Legal Definitions - sale on approval

Definition: A type of sale where the buyer has the right to approve the goods before completing the transaction. The seller retains ownership and risk of loss until the buyer approves the goods.

Example: John wants to buy a new laptop from a store. The store offers a sale on approval, so John can take the laptop home and use it for a few days. If he likes it, he can complete the purchase. If he doesn't like it, he can return it to the store, and the seller will take back ownership of the laptop.

Explanation: In this example, the sale is not complete until John approves the laptop. The seller retains ownership and risk of loss until John decides to keep the laptop. This type of sale is beneficial for buyers who want to test the product before committing to the purchase.