When it comes to business transactions, sales and agreements to sell are two terms that are often used interchangeably, but they actually have different meanings. In this article, we’ll explore the difference between sale and agreement to sell, including their definitions, features, and examples.
Definition:
Sale: A sale is a transfer of ownership of goods or assets from the seller to the buyer in exchange for payment. It is a completed transaction, meaning that the ownership of the goods or assets has already been transferred to the buyer.
Agreement to sell: An agreement to sell is a contract between the seller and the buyer whereby the seller agrees to transfer ownership of goods or assets to the buyer at a future date, subject to certain conditions. It is an incomplete transaction, meaning that the ownership of the goods or assets has not yet been transferred to the buyer.
Features:
Sale Agreement to sell
Transfer of ownership Completed transaction Incomplete transaction
Risk and reward Passed to buyer at the time of sale Passed to buyer at the time of delivery
Title Passed to buyer at the time of sale Passed to buyer at the time of delivery
Liability Seller is not liable for any damages after the sale Seller may be liable for any damages before the delivery
Examples:
Sale: A person buying a car from a dealership is an example of a sale. The buyer pays the agreed price and takes ownership of the car, and the dealer is no longer responsible for any damages or problems with the car after the sale.
Agreement to sell: A person ordering a customized suit from a tailor is an example of an agreement to sell. The buyer agrees to purchase the suit at a future date when it is ready, and the tailor is responsible for delivering the suit as per the agreed specifications.
Conclusion:
In summary, the difference between sale and agreement to sell is that a sale is a completed transaction where ownership of the goods or assets has already been transferred to the buyer, whereas an agreement to sell is an incomplete transaction where ownership is yet to be transferred. It is important for businesses to understand the distinction between the two terms to avoid any confusion or disputes with their customers.