Difference between Sale and Agreement to Sale

Agreement sale constitutes the terms and conditions of sale of a property by the seller to the buyer. These terms and conditions include the amount at which it is to be sold and the future date of full payment.

 Distinction between Sale and Agreement Sale

BASIS

SALE

AGREEMENT TO SELL

 Nature

Sale is an executed contract.  Agreement sell is an executory contract.

Performance

Performance of sale is absolute and without any condition. Performance is conditional and is made in future.

Transfer of Property

The property of the goods passes from the seller to the buyer immediately and the seller is no longer the owner of the goods sold.  The transfer of property takes place on a future date, or at time subject to fulfillment of certain conditions.

Consequences of Breach

 If there is a breach of contract, the seller can sue for the price,even if the goods are in his possession. If the buyer falls to accept the goods, the seller can only sue for damage and not the price, even through the goods are in the possession of the seller.

 Right to Resale

As the property is with the buyer, the seller cannot resell the goods. The property remains with the seller and he can dispose of the goods as he likes.

Definition

Sale can be defined as “transfer of ownership in the goods by the seller to buyer in exchange of price paid or promised or partly paid and partly promised.  In case where the seller agrees with the buyer to transfer the title of ownership on a future date upon satisfying certain condition is called as ‘Agreement to Sale’.

Transfer of risk

Yes. No.

Title

In sale, the title of goods transfers to the buyer with the transfer of goods. In an agreement sale, the title of goods remains with the seller as there is no transfer of goods.

Tax

Tax is charged at the time of sale. No tax is levied.