Difference Between Sale and Agreement to Sell

The definition of contract of Sale of goods in Sale of Goods Act-1930,” A contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price”. Important words to note here is “Selling” or seller” Agrees to sell” a good. The remarkable difference in both the terms are as follows:

S.No Basis of Difference Contact of Sale(Absolute Sale) Agreement to Sell(Condition Sale)
1 Transfer of Property (Ownership ) Property in goods passes to the buyer immediately at the time of making the contract. It created “jus in rem” i.e gives right to the buyer to enjoy goods as against the whole world. There is no transfer of property to the buyer at the time of contract.
2 Risk of Loss If the goods are destroyed, the loss falls on the buyer even though the goods are in the possession of the seller. The loss falls on the seller, even if the goods are in the possession of the buyer.
3 Consequences of Breach If a buyer fails to pay the price of the goods or if there is a breach of contract by the buyer, the seller can sue him for the price. Even though the goods are still in his possession. If there is a breach of contract, The seller can sue for damages and not for the price.
4 Right of Resale Seller do not have any such right Seller can dispose of and original buyer can sue him for the breach of contract only.
5 Solvency of buyer before the pays for the goods If the buyer is adjudged in solver before the pays for the goods, the seller in the absence of “a right of lien” over the goods must deliver the goods to the official receive or assignee The seller may refuse to decline the goods to the official receiver or assignee, unless paid for, as ownership has not passed to the buyer.
6 Insolvency of seller if the buyer has already paid the price Buyer can recover the goods for official receiver or assignee. Buyer can claim rateable dividends.

Read out to know Kinds of Goods Click Here

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