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Difference between Sale and Agreement to Sell

Contract:

It is an agreement made between two or more parties which the law will
enforce.

According to [Sec 2(h)] of Indian Contract Act 1872 defines

“A contract is an agreement enforceable by law”.

According to Salmond

“A contract is an agreement creating and defining obligation between
the parties.”

Difference between Sale and Agreement to Sell

   1. Transfer of property

   Sale : The property of goods passes from the seller to the buyer
   immediately. So the seller is no more owner of the goods sold.

   In an Agreement to Sell : The transfer of property of the goods is to take
   place at a future time or subject to certain conditions to be fulfilled.

   2. Type of goods

   Sale : A sale can only be in case of existing and specific goods only.

   In an Agreement to Sell : An agreement to sell is mostly in case of future
   and contingent goods ( associated or dependent ). Although it may refer
   to uncertain existing goods.

   3. Risk of loss

    Sale : In a sale if the goods are destroyed , the loss falls on the buyer
   even though the goods are in the posssession of the seller.
In an Agreement to Sell : In an Agreement to Sell if the goods are
destroyed the loss falls on the seller even though the goods are in the
posssession of the buyer.

4. Consequences of the breach

Sale : In a sale the buyer fails to pay the price of goods (or) if there is a
breach of contract by the buyer the seller can sue for the price even
though the goods are still in his possession.

In an Agreement to Sell : If there is a breach of contract by the buyer the
seller can only sue for the damages and not for the price.

5. Right to re-sell

Sale : In a sale the seller cannot re-sell the goods.

In an Agreement to Sell : The buyer who takes the goods for
consideration and without notice of the prior agreement gets him a good
title. The original buyer can only sue the seller for damages.

6. General and particular property

Sale : The sale of contract plus conveyance and creates ‘Jus in rem’ i.e.,
gives right to the buyer to enjoy the goods as against the word and large
including the seller.

In an Agreement to Sell : An agreement to sell is merely a contract pure
and simple and creates ‘Jus in personam’ i.e., gives a right to the buyer
against the seller to sue for the damages.

7. Insolvency of buyer

Sale : In a sale if the buyer becomes insolvent before he pays for goods,
the seller in the absence of the lien over the goods, must return them to
the official receiver or assignee. He can only claim the reteable dividend
for the price of the goods.
In an Agreement to Sell : In an Agreement to Sell , If the buyer becomes
   insolvent and has not yet paid the price the seller is not bound to part
   with the goods until he is paid for.

   8. Insolvency of the seller

   Sale : In a sale the seller becomes insolvent, the buyer being the owner is
   entitled to recover the goods from the official receiver of the assignee.

   In an Agreement to Sell : If the buyer who has paid the price, finds that
   the seller has become insolvent he can only claim a reteable dividend and
   not the goods because property in them has not yet passed to him.


A "sale" is (colloquially) a completed transaction where the only remaining
duties of the buyer may be timely rejection after inspection, and the only
remaining duty of seller is to honor any express or implied warranty. This
assumes the full price was paid during the sale and the goods were delivered,
otherwise,     the      sale    is    not      technically    complete.

An "agreement to sell" is a contract that envisions (or defines) a future sale,
thus all conditions precedent and other terms (delivery, payment, etc),
continue to be "executory", that is, are yet to be fully carried out. A breach
of this contract could result in a court order of specific performance, or for
damages caused by the loss of the opportunity to buy or sell.

Difference between Sale and Agreement to Sell:
Sale is an executed contract while agreement to sell is an executory contract.

In sale property transfers immediately at the time of sale but in agreement
to sell property is transferred after sometime.

A sale creates jus-in-ram (right against the whole world). But agreement to
sell create jus-in-personam (right against an individual)

In case of sale risk passes along with the property, in case of agreement to
sell as the property is not transferred, risk is also not transferred.

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Difference between sale and agreement to sell

  • 1. Difference between Sale and Agreement to Sell Contract: It is an agreement made between two or more parties which the law will enforce. According to [Sec 2(h)] of Indian Contract Act 1872 defines “A contract is an agreement enforceable by law”. According to Salmond “A contract is an agreement creating and defining obligation between the parties.” Difference between Sale and Agreement to Sell 1. Transfer of property Sale : The property of goods passes from the seller to the buyer immediately. So the seller is no more owner of the goods sold. In an Agreement to Sell : The transfer of property of the goods is to take place at a future time or subject to certain conditions to be fulfilled. 2. Type of goods Sale : A sale can only be in case of existing and specific goods only. In an Agreement to Sell : An agreement to sell is mostly in case of future and contingent goods ( associated or dependent ). Although it may refer to uncertain existing goods. 3. Risk of loss Sale : In a sale if the goods are destroyed , the loss falls on the buyer even though the goods are in the posssession of the seller.
  • 2. In an Agreement to Sell : In an Agreement to Sell if the goods are destroyed the loss falls on the seller even though the goods are in the posssession of the buyer. 4. Consequences of the breach Sale : In a sale the buyer fails to pay the price of goods (or) if there is a breach of contract by the buyer the seller can sue for the price even though the goods are still in his possession. In an Agreement to Sell : If there is a breach of contract by the buyer the seller can only sue for the damages and not for the price. 5. Right to re-sell Sale : In a sale the seller cannot re-sell the goods. In an Agreement to Sell : The buyer who takes the goods for consideration and without notice of the prior agreement gets him a good title. The original buyer can only sue the seller for damages. 6. General and particular property Sale : The sale of contract plus conveyance and creates ‘Jus in rem’ i.e., gives right to the buyer to enjoy the goods as against the word and large including the seller. In an Agreement to Sell : An agreement to sell is merely a contract pure and simple and creates ‘Jus in personam’ i.e., gives a right to the buyer against the seller to sue for the damages. 7. Insolvency of buyer Sale : In a sale if the buyer becomes insolvent before he pays for goods, the seller in the absence of the lien over the goods, must return them to the official receiver or assignee. He can only claim the reteable dividend for the price of the goods.
  • 3. In an Agreement to Sell : In an Agreement to Sell , If the buyer becomes insolvent and has not yet paid the price the seller is not bound to part with the goods until he is paid for. 8. Insolvency of the seller Sale : In a sale the seller becomes insolvent, the buyer being the owner is entitled to recover the goods from the official receiver of the assignee. In an Agreement to Sell : If the buyer who has paid the price, finds that the seller has become insolvent he can only claim a reteable dividend and not the goods because property in them has not yet passed to him. A "sale" is (colloquially) a completed transaction where the only remaining duties of the buyer may be timely rejection after inspection, and the only remaining duty of seller is to honor any express or implied warranty. This assumes the full price was paid during the sale and the goods were delivered, otherwise, the sale is not technically complete. An "agreement to sell" is a contract that envisions (or defines) a future sale, thus all conditions precedent and other terms (delivery, payment, etc), continue to be "executory", that is, are yet to be fully carried out. A breach of this contract could result in a court order of specific performance, or for damages caused by the loss of the opportunity to buy or sell. Difference between Sale and Agreement to Sell: Sale is an executed contract while agreement to sell is an executory contract. In sale property transfers immediately at the time of sale but in agreement to sell property is transferred after sometime. A sale creates jus-in-ram (right against the whole world). But agreement to sell create jus-in-personam (right against an individual) In case of sale risk passes along with the property, in case of agreement to sell as the property is not transferred, risk is also not transferred.