The main points of distinction between a consignment and a sale are as given below:
- Ownership: In a consignment, the ownership remains which the principal, but in sale, the ownership passes to the buyer.
- Relationship: In a consignment the relations are of principal and agent, and continue till terminated, but in a sale the relations terminated as soon as the goods are delivered and payment is made.
- Return of Goods: In a consignment, goods may be returned at any time, but in a sale, the buyer cannot return the goods unless otherwise agreed.
- Debtor: In case of consignment, when it is complete the consignee does not become debtor, but in case of a sale, when it is complete the buyer becomes the debtor to the seller.
- Account Sales: In case of consignment, the consignee periodically sends account sales to the consignor; but in case of sale, no such statement is prepared.
- Payment: In case of consignment, as and when goods are sold, otherwise no payment is due, but in case of sale, immediately on sale or as agreed.
- Loss of Fire: In consignment, if goods are destroyed by fire the risk is of consignor; but in case of sale, if after sales goods are destroyed by fire the buyer will bear this loss.