Page:United States Statutes at Large Volume 77.djvu/684

 652

PUBLIC LAW 88-243-DEC. 30, 1963

[77 STAT.

§ 28:2—325. "Letter of credit" term; "confirmed credit" (1) Failure of the buyer seasonably to furnish an agreed letter of credit is a breacli of the contract for sale. (2) The delivery to seller of a proper letter of credit suspends the buyer's obligation to pay. If the letter of credit is dishonored, the seller may on seasonable notification to the buyer require payment directly irom him. (3) Unless otherwise agreed the term "letter of credit" or "banker's credit"' in a contract for sale means an irrevocable credit issued by a financing agency of good repute and, where the shipment is overseas, of good international repute. The term "confirmed credit" means that the credit must also carry the direct obligation of such an agency which does business in the seller's financial market. §28:2—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 confoim 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) Except as provided in subsection (3), 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) Where goods are delivered to a person for sale and such person maintains a place of business at which he deals in goods of the kind involved, under a name other than the name of the person making delivery, then with respect to claims of creditors of the person conducting the business the goods are deemed to be on sale or return. The provisions of this subsection are applicable even though an agreement purports to reserve title to the person making delivery until payment or resale or uses such words as "on consignment" or "on memorandum". However, this subsection is not applicable if the person making delivery (a) complies with an applicable law providing for a consignor's interest or the like to be evidenced by a sign, or (b) establishes that the person conducting the business is generally known by his creditors to be substantially engaged in selling the goods of others, or (c) complies with the filing provisions of the article on secured transactions (article 9). (4) 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 article (section 28:2—201) and as contradicting the sale aspect of the contract within the provisions of this article on parol or extrinsic evidence (section 28:2—202). §28:2—327. Special incidents of sale on approval and sale or return (1) Under a sale on approval unless otherwise agreed (a) although the goods are identified to the contract the risk of loss and the title do not pass to the buyer until acceptance; and (b) use of the goods consistent with the purpose of trial is not acceptance but failure seasonably to notify the seller of election to return the goods is acceptance, and if the goods conform to the contract acceptance of any part is acceptance of the whole; and

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