Standard Hire Purchase Agreement for United Arab Emirates

Standard Hire Purchase Agreement Template for United Arab Emirates

A comprehensive legal agreement governed by UAE law that facilitates the purchase of assets through installment payments, where the purchaser takes possession of the asset while the seller retains ownership until full payment is made. The agreement complies with UAE Federal Laws, including the Civil Code and Commercial Transactions Law, and may incorporate Sharia-compliant principles where required. It details payment terms, ownership transfer conditions, maintenance obligations, insurance requirements, and default provisions, all structured within the UAE legal framework.

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What is a Standard Hire Purchase Agreement?

The Standard Hire Purchase Agreement is a crucial document in UAE commercial practice, used when a purchaser wishes to acquire an asset through installment payments while the seller maintains ownership until full payment is received. This agreement type is particularly relevant in the UAE market where both conventional and Islamic finance principles may apply. The document must comply with UAE Federal Law No. 5 of 1985 (Civil Code), Federal Law No. 18 of 1993 (Commercial Transactions Law), and relevant Central Bank regulations. A Standard Hire Purchase Agreement typically includes detailed asset specifications, payment schedules, maintenance requirements, insurance obligations, and ownership transfer mechanisms, all structured to provide security for the seller while protecting the purchaser's rights under UAE law.

What sections should be included in a Standard Hire Purchase Agreement?

1. Parties: Identification of the Seller/Finance Company and the Purchaser with full legal names and addresses

2. Background: Context of the agreement, including brief description of the asset and purpose of the hire purchase arrangement

3. Definitions: Definitions of key terms used throughout the agreement

4. Asset Description: Detailed description of the asset including specifications, condition, and identification numbers

5. Purchase Price and Payment Terms: Total purchase price, deposit amount, installment amounts, payment schedule, and applicable interest/profit rate

6. Delivery and Acceptance: Terms regarding delivery of the asset and acceptance procedures

7. Title and Risk: Provisions regarding ownership during the hire period and transfer of title upon final payment

8. Insurance and Maintenance: Requirements for insurance coverage and maintenance obligations of the purchaser

9. Warranties and Representations: Warranties regarding the asset and representations by both parties

10. Default and Termination: Events of default, consequences, and termination procedures

11. General Provisions: Standard clauses including notices, amendments, governing law, and jurisdiction

What sections are optional to include in a Standard Hire Purchase Agreement?

1. Islamic Finance Compliance: Required when the agreement needs to comply with Sharia principles, including specific terminology and structure

2. Security Provisions: Required for high-value assets or when additional security is needed beyond the asset itself

3. Registration Requirements: Needed for assets requiring government registration (e.g., vehicles)

4. Third Party Rights: Required when there are guarantors or other third parties involved in the transaction

5. Early Payment Provisions: Optional terms for early settlement and any applicable rebates

6. Asset Usage Restrictions: Required for specific assets with usage limitations or specific requirements

What schedules should be included in a Standard Hire Purchase Agreement?

1. Schedule 1 - Asset Details: Detailed technical specifications and condition report of the asset

2. Schedule 2 - Payment Schedule: Detailed breakdown of all payments including dates, amounts, and profit/interest calculations

3. Schedule 3 - Insurance Requirements: Specific insurance requirements including types of coverage and minimum amounts

4. Schedule 4 - Delivery and Acceptance Form: Form to be completed upon delivery confirming the condition and acceptance of the asset

5. Schedule 5 - Maintenance Requirements: Detailed maintenance schedule and requirements for the asset

6. Appendix A - Required Documents: List of documents required from the purchaser (ID, licenses, etc.)

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Publisher

Genie AI

Document Type

Financing Agreement

Cost

Free to use
Relevant legal definitions
Relevant Industries

Automotive

Manufacturing Equipment

Construction Equipment

Industrial Machinery

Commercial Vehicles

Office Equipment

Medical Equipment

Technology and IT Hardware

Marine Equipment

Agricultural Equipment

Relevant Teams

Legal

Finance

Commercial

Risk Management

Compliance

Sales

Operations

Credit

Business Development

Asset Management

Treasury

Relevant Roles

Finance Manager

Legal Counsel

Commercial Director

Credit Manager

Risk Officer

Compliance Officer

Sales Manager

Contract Administrator

Business Development Manager

Operations Manager

Asset Manager

Financial Controller

Treasury Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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