This document defines and distinguishes between a contract of sale and an agreement to sell under the Sale of Goods Act. A contract of sale is defined as a contract where the seller transfers or agrees to transfer ownership of goods to the buyer for a price. In a contract of sale, ownership is transferred immediately from the seller to the buyer. An agreement to sell is an executory contract where the transfer of ownership will take place at a future time or subject to conditions. The key differences between a sale and agreement to sell are: a sale creates legal ownership rights for the buyer while an agreement to sell only creates personal rights; in a breach by the buyer, the seller can sue for the price in a sale but

1. 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’.
Contract of Sale
Sale
Agreement to
sell

3. 1. Definition
According to
Section 4(3)
2. Transfer of
ownership
3. 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.