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Under sales on return or approval basis, the ownership of goods is passed only
  • a)
    When the retailer gives his approval
  • b)
    If the goods are not returned within specified period.
  • c)
    Both (a) and (b)
  • d)
    None of the above.
Correct answer is option 'C'. Can you explain this answer?
Verified Answer
Under sales on return or approval basis, the ownership of goods is pas...
Under sales on return or approval basis, the ownership of goods is passed only when certain conditions are met. The correct answer is option C, which states that the ownership is passed both when the retailer gives his approval and if the goods are not returned within the specified period.
Here is a detailed explanation:
Ownership under sales on return or approval basis:
- Sales on return or approval basis refers to a type of sale where the buyer has the option to return the goods or give their approval before finalizing the purchase.
- In such cases, the ownership of goods is not immediately transferred to the buyer. It is contingent upon certain conditions being met.
Conditions for ownership transfer:
- The ownership of goods is passed in the following situations:
1. Retailer's approval:
- If the retailer, who is the buyer in this case, gives his approval for the goods, it signifies his acceptance of the purchase.
- Once the retailer approves the goods, the ownership is transferred to him.
2. Non-return within specified period:
- If the goods are not returned within the specified period mentioned in the agreement or contract, it implies that the buyer is satisfied with the purchase.
- In such cases, the ownership of the goods is passed to the buyer.
Conclusion:
- Under sales on return or approval basis, the ownership of goods is passed when the retailer gives his approval or if the goods are not returned within the specified period.
- Option C, which states both (a) and (b), is the correct answer.
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Under sales on return or approval basis, the ownership of goods is passed onlya)When the retailer gives his approvalb)If the goods are not returned within specified period.c)Both (a) and (b)d)None of the above.Correct answer is option 'C'. Can you explain this answer?
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