Buying and selling arrangements between sellers and buyers may take different forms and sales contracts can have some unusual terms agreed between the parties.
However, one of the common arrangements between supplier and customer is ‘sale or return‘ also known as ‘sale and return‘. This term is also commonly used as an alternative term to mean consignment sales.
In essence buyer don’t have to worry about getting goods sold as he is not liable to pay for them until they are further sold. And if some stock is left unsold then buyer will simply return it to the supplier.
Things can become complex as more and more conditions are introduced. For example, parties might agree that buyer will be responsible for any sales return or bad debts incurred in respect of goods sold. Just another understanding between parties can be that goods can be returned by the buyer at the same rate or reduced rate etc.
But things are not always like this under every sale or return arrangement as explain above.
Even this can get complex with the norms and practices of the business in particular market. For example, goods if not returned within a certain period of time then sale will occur automatically.
As you can see that matters involving sales of goods even services can get very tricky at times and due to this many conflicts can arise between buyer and seller. Therefore, almost every country has very detailed enactment regulating matters involving sale. In Pakistan, we have Sale of Goods Act and Contract Act to deal with such matters.