lease purchase agreement
lease-purchase agreement. A rent-to-own purchase plan under which the buyer takes possession of the goods with the first payment and takes ownership with the final payment; a lease of property (esp. equipment) by which ownership of the property is transferred to the lessee at the end of the lease term. • Such a lease is usu. treated as an installment sale. Under a capital lease, the lessee is responsible for paying taxes and other expenses on the property. — Also termed lease-to-purchase agreement; hire-purchase agreement; capital lease. Cf. operating lease under LEASE. [Cases: Bailment 2; Bills and Notes 22. C.J.S. Bailments §§ 5, 14, 16–18; Bills and Notes; Letters of Credit § 20.]
