(1) Unless otherwise agreed, if delivered goods may be returned by the buyer even though they conform to the contract, the transaction is:

Terms Used In Tennessee Code 47-2-326

  • Buyer: means a person who buys or contracts to buy goods. See Tennessee Code 47-2-103
  • Contract: A legal written agreement that becomes binding when signed.
  • Contract for sale: includes both a present sale of goods and a contract to sell goods at a future time. See Tennessee Code 47-2-106
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Statute: A law passed by a legislature.
(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).
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