MARVIN MANDEL, Governor

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(2) The delivery to seller of a proper letter of
credit suspends the buyer's obligation to pay. If the
letter of credit is dishonored, the seller way on
seasonable notification to the buyer require payment
directly from him.

(3) Unless otherwise agreed the term "letter of
credit" or "banker's credit" in a contract for sale means
an irrevocable credit issued by a financing agency of
good repute and, where the shipment is overseas, of good
international repute. The term "confirmed credit" means
that the credit must also carry the direct obligation of
such an agency which does business in the seller's
financial market.

2—326. Sale on approval and sale or return; consignment
sales and rights of creditors.

(1)   Unless otherwise agreed, if delivered goods may
be returned by the buyer even though they conform to the
contract, the transaction is

(a)    A "sale on approval" if the goods are
delivered primarily for use, and

(b)   A "sale or return" if the goods are
delivered primarily for resale.

(2)    Except as provided in subsection (3), goods
held on approval are not subject to the claims of the
buyer's creditors until acceptance; goods held on sale or
return are subject to such claims while in the buyer's
possession.

(3) Where goods are delivered to a person for sale
and such person maintains a place of business at which he
deals in goods of the kind involved, under a name other
than the name of the person making delivery, then with
respect to claims of creditors of the person conducting
the business the goods are deemed to be on sale or
return. The provisions of this subsection are
applicable even though an agreement purports to reserve
title to the person making delivery until payment or
resale or uses such words as "on consignment" or "on
memorandum." However, this subsection is not applicable
if the person making delivery

(a)   Complies with an applicable law providing
for a consignor's interest or the like to be evidenced by
a sign, or

(b)    Establishes that the person conducting
the business is generally known by his creditors to be
substantially engaged in selling the goods of others, or