Difference between Sale and Agreement to Sell

Contract:

It is an agreement made between two or more parties which the law will
enforce.

According to [Sec 2(h)] of Indian Contract Act 1872 defines

“A contract is an agreement enforceable by law”.

According to Salmond

“A contract is an agreement creating and defining obligation between

the parties.”

Difference between Sale and Agreement to Sell

1. Transfer of property

Sale : The property of goods passes from the seller to the buyer
immediately. So the seller is no more owner of the goods sold.

In an Agreement to Sell : The transfer of property of the goods is to take

place at a future time or subject to certain conditions to be fulfilled.

2. Type of goods

Sale : A sale can only be in case of existing and specific goods only.

In an Agreement to Sell : An agreement to sell is mostly in case of future

and contingent goods ( associated or dependent ). Although it may refer
to uncertain existing goods.

3. Risk of loss

Sale : In a sale if the goods are destroyed , the loss falls on the buyer
even though the goods are in the posssession of the seller.
In an Agreement to Sell : In an Agreement to Sell if the goods are
destroyed the loss falls on the seller even though the goods are in the
posssession of the buyer.

4. Consequences of the breach

Sale : In a sale the buyer fails to pay the price of goods (or) if there is a
breach of contract by the buyer the seller can sue for the price even
though the goods are still in his possession.

In an Agreement to Sell : If there is a breach of contract by the buyer the

seller can only sue for the damages and not for the price.

5. Right to re-sell

Sale : In a sale the seller cannot re-sell the goods.

In an Agreement to Sell : The buyer who takes the goods for

consideration and without notice of the prior agreement gets him a good
title. The original buyer can only sue the seller for damages.

6. General and particular property

Sale : The sale of contract plus conveyance and creates ‘Jus in rem’ i.e.,
gives right to the buyer to enjoy the goods as against the word and large
including the seller.

In an Agreement to Sell : An agreement to sell is merely a contract pure

and simple and creates ‘Jus in personam’ i.e., gives a right to the buyer
against the seller to sue for the damages.

7. Insolvency of buyer

Sale : In a sale if the buyer becomes insolvent before he pays for goods,
the seller in the absence of the lien over the goods, must return them to
the official receiver or assignee. He can only claim the reteable dividend
for the price of the goods.
 In an Agreement to Sell : In an Agreement to Sell , If the buyer becomes
insolvent and has not yet paid the price the seller is not bound to part
with the goods until he is paid for.

8. Insolvency of the seller

Sale : In a sale the seller becomes insolvent, the buyer being the owner is
entitled to recover the goods from the official receiver of the assignee.

In an Agreement to Sell : If the buyer who has paid the price, finds that
the seller has become insolvent he can only claim a reteable dividend and
not the goods because property in them has not yet passed to him.

A "sale" is (colloquially) a completed transaction where the only remaining

duties of the buyer may be timely rejection after inspection, and the only
remaining duty of seller is to honor any express or implied warranty. This
assumes the full price was paid during the sale and the goods were delivered,
otherwise, the sale is not technically complete.

An "agreement to sell" is a contract that envisions (or defines) a future sale,

thus all conditions precedent and other terms (delivery, payment, etc),
continue to be "executory", that is, are yet to be fully carried out. A breach
of this contract could result in a court order of specific performance, or for
damages caused by the loss of the opportunity to buy or sell.

Difference between Sale and Agreement to Sell:

Sale is an executed contract while agreement to sell is an executory contract.

In sale property transfers immediately at the time of sale but in agreement

to sell property is transferred after sometime.

A sale creates jus-in-ram (right against the whole world). But agreement to
sell create jus-in-personam (right against an individual)

In case of sale risk passes along with the property, in case of agreement to
sell as the property is not transferred, risk is also not transferred.