Sale of Goods Act Section 4 — Sale and agreement to sell

CHAPTER II FORMATION OF THE CONTRACT — Contract of sale

Commercial / Corporate

Summary

Sub-section (1) defines a contract of sale of goods as an agreement where the seller transfers, or agrees to transfer, ownership of the goods to the buyer for a price. It also states that such a contract can be made between one part-owner and another part-owner of the goods.

Sub-section (2) says that a contract of sale can be either absolute or conditional. An absolute contract has no conditions attached, while a conditional contract depends on certain conditions being met.

Sub-section (3) distinguishes between a sale and an agreement to sell. If ownership of the goods is transferred from the seller to the buyer immediately under the contract, it is called a sale. If ownership is to be transferred at a future time, or only after some condition is fulfilled, the contract is called an agreement to sell.

Sub-section (4) explains that an agreement to sell becomes a sale once the specified time has passed, or once the conditions on which ownership was to be transferred have been fulfilled.

Official Text

(1) A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. There may be a contract of sale between one part-owner and another.

(2) A contract of sale may be absolute or conditional.

(3) Where under a contract of sale the property in the goods is transferred from the seller to the buyer, the contract is called a sale, but where the transfer of the 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.

(4) An agreement to, sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred.