SALE FOR CASH ONLY OR RETURN

Sale for cash only or Return

It may be noted that where the goods have been delivered by a person on“sale or return” on the terms that the goods were to remain the property of the seller till they are paid for, the property therein does not pass to the buyer until the terms are complied with, i.e., cash is paid for.

Example:‘A’delivered his jewellery to‘B’on sale for cash only or return basis. It was expressly provided in the contract that the jewellery shall remain ‘A’s property until the price is paid. Before the payment of the price, ‘B’ pledged the jewellery with‘C’. It was held that at the time of pledge, the ownership was not transferred to ‘B’. Thus, the pledge was not valid and‘A’ could recover the jewellery from‘C’.