General Studies · Leasing and Hire Purchase

Examine the following statements regarding the termination and default procedures in leasing and hire purchase. Statement I: Upon the expiration of a finance lease term, the lessee usually has choices: to return the asset, to renew the lease for a secondary period at a nominal rent, or to purchase the asset at a predetermined price. If purchased, the legal title is transferred. Statement II: In a hire purchase agreement, if the hirer defaults on the payment of installments, statutory protection in various jurisdictions restricts immediate repossession without a court order if a substantial portion (like one-third or more) of the hire purchase price has been paid. Statement III: When a leased asset is repossessed due to default, the lessor must sell the asset in a commercially reasonable manner, apply the proceeds to the outstanding balance, return the surplus to the lessee, or pursue the lessee for any remaining deficiency. Which of the following states the correct interpretation?