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Transfer of Property
Transfer of Property
Discuss
the essential features which govern the formation of two. (1998)
1. Introduction:
If goods are transferred under contract it is called sale. If transfer of property in goods is
to take place at a future time the contract is called an agreement to sell.
2. Contract of sale:
According to Sec 4 of sales of goods act.
A contract where by the seller transfer or agrees to transfer the property or
the goods to the buyer for a price.
Case law
1996 CLC 1758
It was held that agreement to sell does not create any right, title or interest in
immovable property in question.
3. Form of contract of sale
(i) Written
(ii) Oral
(iii) Implied i. e. from the conduct of the parties.
Case law
PLD 1973 Lac. 387
It was held that a contract of sale may be made in writing or by word of mouth, or partly
in writing and partly by word of mouth or may be implied from conduct of the parties.
4. Essential features of sale:
Following are essential of sale.
(I) Bilateral contract:
There must be two parties the buyer and seller. The seller and buyer must be different
persons.
(II) Price:
Consideration for a sale of goods must be money called price. If goods are exchanged
with goods it is not sale.
(III) Goods:
The subject matter of sale must be goods meaning.
(a) Every kind of moveable property other than actionable claims and money and
includes stock and shares, growing crops, grass and attached to or forming part of the
land which are agreed to be served before sale or under a contract of sale.
(b) Things attaching to earth can be subject matter of sale provided they are served
from earth under the contract.
(IV) Transfer of ownership:
There must be agreement or agree to transfer the property to the buyer.
(V) Sale and agreement to sell:
The term contract of sale includes, both sale and agreement to sell.
(VI) Essentials of a valid contract:
Contract of sale must have all the essential of a valid contract.
5. Distinction between sale and agreement to sell:
Following are the main points of distinction.
(I) Transfer of property:
In contract of sale property is transferred from sellor to buyer.
In an agreement to sell only promise is to made to transfer the property.
(II) Risk:
In contract of sale risk is transferred by buyer.
In an agreement to sell risk remains with the owner.
(III) Types of goods:
In contract of sale there can be only existing and specific goods.
An agreement to sell is relate to future and contingent goods.
(IV) Consequences of breach:
If buyer commits default the seller may sue him for the price in contract of sale.
In an agreement to sell, the buyer can only sue for the damages.
(V) Nature of contract:
Contract of sale is an executed contract.
An agreement to sell is an executor contract.
(VI) Right of resale:
In contract of sale, seller cannot resell except in certain cases.
In an agreement to sell, the seller can resale to the new buyer.
(VII) Nature of performance:
A contract of sale is a contract which is being performed.
An agreement to sell is a contract which is to be performed.
(VIII) Insolvency of buyer:
In contract of sale, if buyer becomes insolvent seller can use his right of line or
stoppage.
In an agreement to sell, seller can refuse to deliver the goods.
(IX) Insolvency of seller:
In a contract of sale buyer is entitled to recover the goods from official receiver. So he
has no risk.
In an agreement to sell a buyer can only claim dividend.
6. Conclusion:
To conclusion it can be said that, a contract of sale and agreement to sell are
different terms. Contracts of sale includes both the sale and an agreement to
sell. Like any other contract it is formed by an offer and acceptance by the
persons of the contract. An agreement to sell becomes sale when that
something which prevented the property from passing from the seller to the
buyer is done or fulfilled, resulting in the passing of the property in the goods
sold from the seller to the buyer.
(a) Specific goods. Goods identified and agreed upon at the time of the
making of the contract of sale are called specific goods [Sec. 2(14)]. It
may be noted that in actual practice the term ascertained goods is used
in the same sense as specific goods, For example, where A agrees to sell
to B a particular radio bearing a distinctive number, there is a contract of
sale of specific or ascertained goods.
(b)Unascertained goods. The goods, which are not separatelyidentified or
ascertained at the time of the making of the contract, are known as
unascertained goods. They are indicated or defined only by description. For
example, if A agrees to sell to B one bag of sugar out of the lot of
one hundred bags lying in his godown; it is a sale of unascertained goods
because it is not known which bag is to be delivered. As soon as a particular
bag is separated from the lot for delivery, it becomes ascertained or
specific goods.
http://chestofbooks.com/business/law/Handbook-Of-The-Law-Of-Sale-Of-
Goods/15-Destruction-Or-Deterioration-Of-The-Goods.html#.UWGuGZNvAg8
http://chestofbooks.com/business/law/Law-Of-Contracts-3/Sec-1562-Partial-
Destruction-Of-The-Goods-Prior-To-The-Sale-The-English-
Sale.html#.UWGuGpNvAg8