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Simple English definitions for legal terms
installment contract
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A quick definition of installment contract:
An installment contract is a type of contract where the work or payment is divided into smaller parts and completed over a period of time instead of all at once. This can be used for buying goods or property, where the buyer pays in installments and receives the goods or property gradually. The Uniform Commercial Code provides rules for installment contracts for the sale of goods, and buyers can reject non-conforming installments. Installment contracts can also be used for the sale or lease of real estate, where the buyer pays over time and gains possession but not legal title until the final payment is made.
A more thorough explanation:
An installment contract is a type of contract where the performance of the contract is completed in a series of payments, services, or deliveries over a period of time, instead of all at once. This means that the parties involved agree to complete the contract in parts, or installments, rather than in one lump sum.
- A buyer agrees to purchase a car from a seller and will make monthly payments over the course of three years until the full price of the car is paid off.
- A seller agrees to deliver a certain amount of goods to a buyer every month for a year, and the buyer will make payments after each delivery.
- A buyer agrees to purchase a piece of land from a seller and will make payments over a set period of time. The buyer can use the land immediately but will not gain legal ownership until the final payment is made.
These examples illustrate how an installment contract works. Instead of completing the contract all at once, the parties agree to complete it in parts over a period of time. This can be beneficial for both parties, as it allows for more flexibility in payment and delivery schedules.