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Agreement to Sell

An ‘agreement to sell’ is defined in Section 4(3) of the Sale of Goods Act as “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 an agreement to sell.” In this case, the ownership of goods is not immediately transferred from a seller to a buyer but it is agreed upon to transfer it on a future date.



On 1st March, Sagar agrees with Suraj that he will sell his car for ₹ 50,000 on March 10th. It is an agreement to sell, since Sagar agrees to transfer the ownership of the car to Suraj at a future date.



A buys some furniture from B and agrees to pay for the same in two monthly installments. Here, the ownership of the furniture will pass to A only on the payment of the second installment by A. so it is an agreement to sell.



A agreed to buy B’s car and pay for it, if his mechanic approves it. It is an agreement to sell.


Note: When under an agreement to sell, the transfer of property in goods takes placein future or subject to some condition, thereafter to be fulfilled. Therefore an agreement to sale becomes sale, when the time expires or the condition, subject to which the property in goods is to be transferred, is fulfilled.

Sec 4(4) An agreement to sell turns into an contract of sale when the ownership of goods is transferred to the buyer. Thus the ownership is transferred and turns an agreement to sell into sale when-
  • The agreement to sell provides that the ownership of goods will be transferred at some future date; it becomes sale when that date arrives.
  • The ownership of the goods is transferred on the fulfillment of some condition, when those conditions are fulfilled.

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