Differentiate between hire purchase system and instalment system as the form of large scale retailing.

1. Transfer of ownership : Under instalment system, the buyer becomes legal owner of goods at the time of agreement. But in case of hire-purchase, the buyer does not get ownership right on goods. He gets only the possession of goods and the right to use them. He remains the hirer of goods, until all instalments are paid.

2. Remedies available : Under instalment system, the seller has no right to recover the goods, but can only sue for payment. Under hire-purchase, the seller is entitled to take back the goods in case of default in payment by the buyer. Instalments paid are forfeited.

3. Return of goods : Articles sold can be returned by the hire purchaser by terminating the contract. He cannot be compelled to pay further instalments. But the buyer under the instalment system cannot terminate the contract or return the article. He is bound to pay all the instalments.

4. Treatment of instalments : Instalments paid under hire-purchase are considered as hire charges till the last instalment is paid. Under the instalment system, every instalment paid by the buyer is considered as part payment towards the price of the article.

5. Right of resale : Hire-purchaser cannot sell the article till the last instalment is paid by him. Under the instalment system the buyer has the right to sell the article at any time he likes.

6. Nature of sale transaction : Hire-purchase is a conditional sale and becomes a full-fledged transaction only after full payment. Instalment system is an outright sale and only the payment is deferred.

7. Prices : The price charged under the instalment system is higher because the seller faces a greater risk than under the hire-purchase system.