Difference between Sale and Agreement to Sell
Introduction;-
Sales of Goods Act deal with all those agreements and contracts in which the transfer of moveable property from one person to another takes place. There occur numerous contracts for the sale of goods in which either the goods are delivered immediately or they are delayed to a certain date. These two possibilities are explored in this Act under two different topics which are 'Sale & Agreement to Sell'.
Contract of Sale
Under Section#4(1) of Sale of Goods Act, "A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to buyer for a price."
Agreement to Sell
Definition of agreement to sell;-
We have studied that, sale is a contract in which there occurs immediate transfer of possession of goods for a price; on the other hand, Section#4 (3) of the same Act introduces us with 'Agreement to Sell'. It states that, "An agreement to sell is an agreement whereby the transfer of the property in goods is to take place at a future time or subject to some condition thereafter to be fulfilled."
Illustration;-
Barring the presence of two parties, fixation of price and moveable property as essentials of the agreement to sell; it is the fourth requisite that differs from that of 'contract of sale'. Here, the transfer of goods has not been accomplished but it is due to a certain date in future or is contingent with the fulfillment of some condition.
Difference between Sale and Agreement to Sell
1)Transfer of Property;-
Sale
In sale of contract, goods are immediately transferred to the buyer.
Agreement to Sell
In this case, goods sold are to be transferred at a certain date in future.
2)Existence of Goods;-
Sale
This contract takes place over the existing specific goods.
Agreement to Sell
The goods may exist or may the contract have been made over contingent goods.
3)Burden to Bear Loss;-
Sale
In sale contract, if the goods are destroyed, then the buyer who has paid the price will bear the loss.
Agreement to Sell
The seller will bear the loss in case if the goods are deteriorated.
4)Breach by Seller;-
Sale
In case the breach of sale contract is observed by seller, the buyer can sue him for damages as well as can follow the goods in the hands of third person.
Agreement to Sell
In this case, if the breach is observed by the seller, buyer can only sue him for damages but not receive the goods as it was still seller's property.
5)Insolvency of Seller;-
Sale
If the seller becomes solvent, the buyer is entitled to recover the goods for which he has paid.
Agreement to Sell
In this case, the buyer who has paid but has not attained the possession of goods yet may claim for the paid money back.
6)Insolvency of Buyer;-
Sale
If buyer becomes insolvent without having paid for goods, the seller can claim for recovery of price.
Agreement to Sell
Here, the seller can refuse to deliver the goods to the buyer.
7)Right to Release;-
Sale
In this type, seller who has been paid for the goods cannot resale those goods even if they are in his possession.
Agreement to Sell
In agreement to sell, if the seller resells, the buyer can sue him for breach of contract only.
