III. Goods Sent ‘On Approval’ or ‘On Sale or Return’ Basis Goods sent on approval or on sale or return basis mean those goods in respect of which the buyer has option either to return or retain. Sl. No Rule Time of Transfer of Ownership Examples .
Where the buyer communicates his approval or acceptance Ownership passes right from the time of communication of the approval ‘A’ offer to sell his scooter to ‘B’ and delivers it to ‘B’ for trial run for days. ‘B’ communicates his acceptance after days. In this case, ownership passes right from the time of his communication of his approval. .
Where the buyer does some act adopting the transaction When the act of adoption is done ‘A’ delivered some jewellery to ‘B’ on sale or return basis. ‘B’ pledged the jewellery with ‘C’. It was held that ownership of the jewellery had transferred to ‘B’ as he had adopted the transaction by pledging the jewellery with ‘C’. In this case, A has no right against ‘C’.
He can only recover the price of the jewellery from ‘B’. 12th Commerce Unit - - . . AM