Conditional Sales Contract
A conditional sale contract grants ownership of a piece of property to the buyer, but not lawful possession until the sale price is paid in full. Under which the seller retains legal ownership of the goods until the buyer has completed payment. Conditional sales contracts are used primarily for such items as machinery, dental equipment, and the like, which are often purchased on an installment basis over a period of two or three years. Conditional sales contracts generally have a market interest rate built into their payment schedules. Conditional agreements may be used to sell real estate, vehicles, equipment, and other personal property.
With a conditional sales contract, the buyer is allowed to use the property before he finishes paying for it. It has often been utilized during the financing of machinery and equipment, as well as various forms of real estate. Depending on the buyer’s credit history, it may also be better for him to get financing from the seller than to apply for a bank loan. This contract agreement arises from the sale of goods.