A sale-on-approval contract occurs when the seller and buyer agree that the buyer may return the goods at a later time.

A sale-or-return contract occurs when the seller and buyer agree that the buyer may return the goods at a later time.Such contracts usually occur when the buyer is taking inventory to resell.A contract is a sale-on-approval contract if the seller allows the buyer to take possession of the goods before deciding whether to complete the contract by making the purchase.