Introduction

Sale- Where under a contract of sale the property in the goods is immediately transferred at the time of making the contract from the seller to the buyer, the contract is called a sale.

Agreement to sell - Where under a contract of sale the 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 ' agreement to sell'.

Distinction

Transfer of property - In a sale the property in goods passes to the buyer immediately at the time of making the contract. It creates a jus in rem.

In agreement to sell, there is no transfer of property to the buyer at the time of the contract. The conveyance of property takes place later so that the seller continues to be the owner until the agreement to sell become a sale either by expiry of a certain period or fulfillment of some condition.

Risk of loss- The general rule is that unless otherwise agreed, the risk of loss passes with property. 

In case of sale, if the goods are destroyed the loss falls on the buyer even though the goods may never come into his possession because the property in the goods has already passed to the buyer.

In case of agreement to sale, where the ownership in the goods is yet to pass from the seller to the buyer, such loss has to be borne by the seller even though the goods are in the possession of the buyer.

Consequences of breach- In case of sale, if the buyer wrongfully neglects or refuses to pay the price of the goods, the seller can sue for the price even though the goods are still in his possession.

In case of agreement to sell, if the buyer breaks his promise, seller can only sue for damages and not for the price, even though the goods are in the possession of buyer.

Right to resale- In case of sale, property is with the buyer and as such the seller cannot resell the goods. If he does so, subsequent buyer having knowledge of the previous sale does not acquire a title to the goods. 

In case of agreement to sell, the property in the goods remains with the seller and he can dispose the goods as he likes and the original buyer can sue him only for breach of contract. Subsequent buyer gets a good title to the goods, irrespective of the knowledge of previous sale.

Insolvensy of buyer before he pays for the goods- In case of sale, if the buyer is adjudged insolvent before he pays for the goods, in absence of right of lien, the seller must deliver the goods to the Official Receiver or Assignee.

In agreement to sell, seller may refuse to deliver the goods to Official Receiver or Assignee unless paid for,as ownership has not passed to the buyer.