Any lease contract which is formed in the situation where the lessee also has the option of purchasing the equipment or property which is put on lease is known as a lease purchase contract. Lease purchase contracts can be of many types such as property lease purchase contract, equipment lease purchase contract etc.
But all of these types come under one broad category which can be termed as a standard lease purchase contract. A standard lease purchase contract is made between a lessor and a lessee for a certain fixed period of time and for a certain fixed monthly lease payment but also gives the purchase figure for the case when the lessee opts to purchase the leased item.
Standard lease purchase contract is a formally drafted document which is legally binding for both the involved parties and consists of enforceable terms and conditions which describe the responsibilities as well as the respective roles of the parties in the lease arrangement.
It also mentions the clauses or conditions under which the lessee can buy the item. In such a contract, the contract term or the effective length of contract should also be given and the document must be signed at the end by both the lessee and the lessor.