(1) Two Parties

( ) Two Parties A contract of sale involves two parties – the seller and the buyer. The buyer and the seller should be two different persons. If a person buys his own goods, there is no sale. On the dissolution of partnership when the surplus assets including goods were distributed among the partners, the court held that it was not a sale attracting sales tax. The partners were themselves joint owners of the goods and they could not be both sellers and buyers. However, there is one exception. When the goods of a person are sold in Sl. No. Particulars Sale Agreement to Sell . Ownership Transference The property (ownership or title) in the goods passes from the seller to the buyer immediately so that the seller is no more owner. The property (ownership or title) in the goods has to pass at a future time or after the fulfilment of certain conditions specified in the contract. 12th Commerce Unit - - . . AM . Risk of Loss Where the goods sold under the contract of sale are destroyed, the loss falls squarely on the buyer as the ownership in the goods has already passed on to the latter. Even though the goods are in the possession of seller. Where the goods under the agreement to sell are destroyed, the loss falls squarely on the seller as the ownership is still vested with the seller even though the possession of the goods is with the buyer. . Consequences of violating the contract Where the buyer fails to pay the price, the seller cannot seize the goods. The seller can only file a case against the buyer for violating the contract. Where the buyer violates the contract, the seller can repossess the goods from the former. He can sue for damages for violation of the contract. . Nature of contract It is an executed contract i.e. completed contract It is an executory contract, i.e. contract yet to be performed by the party to the contract. . Insolvency of the Buyer In a sale, if a buyer becomes insolvent before