What is Sale?
In Sale, the goods are transferred from the seller to the buyer immediately. The sale is considered when under a contract, the goods are transferred from the seller to the buyer at an agreed price, the contract is called a Sale. A contract of sale might be made in writing or may initiated by word of mouth, or partly in writing or partly orally, or can either be implied from the conduct of the parties. The process of forming a contract of sale has been explained in Section 5 of the Act. Contract of Sale is majorly concerned with existing goods; however, it may also include owned goods, possessed goods, or future goods. The contract of sale has the following essential elements:
- There must be at least two parties.
- The subject matter of the contract should be goods.
- The contract should mention the agreed price.
- Transfer of property in goods from seller to buyer.
- The contract of sale may either be absolute or conditional.
- All other essential elements of a valid contract must exist.
For example, Ravish agreed to purchase a laptop from Barkha. Barkha quoted the price of the laptop at ₹20,000. Ravish agreed to the price and paid the same. Barkha transferred the goods to Ravish on the said date. This is a basic Contract of Sale.
Difference between Sale and Agreement to Sell
The sale of commodities is one of the most important types of contract under Indian laws. Sale transfers ownership of goods immediately, whereas an Agreement to Sell only promises to transfer ownership at a future date or upon certain conditions. The Sale of Goods Act, 1930 has been codified and made as a separate enactment to contain the provisions relating to the Sale of Goods, as this was earlier contained under Sections 76 to 123 of the Indian Contract Act, 1872. This act was passed because the provisions of the Contract Act were found to be inadequate to deal with new situations that were arising due to an increase in mercantile situations.
As per Section 2 of the Sale of Goods Act, 1930, “a Contract of Sale is a term that includes both Sale and Agreement to Sell and is characterized by an offer to buy goods for a price or an offer to sell goods for a price, and acceptance of the offer.”
Table of Content
- What is Sale?
- What is an Agreement to Sell?
- Difference between Sale and Agreement to Sell
- Conclusion
- Frequently Asked Questions (FAQs)
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