DIFFERENCE BETWEEN CONSIGNMENT AND SALE

The Difference between Consignment and Sale is as follows:

CONSIGNMENT

Consignment is a specialized kind of transaction which involves the two parties i.e. Consignor and Consignee. In this the consignor dispatches the goods to the consignee and consignee is required to sell those goods. For this, the consignee gets a commission. Consignment is a nature of transaction that leads to the expansion of business. The legal relationship between the consignor and consignee is of the agent and the principal.

SALE

Sale is a transaction in which the seller sells the goods to the buyer for the consideration known as Price. In case of the sale, the possession as well as ownership of the goods is immediately transferred to the buyer. The features of sale are as follows:

  • Two parties involved are buyer and seller.
  • The ownership and possession of goods is transferred to the buyer only after the sale.
  • The goods are sold for the consideration known as Price.
  • The risk is transferred to the buyer at the time of the sale of the good.

DIFFERENCE BETWEEN CONSIGNMENT AND SALE

The Difference between Consignment and Sale on the various basis is explained as follows:

DIFFERENCE BETWEEN CONSIGNMENT AND SALE
BASIS OF DIFFERENCE CONSIGNMENT SALE
OWNERSHIP In Consignment, the ownership of the goods remains with the consignor. In case of sale, the ownership of the goods transferred from the seller to the buyer as the purchase made by the buyer.
PARTIES INVOLVED The parties involved in consignment are Consignor and Consignee. The parties involved in sale are Seller and the Buyer.
RELATIONSHIP BETWEEN PARTIES The consignor is the principal and consignee is the agent. The relationship between the parties is of buyer and the seller.
RISK The risk of the goods remains with the consignor. The risk of the goods is transferred to the buyer as the sale made.
TRANSFER POF POSSESSION AND OWNERSHIP Only possession of goods is transferred to the consignee. The possession as well as ownership of the goods is transferred to the buyer.  
CONSIDERATION Consignee sells the goods of the consignor in consideration of the commission. The seller makes the sales for the consideration of price.
CALLING BACK THE GOODS The consignor can call back the goods from the consignee. The seller cannot claim the goods back from the buyer.
EXPENSES ON GOODS All the expenses on the goods are to be borne by the consignor. All the expenses on the goods are to be borne by the buyer unless agreed.
LOSS OF GOODS When the goods are lost on consignment, the loss is to be borne by the consignor. When the goods are lost after the sale, the loss is to be borne by the buyer.
ACCOUNT SALES The consignee is required to send the account sales periodically to the consignor mentioning the details of sales made and other details. The buyer is not required to send any kind of account sales report.
EVIDENCE OF TRANSACTION The Proforma Invoice sent by the consignor is the evidence of the goods consigned by him. The Bill or Invoice given by the seller is the proof of the Sale.
PAYMENT OF PRICE In consignment, the consignee is not bound to pay the price of the goods until the goods are sold. In case of sale, the buyer has to pay the price at the time of the goods purchased by him.
SUBJECT MATTER OF DEALING Only movable property is dealt in consignment. Any kind of property is involved for sale.
PROFIT OR LOSS The profit or the loss belongs to the consignor. The profit or loss belongs to the consignee.
UNSOLD GOODS Unsold good with the consignee will be treated as stock of the consignor. The seller has nothing to do with the goods which could not be resold.
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