Exercises · Q2
Q.Distinguish between Sale and Agreement to Sell.
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| Basis | Sale | Agreement to Sell |
|---|---|---|
| Transfer of ownership | Immediate | Postponed to a future date/condition |
| Nature of contract | Executed | Executory |
| Risk of loss | Generally passes to the buyer at once | Stays with the seller until ownership passes |
| Seller's remedy on buyer's default | Can sue for the price | Can generally only sue for damages |
| Buyer's position if seller resells | Can recover the goods or sue for conversion, being the owner | Can generally only sue the seller for damages |
| Seller's insolvency (before delivery) | Buyer can claim the goods, as owner | Buyer can only claim a rateable dividend, not the goods |
| Buyer's insolvency (before payment) | Seller must deliver and prove for the price with other creditors | Seller can refuse to deliver unless paid in full |
An agreement to sell converts into a sale automatically the moment the specified time lapses or the condition is fulfilled — no fresh contract is needed.
✓Final answer
A sale transfers ownership immediately (an executed contract); an agreement to sell postpones the transfer of ownership to a future time or a condition (an executory contract), becoming a sale automatically once that time/condition arrives.
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