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CMA Intermediate · Business Laws and Ethics · Sale of Goods Act, 1930

Under the Sale of Goods Act, 1930, which description of an agreement to sell is correct?

An agreement to sell is a contract where the transfer of property in the goods is to take place at a future time or subject to a condition still to be fulfilled. It becomes a sale when the time elapses or the condition is fulfilled.

  1. AThe property in the goods passes to the buyer at once
  2. BIt is a contract where transfer of property is to take place at a future time or subject to a condition to be fulfilledCorrect
  3. CIt cannot become a sale
  4. DIt exists only between a seller and a part-owner

Explanation

Section 4(3) says that where transfer of property is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is an agreement to sell. Section 4(4) adds that it becomes a sale when the time elapses or the conditions are fulfilled.

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