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Justin, who sells Jet Skis, tells Sam, a regular client, about a special promotional campaign. On receipt of a $1,000 down payment, Justin will sell Sam a new Sea-Doo jet ski for $5,000, even though it normally sells for $6,000. Justin also says that if Sam does not like the performance of the jet ski, he can return it within 30 days, and Justin will refund the $1,000 down payment. Sam pays the $1,000 and takes the jet ski. On the 10th day, the jet ski is stolen through no fault of Sam's. Sam calls Justin and demands the return of $1,000. Justin claims that Sam should suffer the risk of loss and that he still owes Justin $4,000 for the rest of the purchase price. Whether Sam or Justin is correct depends upon whether we are dealing with a sale on approval, or a sale or return. Explain your answers!
What would happen if this was a sale on approval?
What would happen is this was a sale or return?
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