News By/Courtesy: Priyanka Patnaik | 22 May 2020 11:10am IST

HIGHLIGHTS

  • Contract of sale
  • There are some basic essentials of sale
  • Comparison of bailment and sale

Contract of sale 
A contract of sale is a straight forward contract where a person may buy goods, services, or property from a seller in exchange for remuneration, usually in the form of money. It is defined under section 4 of  The Sale Of Goods Act, 1930.
Sales - A contract of sale is an agreement between a seller and a buyer. The seller agrees to deliver or sell something to a buyer for a set price that the buyer has agreed to pay. With these contracts, the transfer of ownership happens when the buyer pays and the seller delivers.
There are some essentials of sale
Two parties – For sale there must be 2 distinct parties i.e. a buyer and a seller, to affect a contract of sale and they must be competent to contract. ‘Buyer’ means a person who buys or agrees to buy goods. ‘Seller’ means a person who sells or agrees to sell goods.
Goods:  For Sale, there must be some goods that are or is to be transferred from the seller to the buyer. The goods which form the subject-matter of the contract of sale must be movable. Goods also must not  be immovable as immovable goods are not regulated by the sales of goods act
Price: For sale, Price is also one of the essential ingredients as in the absence of the price or the consideration, the transfer is not regarded as a sale. The transfer by way of sale must be in exchange for a price. It has been held that price normally means money.
Transfer of general property: only transfer of general property cover under sales act and no special property come under this. E.g., if A owns certain goods he has general property in the goods. If he pledges them with B, B has a special property in the goods.
Ownership – for sale there must be a transfer of ownership and not only the transfer of goods. Hence in sales buyer becomes the owner of goods.
Essential elements of a valid contract: All essential elements of a valid contract must be present in the contract of sale.
Comparison of bailment and sale 
Though most of the essentials of sales like two parties, transfer of goods are present in the bailment then also bailment is not alike to sales and have significant differences 
In bailment the bailor gives the goods, assets or property to the bailee for a specific amount of time and the goods, assets or property still belongs to the bailor but in sale seller not only transfer the goods but it also transfers its ownership hence after-sale seller lose claim over the transferred property. The price of the goods is also one of the significant differences between sale and bailment. In bailment bailee generally pays a nominal amount of good as in bailment they only hire the goods for few days and cannot claim ownership over it while in sales buyer has to pay the full price of the goods as in sales there is the transfer of ownership. In the sale, consideration is always in terms of money while in bailment it is not necessary also there is no freedom of use of goods as bailee is not the owner of goods while in sale buyer has ownership over goods so he has freedom of its use. We can better understand it with an example
X is an owner of a cycle and if he delivers it to the cycle repairer for it’s repairing then this is called as bailment as x being bailor of the cycle only deliver it to the bailee i.e cycle repairer for it’s repairing and does not transfer the ownership of cycle while if x instead of giving the cycle for repairing sell it to the cycle repairer then it will be said as sale as there is the transfer of ownership.

Section Editor: Pushpit Singh | 22 May 2020 20:06pm IST


Tags : #bailmentsandsale

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