Distinction between sale and consignment

A consignment is not a sale by the consignor to the consignee. The goods are held by the consignee for sale. There is a change only in the location of the goods. The points of distinction between a sale and a consignment are as follows: 

A sale involves two parties viz., seller and buyer, whereas consignment involves three parties viz., Consignor, Consignee and the buyer: 

Sale is a contract between the seller and the buyer, whereas consignmees is a contract between the consignor and the consignee; 

(i) In a sale, the property in the goods passes to the buyer as soon as the sale is complete. In a consignment the legal ownership of the goods remains with the consignor. The ownership passes only to the ultimate buyer when a sale takes place and in no case does the ownership pass to the consignee. Hence, the person to whom goods are sold is a debtor bu the person to whom goods are consigned is merely an agent. (iv) In case of sale, the buyer can dispose of the goods in any way he likes the property in the goods passes to him; but in case consignment, the consignee has to dispose of the goods as per instructions of the consignoe. (v) In case of sale, risk is transferred from the seller to the buyer as soon as the transaction takes place. Hence, any loss, if incurred, is to be bome by the buyer. But in case of consignment, loss is to be borne by the consignor and not by the consignee since he is only an agent : (vi) In a contract of sale, the buyer cannot return the goods to the seller, but in consignment, the consignee can do so if he thinks that the goods are not markętable. (vii) In sale, the profit is realised when goods are sold to the buyer, whereas in consignment the profit is realised when the goods are sold by the consignee to the buyer, (vii) The consideration for sale is termed as 'Price' while in the case consignment, it is termed as 'Commission'. While the price in the case of a sale may also be fixed by a third party, Commission which is a fixed percentage on the sale value of goods consigned, is determined by the parties themselves.