What Feature Distinguishes Bailment from a Contract of Purchase and Sale

question 50

Multiple Choice

What feature distinguishes bailment from a contract of purchase and sale?

• A) Most commercial contracts are bailments,requiring payment for use of property.
• B) Most bailments are gratuitous,requiring no payment for use of property.
• C) A bailor retains ownership upon transfer of possession to the bailee.
• D) A bailment is typically short term,while contracts cover a longer term.

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Definitions:

Independent Leasing Company

A business that provides leasing services without being affiliated with any single manufacturer or seller, allowing for a wide range of asset leasing options.

Captive Financial Lease

A leasing arrangement where the lessor is owned by or closely affiliated with the company that manufactures or sells the leased asset, often used to finance purchases from the parent company.

Sale and Leaseback

A financial transaction where an entity sells an asset and immediately leases it back from the buyer, allowing the seller to continue using the asset while freeing up capital.

Leasing Reasons

The motives or considerations for choosing to lease assets, such as financial flexibility, tax advantages, or capital preservation.