Installment Contract Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Installment Contract, written in plain English, along with examples of how it is used.
What is Installment Contract?
It is a contract or agreement between the parties to make certain series of payment, or perform certain service or deliver goods at a specific event on specific time and date for the exchange of something. If the person who enters into such agreement he/she breaches the contract, they are liable for the penalty and can be out of contract.
History and Meaning of Installment Contract
An installment contract is an agreement made between two or more parties in which one party agrees to make a series of payments (installments) to the other party in exchange for goods, services, or something of value. This type of contract has been used for many years, and it is often used in situations where the buyer cannot afford to pay for the full cost of the goods or services upfront.
Installment contracts can be used for a wide range of goods and services, including cars, household appliances, furniture, and more. They are also commonly used for real estate transactions, where the buyer agrees to make a series of payments to the seller over a period of years.
Examples of Installment Contract
- A person buys a car from a dealership and agrees to make monthly payments over the next five years to pay off the cost of the car.
- A homeowner purchases a new air conditioning unit and agrees to make monthly payments over the next two years to pay for the cost of the unit and its installation.
- A business buys new office furniture and agrees to make quarterly payments over the next three years to pay for the cost of the furniture.
Legal Terms Similar to Installment Contract
- Payment Plan - A legal agreement between two parties in which the debtor agrees to make regular payments to the creditor in order to pay off a debt.
- Financing Agreement - An agreement between a borrower and a lender in which the borrower agrees to repay the loan over a set period of time, usually with interest.
- Lease Agreement - A contract between a landlord and a tenant in which the tenant agrees to pay rent in exchange for the right to use the landlord's property for a certain period of time.