When it comes to the sale of goods, there are several legal concepts that must be understood in order to ensure a smooth and legally compliant transaction. One of these concepts is the transfer of property in goods, which refers to the moment when ownership of the goods passes from the seller to the buyer.
According to the Sale of Goods Act 1979, the transfer of property in goods can take place in one of two ways: by agreement or by operation of law. In this article, we will focus on the former – specifically, what it means for the transfer of property in goods to take place “in agreement to sell”.
Firstly, let`s clarify some definitions. An agreement to sell is a contract between the seller and buyer where the seller agrees to transfer the ownership of goods to the buyer in exchange for a price. This is different from a sale, which is the actual transfer of ownership.
So, what does it mean for the transfer of property in goods to take place “in agreement to sell”? Essentially, it means that the ownership of the goods will pass from the seller to the buyer at the time specified in the contract of sale. This may be at the time of delivery, or at a later date if specified in the contract.
It`s important to note that in an agreement to sell, the goods may not yet be in the possession of the seller. For example, if a customer orders a product that the seller needs to order in from a supplier, the ownership will not transfer until the seller takes delivery of the goods from the supplier and is able to transfer them to the buyer.
There are some exceptions to the rule that the transfer of property in goods takes place in agreement to sell. For example, if the contract specifies that payment must be made before the goods are delivered, ownership may pass at the time of payment rather than delivery.
Overall, understanding the concept of transfer of property in goods is crucial for anyone involved in the sale of goods. When the transfer takes place “in agreement to sell”, it means that ownership will pass at the time specified in the contract – whether that be at the time of delivery or at a later date. By ensuring that these terms are clearly established in the contract of sale, both the seller and buyer can avoid any disputes or legal issues that may arise.