A sale is a type of contract in which the seller transfers the ownership of goods to the buyer for a money consideration. Here the relationship between the seller and buyer is of creditor and debtor.
It is the result of an agreement to sell when the conditions are fulfilled and the specified time is over.
The following are the essential conditions regarding Sale:
- There must be at least two parties; one is the buyer, and other is the seller.
- The subject matter of the sale is the goods.
- Payment should be made in the country’s legal currency.
- The goods should pass from seller to buyer.
- All the necessary conditions of a valid contract should be present like free consent, consideration, a lawful object, capacity of parties, etc.
If the goods are being sold and the property is transferred to the buyer, but the seller is not paid. Then, the seller can go to the court and file a suit against the buyer for the damages and the price too. On the other hand, if the goods are not delivered to the buyer then he can also sue the seller for damages.
Definition of Agreement to Sell
An agreement to sell is also a contract of sale of goods, in which the seller agrees to transfer goods to the buyer for a price at a later date or after the fulfillment of a condition.
When there is a willingness of both the parties to constitute a sale i.e. the buyer agrees to buy, and the seller is ready to sell the goods for monetary value. In an agreement to sell the performance of the contract is done at a future date, i.e. when the time elapses or when the necessary conditions are satisfied. After the contract is executed, it becomes a valid sale. All the necessary conditions required at the time of sale should exist in the case of an agreement to sell too.
If the seller rescinds the contract, then the buyer can claim damages for the breach of contract. On the other hand, the unpaid seller can also sue the buyer for damages.
Main Differences between Sale and Agreement to Sell
| Sr. No | Sale | Agreement to Sell |
| 1 | Meaning: where the Property immediately transferred from seller to buyer, it is called ‘Sale’. | Meaning: where the transfer of property in goods is to take place in future, from the seller to buyer is called ‘Agreement to Sell’. |
| 2 | Definition: Sale can be defined as “transfer of ownership in the goods by the seller to buyer in exchange of price paid or promised or partly paid and partly promised. | Definition: in the case where the seller agrees with the buyer to transfer the title of ownership on a future date upon satisfying a certain condition is called as ‘Agreement to Sale’. |
| 3 | Example: ‘X’ sold 10 bags of Rice to ‘Y’ against payment of Rs. 5,000. | Example: ‘X’ agrees to sell 10 bags of Rice to ‘Y’ for Rs.5,000 after getting the stock. |
| 4 | In a contract of sale property in goods transfers from the seller to the buyer immediately | In agreement to sell, property in goods does not transfer immediately |
| 5 | Contract of sale is an executed contract | Agreement to Sell is an executory contract |
| 6 | The seller can sue the buyer in case of breach of contract. | The seller can sue the buyer only for damages but not for the price. |
| 7 | Sale is liable for the Sale Tax. | Agreement to sale is not liable for the Sale Tax. |
| 8 | The seller has no right of resale. | The seller has right of resale |
| 9 | If the goods are destroyed, the loss is borne by the buyer even though the goods are in the possession of the seller. | The loss fall on the seller even though the goods are in the possession of the buyer. |