Contract of Sale
Introduction to a Contract of Sale of Goods
A contract of sales of goods is a contract where a seller transfers or agrees to transfer the property in return for money which is called the price.
John (seller) agrees to transfer to Mark (buyer) a mobile phone for £500 and Mark agrees and gives John the money in exchange for the mobile phone. The whole process can be described as a contract of sale of goods.
Types of Contract of Sale of Goods
There are many different types of contracts for sales of goods or services. A contract can be absolute or conditional.
- The absolute contract is where there is a direct connotation between the property being sold and for a specific monetary value.
John (seller) agrees to transfer to Mark (buyer) a mobile phone for £500 and Mark agrees and gives John the money in exchange for the mobile phone. The whole process can be described as a contract of sale of goods. This is also an absolute contract as the property (Mobile phone) has exchanged the ownership for a price of £500.
- A conditional contract is also known as an agreement to sell.
- A conditional contract arises where under the contract of sale, the transfer of the property has to take place at a future time or where the transfer of the property is subject to some condition/s which has to be fulfilled first.
- An agreement to sell will become a contract for the sale of goods upon the elapse of the time or if where the conditions attached for delivery of the goods or services have been fulfilled.
Farid agrees to sell his car to Muhammed after the 30th of next month. Until that date has not arrived it is only an agreement to sell and it does not constitute a contract for a sale until after the date specified has elapsed
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