is a contract (more fully called contract of hire with an option of purchase) in which a person hires goods for a specified period and at a fixed rentwith the added condition that if he shall retain the goods for the full period and pay all the installments of rent as they become due the contract shall determine and the title vest absolutely in himand that if he chooses he may at any time during the term surrender the goods and be quit of any liability for future installments upon the contract. In the United States such a contract is generally treated as a conditional saleand the term hire purchase is also sometimes applied to a contract in which the hirer is not free to avoid future liability by surrender of the goods. In Englandhoweverif the hirer does not have this right the contract is a sale.

This definition is in context to Accounting. See more contextual defintions for Hire And Purchase Agreement.