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Question

Which of these is NOT a feature of Consignment?

A
There is principal and agent relationship between the Consignor and Consignee
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B
Consignor presents proforma invoice to the Consignee
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C
The property in the goods passes on to the Consignee after transfer of the goods
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D
Consignor reimburses all the expenses to the Consignee
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Solution

The correct option is C The property in the goods passes on to the Consignee after transfer of the goods
  • The consignor sends goods on consignment to the consignee so that the consignment can sell these goods on behalf of the consignment. Thus, there is a principal agent relationship between the consignor and the consignee.
  • The consignor presents proforma invoice to the consignee specifying the details of the the goods sent on consignment such as quantity, value etc. and other term of consignment.
  • When goods are sent on consignment, mere possession is passed to the consignee by the consignor, the ownership still lies with the consignor. So, the property in goods does not pass on to the consignment after transfer of the goods.
  • Consignor reimburses all the expenses to the consignee which have been made on behalf of the consignor on account of consignment by the consignee.

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