Printable Format84-2-327. Special incidents of sale on approval and sale or return. (1) Under a sale on approval unless otherwise agreed
(a) although the goods are identified to the contract the risk of loss and the title do not pass to the buyer until acceptance; and
(b) use of the goods consistent with the purpose of trial is not acceptance but failure seasonably to notify the seller of election to return the goods is acceptance, and if the goods conform to the contract acceptance of any part is acceptance of the whole; and
(c) after due notification of election to return, the return is at the seller's risk and expense but a merchant buyer must follow any reasonable instructions.
(2) Under a sale or return unless otherwise agreed
(a) the option to return extends to the whole or any commercial unit of the goods while in substantially their original condition, but must be exercised seasonably; and
(b) the return is at the buyer's risk and expense.
History: L. 1965, ch. 564, ยง 61; January 1, 1966.
KANSAS COMMENT, 1996
1. This section states several normal incidents of a sale on approval and a sale or return. In a sale on approval, there is no present sale. The transaction in essence is a bailment with an option to purchase. When the buyer accepts the goods, the transaction is completed and under paragraph (1)(a) title passes at that point. Paragraph (1)(b) makes clear that the use of the goods on a trial basis is not acceptance, but that failure to notify the seller that the buyer has elected to return the goods is acceptance. By contrast, in a sale or return there is a present sale. Title passes to the buyer under the normal rules in 84-2-401.
2. Under paragraph (1)(a), the risk of loss in a sale on approval does not pass to the buyer until acceptance. Paragraph (1)(c) adds that the return is at the seller's risk as well. By contrast, the opposite is true for a sale or return. The normal risk of loss rules of 84-2-509 apply, and the buyer bears the risk of loss after receiving the goods. Under paragraph (2)(b), if the goods are returned the return is at the buyer's expense.
3. Paragraph (2)(a) conforms to the usual commercial understanding in extending the right to return under a sale or return to any commercial unit.
CASE ANNOTATIONS
1. Gap-filler statutes, under New York law, as unuseable where parol evidence admissible to establish missing terms examined. Rajala v. Allied Corp., 66 B.R. 582, 594 (1986).