CONTRACT OF SALE OF GOODS.

Section 4(1) of the Sale of Goods Act 1930 defines a contract of sale of goods as:
"A contract whereby seller transfers or agrees to transfer property in the goods to the buyer for a price."
A contract of sale includes both, a sale and an agreement to sell.
SALE
"Where under a contract of sale property in the goods is transferred from the seller to the buyer, the
contract is called a sale."
AGREEMENT TO SELL.
Section 4(3) defines an agreement to sell as: "Where transfer of property in the goods is to take place at a
future time or subject to some condition thereafter to be fulfilled, the contract is called an agreement to
sell."

ESSENTIALS OF A CONTRACT OF SALE OF GOODS.

Following are the essentials of a contract of sale of goods:

1. Seller.
One of the parties to a contract of sale is seller. Seller means a person who sells or agrees to sell
goods {Section 2(14)}.
2. Buyer.
The other party to a contract of sale is buyer. Buyer means a person who buys or agrees to buy
goods {Section 2(1)}.
3. Transfer of Property.
In order to constitute a contract of sale, the seller must transfer or agrees to transfer property in the
goods to the buyer. Where only possession of goods is being transferred, it is not a contract of sale.
4. Goods.
Subject matter of a contract of sale must be goods. According to 21 goods means: Every kind of
movable property, other than actionable claims and money, and includes electricity, water. gas,
stocks and shares, growing crops, grass and things attached to or forming part of land which are
agreed to be severed before sale.
5. Price.
Price means money consideration for a sale of goods (Section 2(10)}. Consideration in a contract of
sale must be money Where goods are being exchanged for goods, the transaction is not a sale
within the meaning of the Sales of Goods Act 1930. However, where the goods are being exchanged
partly for goods and partly for money, the transaction is a sale.
6. Other Formalities.
In order to be valid, a contract of sale must also possess all essential elements of a valid contract
e.g. free consent, competent parties, lawful consideration, lawful object, etc.

DIFFERENCE BETWEEN SALE AND AGREEMENT TO SELL.

SALE AGREEMENT TO SELL

1. Transfer of Property.
In a sale property in the goods is
transferred from seller to buyer at the time
when the contract is made.
2. Risk of Loss.
Risk of loss of goods passes to buyer with
property in the goods. In case of a sale
property in the good is transferred to
buyer, therefore, if the goods are
destroyed, buyer bears the loss.
3. Breach of Contract by Buyer.
As property in the goods is transferred to
In an agreement to sell transfer of property
takes place at a future time after the
contract is made.
In case of an agreement to sell because
property in the goods is still with seller, because
therefore, seller bears risk of loss. If the
goods are lost, the loss shall be borne by
Seller.
As property in the goods is still with seller,
 buyer, therefore, if buyer commits default
i.e. he fails to pay the price, seller can sue
him for the price and for damages.
4. Breach of Contract by Seller.
If seller refuses to deliver the goods, buyer,
being owner of the goods, can sue him for
recovery of the goods and for damages.
5. Right of Resale.
In case of sale, because ownership of the
goods has passed to buyer, therefore, seller
cannot resell the goods.
6. Insolvency of Seller.
If a seller, who is in possession of goods
after sale, becomes insolvent, buyer can
recover the goods from official receiver of
the seller because ownership of the goods
has passed to the buyer.
7. Nature of Contract .
Sale is an executed contract.
8. Type of Goods.
Subject matter of a sale is specific goods.
goods or future goods or contingent goods.
therefore, if buyer commits default ie, he
fails to pay the price at stipulated time
seller can sue him only for recovery of damages
and not to recover the price.
If seller refuses to deliver the goods, buyer
can sue him only to recover damages for
breach of the contract. Buyer cannot recover the
goods because seller is owner of the goods.
In case of an agreement to sell, as
ownership of the goods is still with seller
therefore, he can resell the goods.
If a seller, who is in possession of goods after
an agreement to sell, becomes
insolvent, buyer cannot recover the goods
from official receiver of the seller, because
ownership of the goods is with the seller.
Agreement to sell is an executory contract.
Subject matter of an agreement to sell may be
specific goods, or it may be unascertained