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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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Recognizing the distinctions and drafting protective agreements around each type of transaction will provide the best foundation for a successful conditional sale transaction.

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