AGREEMENT TO SELL

GOPIKA SP MGT 1105417

INTRODUCTION
Agreement to sell means ,the transfer of legal ownership of goods is to take place at a future date or subject to the fulfilment of certain condition

DEFINITION
The agreement to sell can be defined in section 4(3) of the Sales Goods Act, which reads as under

Where under a contract of sale the transfer of property in the goods is to take place at a future time or subject to some conditions thereafter to be fulfilled, the contract is called agreement to sell

Example
On 1st January , A agrees to sell his car to B for Rs 1 lakh on 1st March. This is an agreement to sell because the transfer of ownership of car takes place only at a future date

Difference between Sale and Agreement to sell

In a sale, the ownership of the goods is transferred from the seller to the buyer immediately after contract . An agreement to sell the ownership is to be transferred only at some future time or after the fulfilment of certain conditions. In a sale, if the goods are destroyed after the agreement, the loss falls on the buyer even though the goods are within the possesion of the seller

 In an agreement to sell if the goods are destroyed after agreement to sell, the loss as a rule, falls on the seller. A sale is executed contract. but an agreement to sell is an executory contract In a sale, if the buyer become insolvent before he pays for the goods the seller can claim rateable dividend for the price due. But in an t to agreement to sell if the buyer fails to accept and pay for the goods, the seller is only entitled to damages

 In a sale ,If the seller become insolvent the buyer is entitled to recover the goods from official receiver. But in an agreement to sell, if the seller becomes insolvent, the buyer who has paid the price can only claim rateable dividend In a sale if a buyer fails to pay the price, the seller can sue for the price. But in an agreement to sell if the buyers fails to accept and pay for the goods, the seller is only entitled to damages