《《Assignment of Contract 》》

Topic #1 what is distinction betwee sale and sell ?

Topic #2 what do you mean by term valuation and warrenty ?

Subject Contract Act 1872

Respected Teacher justice Arshad Noor Baloch

Name Azher Hussain

Bl no 0613

Semester 4th section (A)

Date 14 - 01-2019 ( Monday)

Difference Between Sale and Agreement to sell
A ‘Contract of Sale‘ is a type of contract whereby one party (seller) either transfers the ownership of
goods or agrees to transfer it for money to the

other party (buyer). A contract of sale can be a sale or an agreement to sell. In a contract of sale, when
there is an actual sale of goods, it is known as Sale whereas if there is an intention to sell the goods at a
certain time in future or some conditions are satisfied, it is called an Agreement to sell.

Both sale and agreement to sell are types of contract, wherein the former is an executed contract
whereas the latter represents an executory contract. Many law students get confused amidst these two
terms, but these are not one and the same. Here, in the article given below, we’ve explained the
difference between sale and agreement to sell, check it out.

Sale
A sale is a type of contract in which the seller transfers the ownership of goods to the buyer for a money
consideration. Here the relationship amidst the seller and buyer is of creditor and debtor. It is the result
of an agreement to sell when the conditions are fulfilled and the specified time is over.

The following are the essential conditions regarding Sale:

There must be at least two parties; one is the buyer, and other is the seller.The subject matter of the sale
is the goods.Payment should be made in the country’s legal currency.The goods should pass from seller
to buyer.All the necessary conditions of a valid contract should be present like free consent,
consideration, a lawful object, capacity of parties, etc.

If the goods are being sold and the property is transferred to the buyer, but the seller is not paid. Then,
the seller can go to the court and file a suit against the buyer for the damages and the price too. On the
other hand, if the goods are not delivered to the buyer then he can also sue the seller for damages

Agreement to Sell
An agreement to sell is also a contract of sale of goods, in which the seller agrees to transfer goods to
the buyer for a price at a later date or after the fulfilment of a condition.

When there is a willingness of the both the parties to constitute a sale i.e. the buyer agrees to buy, and
the seller is ready to sell the goods for monetary value. In an agreement to sell the performance of the
contract is done at a future date, i.e. when the time elapses or when the necessary conditions are
satisfied. After the contract is executed, it becomes a valid sale. All the necessary conditions required at
the time of sale should exist in the case of an agreement to sell too.

If the seller rescinds the contract, then the buyer can claim damages for the breach of contract. On the
other hand, the unpaid seller can also sue the buyer for damages.

Differences Between Sale and Agreement to Sell

The following are the major differences between sale and agreement to sell:

1 When the vendor sells goods to the customer for a price, and the transfer of goods from the vendor to
the customer takes place at the same time, then it is known as Sale. When the seller agrees to sell the
goods to the buyer at a future specified date or after the necessary conditions are fulfilled then it is
known as Agreement to sell.

2 The nature of sale is absolute while an agreement to sell is conditional.

3 A contract of sale is an example of Executed Contract whereas the Agreement to Sell is an example of
Executory Contract.

4 Risk and rewards are transferred with the transfer of goods to the buyer in Sale. On the other hand,
risk and rewards are not transferred as the goods are still in possession of the seller.

5 If the goods are lost or damaged subsequently, then in the case of sale it is the liability of the buyer,
but if we talk about an agreement to sell, it is the liability of the seller.

6 Tax is imposed at the time of sale, not at the time of agreement to sell.

7 In the case of a sale, the right to sell the goods is in the hands of the buyer. Conversely, in agreement
to sell, the seller has the right to sell the goods.

Conclusion
Under Indian Sale of Goods Act 1930, section 4 (3) deals with the contract of sale and agreement to sell,
where it has been clarified that the agreement to sell also come under sale. However, there is a
distinction between these two terms which we discussed above.

What is a Valuation
Valuation is the process of determining the current worth of an asset or a company. There are many
techniques used for doing a valuation. An analyst placing a value on a company looks at the business's
management, the composition of its capital structure, the prospect of future earnings, and the market
value of its assets.

A valuation can be useful when trying to determine the fair value of a security, which is determined by
what a buyer is willing to pay a seller, assuming both parties enter the transaction willingly. When a
security trades on an exchange, buyers and sellers determine the market value of a stock or bond. The
concept of intrinsic value, however, refers to the perceived value of a security based on future earnings
or some other company attribute unrelated to the market price of a security. That's where valuation
comes into play. Analysts do a valuation to determine whether a company or asset is overvalued or
undervalued by the market.

How Earnings Affect Valuation

The earnings per share (EPS) formula is stated as earnings available to common shareholders divided by
the number of common stock shares outstanding. EPS is an indicator of company profit because the
more earnings a company can generate per share, the more valuable each share is to investors. Analysts
also use the price-to-earnings (P/E) ratio for stock valuation, which is calculated as market price per
share divided by EPS. The P/E ratio calculates how expensive a stock price is relative to the earnings
produced per share.

For example, if the P/E ratio of a stock is 20 times earnings, an analyst compares that P/E ratio with other
companies in the same industry and with the ratio for the broader market. In equity analysis, using ratios
like the P/E to value a company is called a multiples-based, or multiples approach, valuation. Other
multiples, such as EV/EBITDA, are compared with similar companies and historical multiples to calculate
intrinsic value.

Discounted Cash Flow Valuation

Analysts also place a value on an asset or investment using the cash inflows and outflows generated by
the asset, called a discounted cash flow (DCF) analysis. These cash flows are discounted into a current
value using a discount rate, which is an assumption about interest rates or a minimum rate of return
assumed by the investor. If a company is buying a piece of machinery, the firm analyzes the cash outflow
for the purchase and the additional cash inflows generated by the new asset. All the cash flows are
discounted to a present value, and the business determines the net present value (NPV). If the NPV is a
positive number, the company should make the investment and buy the asset.

Valuation Methods

There are various ways do a valuation. The discounted cash flow analysis mentioned above is one
method, which calculates the value of a business or asset based on its earnings potential. Other methods
include looking at past and similar transactions of company or asset purchases, or comparing a company
with similar businesses and their valuations.
The comparable company analysis is a method that looks at similar companies, in size and industry, and
how they trade to determine a fair value for a company or asset. The past transaction method looks at
past transactions of similar companies to determine an appropriate value. There's also the asset-based
valuation method, which adds up all the company's asset values, assuming they were sold at fair market
value, and to get the intrinsic value. Sometimes doing all of these and then weighing each is appropriate
to calculate intrinsic value. Meanwhile, some methods are more appropriate for certain industries and
not others. For example, you wouldn't use an asset-based valuation approach to valuing a consulting
company that has few assets; instead, an earnings-based approach like the DCF would be more
appropriate.

warranty
General: Legally binding assurance (which may or may not be in writing) that a good or service is, among
other things, (1) fit for use as represented, (2) free from defective material and workmanship, (3) meets
statutory and/or other specifications. A warranty describes the conditions under, and period during,
which the producer or vendor will repair, replace, or other compensate for, the defective item without
cost to the buyer or user. Often it also delineates the rights and obligations of both parties in case of a
claim or dispute.

Contracting: Expressed or implied undertaking that a certain fact regarding the subject matter of a
contract is, or will be, true.

Unlike conditions (the central points), warranties are deemed incidental points, and a breach of warranty
is usually not a valid reason for voiding a contract but it entitles the aggrieved party to damages. See also
innominate term and intermediate term.

Insurance: Written pledge by the insured party that a specified condition exists or does not exist. Breach
of warranty entitles the insurer to treat the insurance contract as void even if the actual loss is
unaffected by the breach. See also representation.

USAGE EXAMPLES

The day my clothes washer's warranty expired it stopped working and I had to pay for the expensive
repairs and replacement parts myself.

Fortunately we purchased the warranty which came in use as the engine did not last long at all in our
new used car.

This warranty will cover all repairs at 100% cost for a period of 24 months from the date of purchase
provided the device is brought to the location on the front of the package.