Distinguish between sale and an agreement to sell.
Meaning of Sale
A sale is a transaction in which the ownership of goods, property, or services is transferred from the seller to the buyer for a price. It is a completed contract where all terms, including payment and delivery, are fulfilled immediately or as agreed. A sale is a legally binding contract between buyer and seller.
Example: If you buy a laptop from a store and pay for it, the ownership and risk transfer to you immediately.
Meaning of Agreement to Sell
An agreement to sell is a legal contract in which a seller agrees to transfer ownership of goods or property to a buyer at a future date, subject to certain conditions. It is different from a sale, as the ownership does not immediately transfer upon signing the agreement. Instead, it is a promise that the sale will take place in the future when the agreed conditions are met. Distinguish between sale and agreement to sell
For Example, in real estate, an agreement to sell a house means the buyer and seller have agreed on the terms, but the ownership will only transfer when the full payment is made and legal formalities are completed. Distinguish between sale and agreement to sell
The key differences between a sale and an agreement to sell are as follows:
Basis of Difference
Definition
Sale:- A sale is a contract where ownership of goods is transferred from the seller to the buyer immediately.
Agreement to Sell:- An agreement to sell is a contract where the transfer of ownership is to take place at a future date or upon the fulfillment of certain conditions. Distinguish between sale and agreement to sell
Transfer of Ownership
Sale:- Ownership passes to the buyer immediately.
Agreement to sell:- Ownership remains with the seller until the agreed conditions are met.
Risk Involved
Sale:- The risk of loss or damage transfers to the buyer upon sale.
Agreement to sell:- The seller bears the risk until ownership is transferred.
Nature of Contract
Sale:- It is an executed contract (completed).
Agreement to sell:- It is an executory contract (to be completed in the future).
Consequences of Breach
Sale:- If the seller breaches, the buyer can sue for damages and demand delivery.
Agreement to sell:- If the seller breaches, the buyer can only sue for damages, not demand delivery. Distinguish between sale and agreement to sell
Example
Sale:- A person buys a car and gets ownership immediately.
Agreement to sell:- A person books a car that will be delivered next month.
Conclusion:- A sale is the immediate transfer of ownership of goods or property, whereas an agreement to sell is a future commitment to transfer ownership upon fulfilling certain conditions. In a sale, the risk transfers immediately, while in an agreement to sell, the risk remains with the seller until the actual sale takes place. You can check the syllabus of commercial law on the official website of Gndu.
Important questions of commercial law is following.
Features of contract indemnity contract.
Unpaid Seller’s Rights Against Buyer