Difference Between Hp And Lease Agreement

For HP and for leases, the contract is valid for a fixed term initially agreed. For business leases, the term can take many years, often adding the caveof that the supplier must upgrade or replace the lease object to bring it into line with a standard or quality comparable to that of the conclusion of the contract. The duration of the HP agreement is longer when valuable property or real estate is purchased. However, with regard to leasing, the duration of the lease will be shorter, as technological changes affect the lessee. In the rental agreement, the relationship between the parties is that of the owner / seller and the tenant, while it exists for the lessor between the lessor and the lessee. The rental agreement usually involves two parties, i.e. the owner (owner) and the tenant (user). Under this agreement, the lessor entrusts the tenant with the right of use in return for the agreed rental contracts. A lease agreement can be flexible enough to meet the financial requirements of both parties. The relationship between the seller and the buyer is that of the owner and the tenant when buying a rental. But the relationship in a lease is that of the landlord and tenant. Leasing and lease purchase are a precise solution for this type of financial agreement, in which the cash obligation is spread over the life of the asset and where leasing does not even require initial capital outflows. Therefore, under leasing, the contractor can use their capital for other working capital requirements.