Tuesday, December 25, 2012

What is sale and agreement to sale?

According to section 4 of The Sale of Goods Act, 1930
  • The contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. There may be a contract of sale between one part owner and another.
  • A contract of sale may be absolute or conditional.
  • Where under a contract of sale the property in the goods is transferred from the seller to the buyer, the contract is called a sale, but where 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 an agreement to sell.
  • An agreement to sell becomes a sale when the time elapses; all the conditions are fulfilled subject to which the property in the goods is to be transferred.  

  • The Section may be illustrated by the following examples:
  • A agrees to buy a haystack from B on B’s land with liberty to come on B’s land to take it away. This is a sale and B cannot revoke the licence given to A to woo on his land. (Wood Vs Manley 1839)
  • Agreement by A to buy 20 tonnes of oil from the seller’s cisterns. The seller has many cisterns, with more than 20 tonnes in them. This is merely an agreement to sale. (White Vs Wilks, 1813)
  • Agreement for sale of a quantity of nitrate of soda to arrive at a certain ship. This is an agreement to sell at a future date subject to the double condition of the arrival of the ship with the specified cargo on board. (Johnson Vs Macdonald 1842)
  • A customer who picks up goods in a self-service shop is merely offering to buy them and the sale is not complete until they are paid for. (Pharmaceutical Society Vs Boots, 1952)

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