Sale and Agreement to sell

2.  Sec 4(1) of the Indian Sale of Goods Act, 1930
defines the contract of he sale of goods in the
following manner:
“ A contract of sale of goods is a contract
whereby the seller transfers or agrees to
transfer the property in goods to the buyer for
a price”.

3. The term “Contract of sale of goods’ is a generic
term and it includes:
a. Sale and
b. An agreement to sell
where the seller transfers the ownership rights to
the buyer immediately on making the contract, it
is the contract of sale, but where the ownership
rights are to pass on some future date upon the
fulfillment of certain conditions then it is called an
agreement to sell.

4.  Two parties- buyer and seller
 Goods
 Price
 Transfer of general property
 Essential elements of a valid contract
 A contract of sale may be absolute or
conditional.

5. SALE
 Ownership passes to
the buyer.
 It is a executed contract.
 Risk of loss falls on the
buyer.
 Seller cannot resell the
goods.
 It can be in case of
existing and specific
goods.
AGREEMENTTO SELL
 Ownership remains with
the seller.
 It is a executory
contract.
 Risk of loss falls on the
seller.
 Seller can sell goods to
third party.
 It can be in case of
future and
unascertained goods.

6. SALE
 In case of breach of a
contract, seller can sue for
the price of the goods .
 The seller is only entitled to
the ratable dividend of the
price due if the buyer
becomes insolvent.
 The buyer is entitled to
recover the specific
property from the assignee
if the seller becomes
insolvent.
AGREEMENTTO SELL
 In case of breach of a
contract, seller can sue only
for damages not for the
price.
 The seller may refuse to
sell the goods to the
buyer w/o payments if the
buyer becomes insolvent.
 Buyer can claim only
ratable dividend for the
money paid.

7. SALE &AGREEMENTTO SELL-
DISTINCTION
1-Nature of contract
sale-a sale is an executed contract
Agreement to sell-is an executory contract.
2-Transfer of Property.
Sale-the property in goods passes from seller to
buyer immediately.
Agreement to sell-property in goods passes from
seller to buyer at some future date or subject to
fulfillment of certain condition.

8.  3 )Risk of loss-
in a sale if the goods are destroyed, the risk of
loss falls on the buyer even if the goods were
in the possession of seller.
In agreement to sell if goods are destroyed
the risk of loss falls on a seller even if the
goods were in the possession of buyer.

9.  4)Consequences of the breach
On breach of agreement to sell by the seller ,buyer
can sue the seller for damages.
But if after a sale the seller breaks the contract the
buyer may sue for delivery of goods or for damages.
In an agreement to sell ,if the buyer fails to accept the
goods the seller may sue for the damages only and
not for the price. On a sale ,if the buyer does not pay
the price ,the seller may sue for the price.

10. 5 )Insolvency of the buyer
in a sale if the buyer is adjudged an insolvent ,the
seller in the absence of a lien over the goods is
bound to deliver the goods to the official receiver or
assignee .The seller will ,however ,be entitled to a
rateable dividend for the price of goods.
In the agreement to sell, when the buyer becomes
insolvent before he pays for the goods ,the seller
may not part with the goods.

11. 6) Insolvency of the seller
In the sale ,if the seller becomes insolvent, the buyer is
entitled to recover the goods from the official receiver or
assignee.
In an agreement to sell , if the buyer has already paid the
price and the seller becomes insolvent ,buyer can claim only
a rateble dividend and not the goods.
8) Right of re-sales
In a sale ,the seller cannot resell the goods even if he is in
possession of goods after sale.
In an agreement to sell ,the seller may sell the goods since
ownership is with the seller.