Overview
This lecture explains the differences between a sale and an agreement to sell under the Sale of Goods Act, 1930, and defines the term "goods" along with their classification.
Differences Between Sale and Agreement to Sell
- A sale is an absolute transaction; ownership transfers immediately from seller to buyer.
- An agreement to sell is conditional; ownership transfers on a future date or when conditions are fulfilled.
- In a sale, the buyer becomes owner immediately; in an agreement to sell, the seller remains owner until the transfer is complete.
- A sale is an executed contract (all obligations fulfilled); an agreement to sell is executory (obligations yet to be performed).
- A sale grants the buyer a right against the property (just in rem); an agreement to sell gives a right against the seller (just in personam).
- Only existing goods can be sold; an agreement to sell may pertain to existing, future, or contingent goods.
- If the seller breaches a sale, the buyer can claim the goods; if the seller breaches an agreement to sell, the buyer claims damages only.
- After a sale, the risk of goods’ destruction passes to the buyer; after an agreement to sell, the seller bears the risk until ownership passes.
Meaning and Classification of Goods
- Goods are the subject matter of a contract of sale and must be movable property.
- Goods exclude actionable claims and money but include shares, stocks, growing crops, grass, and items attached to or forming part of land if severed at sale.
- Three main types of goods: existing goods, future goods, and contingent goods.
Types of Goods
- Existing Goods: Owned and possessed by seller at contract time; can be:
- Specific Goods: Identified and agreed upon at contract.
- Ascertained Goods: Identified after contract formation.
- Unascertained Goods: Not specifically identified until after contract.
- Future Goods: To be manufactured or acquired by seller after contract is made; only subject to agreement to sell.
- Contingent Goods: Acquisition depends on uncertain future event; contract enforceable only if the event occurs.
Key Terms & Definitions
- Sale — Immediate transfer of ownership from seller to buyer.
- Agreement to Sell — Transfer of ownership occurs on a future date or upon fulfillment of conditions.
- Goods — Movable property excluding actionable claims and money; includes shares, crops, etc. (Sec. 2(7), Sale of Goods Act).
- Specific Goods — Goods identified and agreed upon at contract.
- Ascertained Goods — Goods identified after contract formation.
- Unascertained Goods — Goods not identified at contract formation.
- Future Goods — Goods to be made or acquired after contract.
- Contingent Goods — Goods whose acquisition depends on a future uncertain event.
- Just in Rem — Right against the property.
- Just in Personam — Right against a person.
Action Items / Next Steps
- Review and compare the definitions and differences between sale and agreement to sell.
- Prepare for questions on types and classification of goods for exams.
- Watch the next lecture for further discussion on the Sale of Goods Act, 1930.