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    Differnce Bewtween Sale and Agreement To Sell

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    fasiha
    A sale involves the transfer of ownership of goods from a seller to a buyer in exchange for payment. An agreement to sell is a contract where the seller agrees to transfer goods in the future, once certain conditions have been met. The key differences are: 1) a sale involves the immediate transfer of goods, while an agreement to sell involves future transfer, 2) risk and rewards transfer to the buyer in a sale but remain with the seller in an agreement to sell, 3) the nature of the buyer's rights also differ, gaining ownership in a sale but only the right to receive goods in an agreement to sell.

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    Differnce Bewtween Sale and Agreement To Sell

    Uploaded by

    fasiha
    101 views5 pages
    A sale involves the transfer of ownership of goods from a seller to a buyer in exchange for payment. An agreement to sell is a contract where the seller agrees to transfer goods in the future, once certain conditions have been met. The key differences are: 1) a sale involves the immediate transfer of goods, while an agreement to sell involves future transfer, 2) risk and rewards transfer to the buyer in a sale but remain with the seller in an agreement to sell, 3) the nature of the buyer's rights also differ, gaining ownership in a sale but only the right to receive goods in an agreement to sell.

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    business law

    Original Title

    Differnce Bewtween Sale and Agreement to Sell (1)

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    A sale involves the transfer of ownership of goods from a seller to a buyer in exchange for payment. An agreement to sell is a contract where the seller agrees to transfer goods in the future, once certain conditions have been met. The key differences are: 1) a sale involves the immediate transfer of goods, while an agreement to sell involves future transfer, 2) risk and rewards transfer to the buyer in a sale but remain with the seller in an agreement to sell, 3) the nature of the buyer's rights also differ, gaining ownership in a sale but only the right to receive goods in an agreement to sell.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    101 views5 pages

    Differnce Bewtween Sale and Agreement To Sell

    Uploaded by

    fasiha
    A sale involves the transfer of ownership of goods from a seller to a buyer in exchange for payment. An agreement to sell is a contract where the seller agrees to transfer goods in the future, once certain conditions have been met. The key differences are: 1) a sale involves the immediate transfer of goods, while an agreement to sell involves future transfer, 2) risk and rewards transfer to the buyer in a sale but remain with the seller in an agreement to sell, 3) the nature of the buyer's rights also differ, gaining ownership in a sale but only the right to receive goods in an agreement to sell.

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    © All Rights Reserved
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    of 5

    Definition of Sale

    A sale is a type of contract in which the seller transfers the ownership of goods to
    the buyer for a money consideration. Here the relationship amidst the seller and
    buyer is of creditor and debtor. It is the result of an agreement to sell when the
    conditions are fulfilled and the specified time is over. The following are the
    essential conditions regarding Sale:

    1. There must be at least two parties; one is the buyer, and other is the seller.
    2. The subject matter of the sale is the goods.
    3. Payment should be made in the country’s legal currency.
    4. The goods should pass from seller to buyer.
    5. All the necessary conditions of a valid contract should be present like free
    consent, consideration, a lawful object, capacity of parties, etc.

    If the goods are being sold and the property is transferred to the buyer, but the
    seller is not paid. Then, the seller can go to the court and file a suit against the
    buyer for the damages and the price too. On the other hand, if the goods are not
    delivered to the buyer then he can also sue the seller for damages.

    Definition of Agreement to Sell

    An agreement to sell is also a contract of sale of goods, in which the seller agrees
    to transfer goods to the buyer for a price at a later date or after the fulfillment of a
    condition.

    When there is a willingness of the both the parties to constitute a sale i.e. the buyer
    agrees to buy, and the seller is ready to sell the goods for monetary value. In an
    agreement to sell the performance of the contract is done at a future date, i.e. when
    the time elapses or when the necessary conditions are satisfied. After the contract
    is executed, it becomes a valid sale. All the necessary conditions required at the
    time of sale should exist in the case of an agreement to sell too.

    If the seller rescinds the contract, then the buyer can claim damages for the breach
    of contract. On the other hand, the unpaid seller can also sue the buyer for
    damages.

    Key Differences Between Sale and Agreement to Sell

    The following are the major differences between sale and agreement to sell:
    1. When the vendor sells goods to the customer for a price, and the transfer of
    goods from the vendor to the customer takes place at the same time, then it
    is known as Sale. When the seller agrees to sell the goods to the buyer at a
    future specified date or after the necessary conditions are fulfilled then it is
    known as Agreement to sell.
    2. The nature of sale is absolute while an agreement to sell is conditional.
    3. A Sale is an example of Executed Contract whereas the Agreement to Sell is
    an example of Executory Contract.
    4. Risk and rewards are transferred with the transfer of goods to the buyer in
    Sale. On the other hand, risk and rewards are not transferred as the goods are
    still in possession of the seller.
    5. If the goods are lost or damaged subsequently, then in the case of sale it is
    the liability of the buyer, but if we talk about an agreement to sell, it is the
    liability of the seller.
    6. Tax is imposed at the time of sale, not at the time of agreement to sell.
    7. In the case of a sale, the right to sell the goods is in the hands of the buyer.
    Conversely, in agreement to sell, the seller has the right to sell the goods.

    Conclusion

    Under Sale of Goods Act 1930, section 4 (3) deals with the Sale and Agreement to
    sell, where it has been clarified that the agreement to sell also come under sale.
    However, there is a distinction between these two terms which we discussed
    above.
    CONTRACT OF SALE :-
    It is defined in the following words, " A contract whereby the seller transfers or
    agrees to transfer the property or the goods to the buyer for a price."

    There are two parts of this definition :

    1. An actual Sale :-
    An actual sale property in goods transfers from sellers to buyers under the contract
    of sale.

    Example :- Suppose Miss. Rina enters into contract of sale of horse in the hand of
    Mr. Guru against Rs. 30,000. Mr. Guru pays Rs. 30,000 to Miss. Rina and she
    delivers her horse to Mr. Guru. It is a sale.

    2. An Agreement to Sell :-
    The contract is called agreement to sell when transfer of property takes place at a
    future time subject to some condition to be fulfilled.

    Example :- Suppose Miss. Poonam agrees with Mr. Mirza to sell him her house
    against Rs. 30 lac after the construction next year.

    DIFFERENCE BETWEEN SALE AND AGREEMENT TO SELL :-


    We can analyses the difference by the following facts :
    1. Transfer of Goods :-

    Sale : In case of sale property is transfers from seller to buyer.

    Agreement to sell : In case of agreement only promise is made to transfer the


    goods.

    2. Nature of Performance :-

    Sale : A sale is a contract which is being performed.

    Agreement to sell : An agreement to sell is a contract which is to be performed.

    3. Rights of Buyer and Seller :-

    Sale : Goods become the property of the buyer in case of sale.

    Agreement to sell : Goods remain the property of the seller in case of agreement.

    4. Insolvency of Buyer :-

    Sale : In a sale case seller can use his right of lien or stoppage.

    Agreement to sell : In case of agreement seller can refuse to deliver the goods if
    price is not paid.

    5. Buyer's Default :-

    Sale : In case of sale, a seller can claim for the price of goods.

    Agreement to sell : In case an agreement the seller can claim only for damages.
    6. Seller's Insolvency :-

    Sale : In case of sale a buyer has no risk.

    Agreement to sell : In case of agreement a buyer can claim only dividend.

    7. Seller's Default :-

    Sale : In case of sale the buyer has a personal remedy.

    Agreement to sell : In case of agreement the buyer can claim only for damages.

    8. Responsibility of Loss :-

    Sale : In case of sale the responsibility of loss by accident falls on the buyers.

    Agreement to sell : In case an agreement to sell responsibility of loss falls on the

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