Legal Definitions - approval sale

An approval sale is a type of commercial transaction where a buyer receives goods from a seller with the understanding that ownership of those goods does not transfer to the buyer until the buyer explicitly accepts or "approves" them. The buyer is given a specific period to examine the goods and decide whether to keep them. During this period, the risk of loss or damage to the goods typically remains with the seller, and the buyer has the option to return the goods without obligation if they do not meet their satisfaction.

Here are some examples illustrating an approval sale:

• Example 1: Online Retailer's Home Trial

  A customer orders a new mattress online from a company that offers a "100-night sleep trial." The customer receives the mattress and uses it for several weeks. If, within the 100-night period, they find the mattress uncomfortable or unsuitable, they can arrange for its return and receive a full refund. The customer does not legally own the mattress until they decide to keep it past the trial period, or the trial period expires without a return. This arrangement is an approval sale because the final purchase is contingent on the buyer's satisfaction and approval after a trial.

• Example 2: Software Evaluation for a Business

  A small marketing agency is considering purchasing a new project management software suite. The software vendor offers a "30-day free trial" of the full version of their product. The agency installs the software, integrates it with their existing tools, and has their team use it for various projects during the month. If, by the end of the 30 days, the software doesn't meet their operational needs or proves too complex, they can simply uninstall it and incur no cost. The agency only commits to purchasing the software license if they approve of its functionality and performance during the trial, making it an approval sale.

• Example 3: Art Gallery Consignment

  An interior designer is helping a client furnish a new office space and is looking for a specific piece of artwork. A local gallery agrees to let the designer take a sculpture on a "72-hour viewing" basis to see how it fits within the client's office environment. During these three days, the designer can assess the sculpture's scale, lighting, and overall aesthetic impact in the actual space. If the sculpture doesn't complement the office decor as expected, the designer can return it to the gallery without obligation. The gallery retains ownership and the risk of damage until the designer or client approves the purchase.