Difference between sale and agreement to sell

Difference between sale and agreement to sell 

Introduction:

The sale of goods act 1930 is based mainly on the English sale of goods act 1893. The act was previously continued in the Indian contract act 1872( sec 76-123).Though the law relating to the sale of goods is now enacted in a separate act, the unrepealed provisions of the contract act are to continue to apply to contract for the sale of goods.

Meaning of sale & agreement to sell 

Section 4(1) states sale is a contract whereby, the seller transfers or agrees to transfer the property in goods to the buyer for a price. Such an event of sale is fixed, conditional and binding upon both the parties. A contract of sale is made with an idea to purchase or sell merchandise at a cost and the affirmation of such

An agreement to sell can be stated as the transfer of property in goods that is to take place in future time or the transfer might take place depending on the fulfilment of certain conditions. The same had been defined in section 4(3).

An agreement” to sell also become a sale when the given time elapses or the conditions that are needed for the transfer gets fulfilled. Thus, an agreement to sell establishes the terms and conditions of the offer of a property by the seller to the buyer .

Points of Differences :

  • The various differences between the two can be illustrated below:
  • If the property (ownership)in the goo ds passes from the seller to the buyer at the time of making the “sale”,eg sale of the whole of the haystack on the sellers farm , the buyer having the liberty to take away when he likes.
  • Whereas, if the passing in the good is postponed until some future time or fulfillment of certain conditions, it is an “agreement to sell “.
  • In case of sale , the buyer becomes the owner of the goods at the time of making of contract.
  • Whereas in an agreement to sell , he is to become owner of goods at a later time .(and then the agreement to sell becomes a sale)
  • After making the contract , there occurs a loss or damage of goods then it has to be borne by the buyer.
  • But in agreement to sell , while the seller is still the owner of the goods , the loss ,has to be borne by the seller.
  • In case of sale, if the buyer wrongfully neglects or refuses to pay for the goods According to the term of the contract, the seller may sue him for the price of the goods.
  • In case of agreement to sell, the seller being still the owner of the goods can dispose them off and therefore if the buyer wrongfully neglects or refuses to accept and pay for goods the seller may sue him for damages for non -acceptance.
  • Sale is an executed contract, where there is a contract and a conveyance.
  • Whereas, agreement to sell is executory
  • Sale is right in rem, agreement to sell is right in personam.
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Conclusion:

Sale and Agreement to sell, appears to be under a similar non exclusive name yet at the same time it is to be treated under various classifications. Along these lines so as to set up a deal there must be an understanding which may communicated or inferred relating to the idea of items and satisfaction of the condition would result in going off the title in the very products contracted to be sold.

Author: Harshita Swami,
Guwahati University BALLB9th sem

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