Strong contracts define the details of the nature of the agreement between the buyer and the seller and are ready to be verified so that both parties can sign as soon as they are able to obtain a verbal agreement. A conditional sales contract also protects the seller if the buyer is late if payment is required. Since the property will not be transferred to the buyer until after the terms have been concluded, the seller will remain the rightful owner for the duration of the contract. This makes it easier for the seller to repossess or recover the property as a matter of law, as he is not required to apply an expensive enforcement procedure against the buyer after an early transfer of ownership. The buyer can take possession of the property as soon as the contract is in effect, but only owns the property when it is fully paid, which is usually done in increments. If the company is late in its payments, the seller will take possession of the item. The acquisition of a property through a conditional sales contract may allow a company to deduct interest from its tax return. A conditional sales contract cannot require a down payment and may also have a flexible repayment plan. A conditional sales contract is a financing contract whereby a buyer takes possession of an asset, but retains ownership and the right of withdrawal to the seller until the purchase price is paid in full. Conditional sales contracts allow the seller to repossess the property if the buyer is late in payment.
The same applies to car purchase contracts. In some states, buyers can drive the lot car by signing a conditional sales contract. These contracts are usually signed when funding is not yet complete. However, the title and registration of the vehicle remain in the name of the dealer, who has the right to take back the vehicle if the conditions are not met. This means that the seller is still working to secure the financial terms of the agreement, or the seller must invent his own to finalize the purchase. The buyer and seller meet and start the contract with an oral agreement. Once both agree to the terms, the buyer enters into a formal and written contract that describes the terms, including down payment, delivery, payments and conditions.