TITLE 30. TRADE AND COMMERCE

CHAPTER 2. UNIFORM COMMERCIAL CODE SALES

Part 3. General Obligation and Construction of Contract

Sale On Approval And Sale Or Return -- Rights Of Creditors

30-2-326. Sale on approval and sale or return -- 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 (30-2-201) and as contradicting the sale aspect of the contract within the provisions of this chapter on parol or extrinsic evidence (30-2-202).

History: En. Sec. 2-326, Ch. 264, L. 1963; R.C.M. 1947, 87A-2-326; amd. Sec. 134, Ch. 305, L. 1999.