A buyer acquires goods through a sale or return contract.The buyer defaults on a loan owed to its creditors.The goods acquired through the sale and return contract are subject to the creditors claim.

Question

Quizplus · Accepted Answer

If the buyer defaults on a loan owed to its creditors, then the goods acquired through the sale and return contract will be subject to the creditors claim as they were not fully paid for by the buyer. This is because the sale and return contract is considered a conditional sale until the buyer fully pays for the goods, meaning the seller retains ownership until then. If the buyer defaults on their loan, the creditor can claim any assets of the buyer, including the goods acquired through the sale and return contract, to help repay the loan.

A Buyer Acquires Goods Through a Sale or Return Contract