Sale and agreement to sell are two terms that are often used interchangeably but have different meanings in the legal sense. Understanding the difference between the two is vital, especially when it comes to drafting contracts and agreements.
A sale is a transaction where the ownership of goods is transferred from the seller to the buyer for a price. In a sale, the goods are delivered to the buyer, and the buyer becomes the owner of the goods. The sale is complete once the goods are delivered to the buyer, and payment is made.
For example, Mr. Patel sold his car to Mr. Sanghvi for $10,000. Mr. Patel delivered the car to Mr. Sanghvi and received the payment. The sale was complete, and Mr. Sanghvi became the owner of the car.
Agreement to Sell
An agreement to sell is a contract where the seller agrees to sell the goods to the buyer on a future date or on the occurrence of a specific event, subject to the condition that the buyer will pay the agreed price for the goods. In an agreement to sell, the ownership of the goods remains with the seller until the payment is made.
For example, Mr. Sharma entered into an agreement to sell his house to Mr. Gupta for $500,000, subject to the condition that Mr. Gupta will pay the amount within six months. In this case, the ownership of the house remains with Mr. Sharma until Mr. Gupta pays the amount. Once the payment is made, Mr. Sharma will deliver the house to Mr. Gupta, and the sale will be complete.
The key difference between a sale and an agreement to sell is that in a sale, the ownership of the goods is transferred, while in an agreement to sell, the ownership remains with the seller until the payment is made. In a sale, the transaction is complete once the goods are delivered, and payment is made. In an agreement to sell, the transaction is not complete until the payment is made, and the goods are delivered.
Another difference is that the seller can sue the buyer for breach of contract in an agreement to sell, while in a sale, the buyer can sue the seller for breach of warranty.
In conclusion, while sale and agreement to sell may sound similar, they have different legal meanings. Understanding these differences is important, especially when it comes to drafting contracts and agreements. A professional can help ensure that these differences are accurately and clearly communicated in any published content related to these terms.