Question 4 (a)
Contract of sale; sale and agreement to sell
6 marks
- Time to write
- About 12 minutes
Question
Question 4 (a) · 6 marksAs per the Sale of Goods Act, 1930, define the term 'Contract of Sale'. Differentiate a sale from an agreement to sell.
Reworded from the university paper; the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.
Before you write
Read off the question and its marks
Read from the question
- DefineA precise definition in one or two lines.
Write it in this order
- Read; underline the asks; jot your points 1 min
- 1 Contract of sale; sale and agreement to sell defined 3 marks 5 min
- 2 Differences 3 marks 5 min
- Check: every ask answered, key terms underlined 1 min
Short on time? Trim steps 1 and 2 evenly rather than skip one: each is capped at its own marks.
Try it first. About 12 minutes for 6 marks. Write it out, then open the solution.
Solution
Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.
Contract of sale (s. 4(1), Sale of Goods Act, 1930). A contract under which the seller transfers, or agrees to transfer, ownership of goods to the buyer for a price. Its essentials are: two parties (seller and buyer, who must be different persons); goods (movable property) as the subject matter; a price in money (though the consideration may be partly in money and partly in kind); and a transfer of property in the goods, or an agreement to transfer it. The contract may be absolute or conditional, and it must also have the other elements of a valid contract, such as free consent, competent parties, a lawful object and consideration.
1The sofa is paid for and ribboned—when it burns that night, the loss is the buyer's.
SaleProperty passes to the buyer at once; loss falls on the buyer.
2The chair is still under the carpenter's hammer—until it is finished and handed over, it burns as the seller's.
Agreement to sellProperty passes at a future time or on fulfilment of a condition; loss falls on the seller.
Sale. Where a contract of sale passes the property in the goods from the seller to the buyer at once, the contract is called a sale (s. 4(3)).
Agreement to sell. Where the transfer of property is to take place at a future time or subject to a condition later to be fulfilled, the contract is an agreement to sell. It becomes a sale when the time elapses or the condition is fulfilled (s. 4(4)).
Differences. On risk, the rule that it follows the property is a prima facie rule only: it holds unless the parties agree otherwise.
| Basis | Sale | Agreement to sell |
|---|---|---|
| Transfer of property | Property passes to the buyer at once | Property passes at a future time or on fulfilment of a condition |
| Nature of contract | An executed contract | An executory contract |
| Risk | Passes to the buyer with the property (prima facie), so loss falls on the buyer | Remains with the seller, so loss falls on the seller |
| Nature of rights | Jus in rem: rights against the whole world | Jus in personam: rights against the other party only |
| Remedy of the seller | Suit for the price | Suit for damages (or for the price where it is payable on a stated day irrespective of delivery) |
| Right of resale | The seller cannot resell (subject to the exceptions in the Act) | The seller may sell to another and is liable only in damages |
| Insolvency of the seller | The official assignee cannot take the goods, which belong to the buyer; he can only recover any unpaid price from the buyer | The goods pass under the official assignee's control, and the buyer cannot claim them |
| Insolvency of the buyer | The seller must deliver the goods to the official receiver unless he has a lien | The seller may refuse to deliver until paid |
Where the 6 marks sit
| # | Component | Marks |
|---|---|---|
| 1 | Contract of sale; sale and agreement to sell defined | 3 |
| 2 | Differences | 3 |
| Total | 6 |
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