Conditional sales contracts

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Conditional sales contracts

Similar to equipment trust certificates, except that the lender is either the equipment manufacturer or a bank or finance company to which the manufacturer has sold the conditional sales contract.

Conditional Sales Contracts

A sale of an asset in which the buyer assumes possession and may have use of the asset, but the seller retains title until the buyer pays its full price and may repossess the asset if the buyer does not. In exchange for the right to use the asset, the buyer makes payments over an agreed-upon period of time, whether months or years. This arrangement is most common with heavy equipment, machinery, and real estate. See also: Beneficial ownership, Lease.
References in periodicals archive ?
The most difficult of these cases involve conditional sales agreements and lease-option agreements--in each of which legal title to the property remains with the vendor or lessor until the conditions are satisfied or the purchase option is exercised.
Where conditional sales agreements are involved, courts in common law provinces have generally held that the purchaser acquires either property in the goods, or equitable ownership, once possession, use, and risk are transferred.
In common law provinces, a definition along these lines would have the same effects as the twofold test in Wardean Drilling, and would presumably apply to purchasers under conditional sales agreements and lessees under security or financing leases.

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