Indiana Code 26-1-2-326. Sale on approval and sale or return
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Sec. 326. (1) Unless otherwise agreed, if delivered goods may be returned by the buyer even though they conform to the contract, the transaction is:
(b) a “sale or return” if the goods are delivered primarily for resale.
(a) a “sale on approval” if the goods are delivered primarily for use; and
Terms Used In Indiana Code 26-1-2-326
- Contract: A legal written agreement that becomes binding when signed.
- 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.
(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 (IC 26-2-2-201) and as contradicting the sale aspect of the contract within the provisions of IC 26-1-2-202 on parol or extrinsic evidence.
Formerly: Acts 1963, c.317, s.2-326. As amended by P.L.152-1986, SEC.140; P.L.57-2000, SEC.17.