Tennessee § 47-2-326 - Sale on approval and sale or return — Consignment sales and rights of creditors.

§ 47-2-326. Sale on approval and sale or return — Consignment sales and rights of creditors.

Unless otherwise agreed, if delivered goods may be returned by the buyer even though they conform to the contract, the transaction is: a “sale on approval” if the goods are delivered primarily for use, and a “sale or return” if the goods are delivered primarily for resale. 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. 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 ). Acts 1963, ch. 81, § 1 (2-326); 2000, ch. 846, § 6. Cross-References. Creditor's rights, art consignments, § 47-25-1005 . Prior Tennessee Law: § 47-1219. Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Agency, § 13; 6 Tenn. Juris., Commercial Law, §§ 25, 98; 13 Tenn. Juris., Factors and Commission Merchants, §§ 5, 9. Law Reviews. The New Article 9: Its Impact on Tennessee Law (Part I), 67 Tenn. L. Rev. 125 (1999). Cited: In re Phippens, 4 B.R. 155, 1980 Bankr. LEXIS 5223 (Bankr. M.D. Tenn. 1980); In re Kingsport Hardware, Inc., 40 B.R. 838, 1984 Bankr. LEXIS 5471 (Bankr. E.D. Tenn. 1984); Transouth Financial Corp. v. General Electric Capital Corp., 832 S.W.2d 568, 1992 Tenn. App. LEXIS 79 (Tenn. Ct. App. 1992).