sale and agreement to sale

differences between sale and agreement to sale

1. JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY KAKINADA SCHOOL OF MANAGEMENT STUDIES Legal Aspects Of Business Distinction Between Sales And Agreement Presented by: Keerthi Pinipe 18021E00

2. Contract of sale Section 4(1) of the Sale of Goods Act defines a Contract of Sale of goods as : ‘A Contract, whereby, the seller transfer or agrees to transfer the property in goods to the buyer for price’.

3. Definition According to Section 4(3) Transfer of ownership Nature of contract Sale ‘Where under a contract of sale the property in the goods is transferred from the seller to the buyer , the contract is Sale. Buyer Executed contract Agreement to Sale Where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled. Seller Executory contract Sale and An Agreement to Sell distinguished

4. 4. Nature of rights 5. Consequence of breach by buyer. 6. Risk of loss Sale A sale creates jus in rem , i.e , gives the right to the buyers. The seller may sue buyer for price. Falls on buyer. Agreement to Sale Creates merely jus in personam i.e , the right to either party. The only remedy available to the seller is sue for the damages. He cannot sue for the price. Risk falls on seller Sale and An Agreement to Sell distinguished

5. 7. Insolvency of the seller 8. Insolvency of the buyer Sale The buyer is entitled to recover the goods from the assignee or the official receiver. The seller must deliver the goods to the official receiver or assignee. He is entitled only to ratable dividend for the unpaid price Agreement to Sale The buyer cannot claim the goods even if he/she has paid the price. The seller may refuge to deliver the goods to the official receiver or assignee unless he has paid the full price. Sale and An Agreement to Sell distinguished

6. 9. Consequences in case of resale. Sale The original buyer have double remedy 1. A suit for damages against seller. 2. Right to recover the goods for the subsequent purchaser. Agreement to Sale The seller may dispose goods as he likes. The buyers remedy is only a suit for damages. Sale and An Agreement to Sell distinguished

7. References: “Legal Aspects Of Business”, By Ravindra Kumar.