements and the property is delivered to the buyer.
Scope of Implementation
The following are excluded from the scope of installment sales:
- Sales for resale purposes
- Occasional sales for profit
- Sales or chattel mortgages secured by non-possessory pledges on assets
- Installment sales contracts with a value