Tennessee Law on Consignment Sales and Rights of Creditors

Tennessee Statutes
Title 47. Commercial Instruments And Transactions
Chapter 2. Sales
Part 3. General Obligation And Construction Of Contract

§ 47-2-326. Sale on approval and sale or return - Consignment sales and rights of creditors

(1)    Unless otherwise agreed, if delivered goods may be returned by the buyer even though they conform to the contract, the transaction is:
(a)    a "sale on approval" if the goods are delivered primarily for use, and
(b)    a "sale or return" if the goods are delivered primarily for resale.
(2)    Goods held on approval are not subject to the claims of the buyer's creditors until acceptance; goods held on sale or return are subject to such claims while in the buyer's possession.
(3)    Any "or return" term of a contract for sale is to be treated as a separate contract for sale within the Statute of Frauds section of this chapter ( § 47-2-201) and as contradicting the sale aspect of the contract within the provisions of this chapter on parol or extrinsic evidence ( § 47-2-202).

Cite as T.C.A. § 47-2-326


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