An instalment sale contract is a credit sale contract. Your purchase is financed by the merchant, who usually assigns the contract to a financial institution. You will then pay for the item by making a series of payments over a given period of time. You will also have to pay credit charges in addition to the amount financed.

Here is an example: You purchase a television that costs $1,000. Your credit sale contract provides for 12 monthly payments of $95. In the end, your purchase will have cost you $1,140.

You must have paid the full price of the item and the credit charges before becoming the owner of the item, even when you take possession at the time of purchase.

Other credit contracts

There are other types of credit contracts:

  • credit cards and lines of credit;
  • money loans;
  • Money loans granted from a credit card. This is another form of financing offered by a merchant. These are usually offered as part of “Buy now, pay later” types of promotions. The page on financing plans provides more details on this subject.

Last update : July 28, 2020

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The information contained on this page is presented in simple terms to make it easier to understand. It does not replace the texts of the laws and regulations.