Sales of Goods Act- Difference between Agreeement to Sale and Contract of Sale

Agreement To Sale

If transfer of property takes place at the time of making a contract,it will be contract of Sale as discussed here.

But when the transfer of property in the goods is to take place at the future time or subject to some conditions thereafter to be fulfilled, then it will be called as agreement to sell.

For example if A agrees to sale wheat which is growing in his farm after harvest to B, then it will be a agreement to sale.


Difference between agreement to sale and Contract to Sale

Transfer of property : In contract of sale ownership is transferred to buyer as soon as contract is executed, whereas in agreement to sell, ownership in transfer will be transferred in future date or completion of certain condition imposed upon buyer.

Types of Goods : Subject matter of contract of sale is specified goods or existing goods as good has to be determined at the time of contract. Whereas in agreement to sale, goods could be future goods as well apart from Existing goods.

Risk of goods: In case the goods get destroyed, in contract of sale, buyer will be liable for such loss, whereas in agreement to sale seller will be liable.

Right to Resale : No right of resale of goods to seller once contract of sell is executed. Whereas in agreement to sell, seller may resale the goods.

Consequences of resale : In case of contract of sale, buyer can file a tort suit against seller for conversion if seller resold to some other person. In case of agreement of sale, buyer can file a suit for damages.

Nature of rights : Buyer's right will in goods will be right in rem, that is against whole world. In case of agreement of sale, buyer's rights will be only against seller to have delivery of agreed goods.

Insolvency of buyer:  Generally after person becomes insolvent all his assets is liquidated to pay debts. In case buyer gets insolvent before he pays, seller may ask money from collected fund by assignee. In case buyer had paid, but goods are not received, then official assignee can ask for delivery of goods. This is about contract of sale.

In agreement to sale, seller has right to lien and may refuse the delivery of goods if buyer is unable to pay.

Insolvency of seller : If seller becomes insolvent and buyer had already paid the amount, he can recover the amount from official assignee in case of contract of sale. If it's agreement to sale there may no involvement of buyer if amount is not paid.

Contract of Sale is generally executed contract, whereas in agreement to sale contract may be executory in nature.



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