time price doctrine
time-price doctrine. The rule that if a debt arises out of a purchase and sale, the usury laws do not apply. • If a higher price is charged for a deferred payment than for an immediate payment, the difference between the time price and the cash price is deemed compensation to the seller for the risk that the buyer will default and for the interest that the seller could have earned on an immediate payment. Because the buyer can usu. choose to postpone a purchase and save up the cash price, the buyer does not have the same status as a needy borrower who must deal with a potentially predatory lender.
