§ 57A-2-326 — Sale on approval and sale or return--Consignment sales and rights of creditors.

(1) Unless otherwise agreed, if delivered goods may be returned by the buyer even though they conform to the contract, the transaction is: (a) A "sale on approval" if the goods are delivered primarily for use; and (b) A "sale or return" if the goods are delivered primarily for resale. (2) 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. (3) 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 (§ 57A-2-201 ) and as contradicting the sale aspect of the contract within the provisions of this chapter on parol or extrinsic evidence (§ 57A-2-202 ).

Legislative History

SL 1966, ch 150, § 2-326; SDCL, §§ 57-4-64 to 57-4-67; SL 2000, ch 231, § 5.