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Property Law

By
Prof. Dr. K.S.N. SARMA
B. Sc, M.A, LL.D

Visiting Faculty of Law

Icfai Foundation for Higher


Education.
Study Material for MBA Students
Subject: Legal Environment of Business

January, 2015.

Enactments Covering Property


Matters
The Transfer of Property Act, 1882
Sale of Goods Act, 1930
Negotiable Instruments Act, 1881
Indian Trusts Act, 1882
Indian Easements Act, 1882
Indian Succession Act, 1925
Hindu Succession Act, 1956
Companies Act 2013, and
Statutes covering - Intellectual Property
Rights.
2

What Constitutes Property?


1. Corpus + Animus = Property
2. Possession + Ownership =
Property
3. A person who has
Possession + Enjoyment + Right to
dispose of a thing as one likes is
- the Owner of that thing or
Property.
4. Possession is 9 out of 10 parts

Ownership is said to exist over a


determinate thing
When it is
- Indefinite in point of user;
- Unrestricted in point of
disposition;
and - Unlimited in point of
duration.
4

The term property is used in common


parlance to signify - the thing over
which the right of ownership is exercised.
The right is available against the
whole world (jus in rem);
The Property over which right in rem
is available is the General Property

Extension of Right to
Immovable Property
Below - to the centre of the earth
Above - up to the sky
[Subject, however, to
- certain rules, regulations and restrictions
- imposed by the state
in view of public utility and public interest
as well as to facilitate International air-traffic ]

Ideologies in support of
property and ownership

Capitalism is
- in support of private
ownership.
Communism is
- in support of state ownership.
7

Ideologies opposed to
property as an institution
Some forms of Anarchism are
- opposed to property as an
institution.
Consider - Property is Theft

Classification of Property
Property is classified into
different categories.
They are:
- General and Special Property
- Moveable and Immovable
Property
- Tangible and Intangible
Property
- Corporeal and Incorporeal
Property

The Property over which right in rem


is available is the General Property
Property over which some interest is
vested but not right in rem is - the
Special Property.
A right in rem confers upon the
owner
1. a right to enjoy that property
exclusive of all others in the
society; and
2. a right to take legal action if

10

Most legal systems distinguish between


different types of property - especially
between land and all other forms of
property.
In common law, property is divided into:
Real property
- interests in
land
Personal property - interests in
anything
other than land.
11

In the Legal Sense


Property means:
Assets of every kind, whether
- corporeal or incorporeal,
- movable or immovable,
- tangible or
intangible,
- real or
personal - and
legal documents or instruments
- evidencing title to or interests in
such assets.
12

Property rights are usually thought


of in terms of - a bundle of rights over
- a determinate thing or
subject.
Traditionally, they are:
- right to control over use
- right to benefits of property
(e.g. mining royalties, farm royalties)

and - right to transfer or to sell.


13

Tangible Property which is perceived by


senses
Intangible Property which is conceived in
mind
Corporeal Property which has a physical
shape
and structure; a body
of its own
Incorporeal Property which does not
posses
physical shape or
14
structure

Movable Vs. Immovable


Property
Movable Property can
- pass hands easily

- transfer hand quickly


- be taken to anywhere
effort or

without much - pain or


- hardship

- perish or lose value or


- destroy early i.e. of lesser
- longevity of life or
- utility value.
15

Immovable Property
Defined.
Immovable Property
does not include
- Standing Timber
- Growing Crops
- Grass

[Sec 3

T.P. Act]

This definition is - neither exhaustive


- nor comprehensive
- a negative definition.
So, we have to look for elsewhere for the 16

Indian Registration Act


Defines Immovable Property as including
- Land
- Building
- Ferries
- Fisheries
- Hereditary allowances
- Rights to ways, Light and Air
- any other benefit to arise out of land
and - things attached to the earth
or - permanently fastened to anything
- which is attached to earth;
but does not include - Standing timber
- Growing Crops
- Grass
17

The General Clauses Act

Includes under the head


Immovable property
- Land
- benefits to arise out of
land
and - things attached to the
earth
or - permanently fastened
to
anything attached to
earth.

18

Transfer of Property

Transfer of movable property often involves transfer of


goods, i.e. mercantile goods and which is governed by
the Sale of Goods Act, 1930.
Transfer of immovable property is carried out through
the provisions of the Transfer of Property Act, 1882.
There are also some other enactments which deal with
transfer of 1. special type of properties or
transfer 2. under special conditions
For example:
transfer of shares - by
Company Law
transfer of money by Negotiable Instruments Act transfer of property
after death - by Succession Act
either testamentary will or intestate
succession.
19

Transfer of property defined


Transfer of Property" means an act by which
a living person conveys property,
in present or in future
to one or more other living persons, or
to himself and one or more other living persons;
and
to transfer property is - to perform such act.
The transfer is always inter vivos
[Sec5]

Inter vivos means between living persons only.


A power of attorney can transfer the property to
himself. In such an event, he acts both as transferor
and transferee.
20

Section - 5 Contd.

In this section "living person


includes
- a company or
- an association or
- body of individuals,
whether incorporated - or not,
but nothing herein contained shall
affect
- any law for the time being in
force
and - relating to
transfer of property
to or by - companies,
21

What may be transferred


Property of any kind may be transferred,

- except as otherwise provided by this Act or


by any other law for the time being in force.
Section - 6 of the Transfer of Property Act

enlists the kind of properties that cannot be


transferred.
For Example:
- The chance of an heir-apparent succeeding to an
estate,
- the chance of a relation obtaining a legacy on the death
of a kinsman, or
- any other mere possibility of a like nature

cannot be transferred.

Some more examples of


- Properties that cannot be transferred

[Sec-6]

An easement cannot be transferred apart from


the dominant heritage.
A mere right to sue cannot be transferred.
A public office cannot be transferred, nor can
the salary of a public officer, whether
before
or after it has become payable.
Stipends allowed to military, naval, air-force
and civil pensioners of the government
and
political pensions cannot be transferred.

Section 6 (h)
No transfer can be made
(1) insofar as it is opposed to the nature of
the interest affected thereby, or
(2) for an unlawful object or consideration
within the meaning of Section 23 of the
Indian Contract Act, 1872, or
(3) to a person legally disqualified to be
transferee.

Persons competent to transfer

[Sec-7]

Every person
- competent to contract and
- entitled to transferable property,
or - authorised to dispose of
transferable
property not his own,
is competent to transfer such property
- either wholly or in part, and
- either absolutely or conditionally,
- in the circumstances, to the extent and
- in the manner, allowed and prescribed
by any law for the time being in
force.

Oral transfer

[Sec 9]

A transfer of property may be


made without writing
`- in every case in which a
writing is
not expressly
required by law.

26

Operation of transfer

[Sec 8]

Unless a different intention is


- expressed or
- necessarily implied,
a transfer of property passes
forthwith
- to the
transferee.
What passes forthwith?
All the interest which the transferor is
then capable of passing
- in the property and
- in the legal incidents thereof.
27

When the property is land


Such incidents include,
- the easements annexed
thereto,
- the rents and profits thereof
accruing
after the transfer, and
- all things attached to the
earth;
28

Where the property is Machinery


attached to the earth
- the movable parts thereof;

Where the property is a house ,


- the easements annexed thereto,
- the rent thereof accruing after the
transfer, and
- the locks, keys, bars, doors, windows,
and
- all other things provided for permanent
use therewith;
29

Where the property is a debt


or other actionable claim,
- the securities there (except where
such securities
are also for other debts or claims - not
transferred to
the transferee) but not arrears of

interest
- accrued before the transfer;

Where the property is money


or other property yielding
income,

30

Transfer of Immovable
Property

Under T.P Act:


Incidents of Transfer may occur by way of
1. Sale

Sec - 54
2. Mortgage

Sec - 58
3. Charge

Sec - 100
4. Lease/Rent

Sec - 105
5. Exchange

Sec - 118
6. Gift

Sec 122
7. Licence
[Sec-52 of
Easements Act]
31

SALE

[Sec 54]

Transfer of ownership in exchange for a


price.
Price - Paid or
- promised to be paid
Or - Part paid or
- Part promised to be paid.

In sale - the general interest in the property is


transferred.

Price implies Money only


32

How Sale is Made ?


In case of - tangible immovable
property:
1. of valuing Rs.100/- and
upwards can be made
- only by a registered instrument.
2. of value less than Rs. 100/- can
be made
either by Regd. Instrument
or by delivery of property.
33

Mortgage Sec 58
Transfer of interest in specific
immovable property
1 - for the purpose of
- securing the
payment of money
- advanced or
- to be advanced - by way of
loan
or - an existing or
- future - debt
34

Transfer of interest in specific


immovable property
2 - for the purpose of
- securing the performance of an
engagement, which
gives rise to a
- pecuniary or
- monitory or
- financial - liability.
The transferor is called as the
Mortgagor
The transferee is called as the

35

The mortgagor transfers the interest in specific


immovable property towards the security of payment
of the loan.
The loan may be a - past or present or future loan.
The loan so advanced and the interest accruing upon
it together called - Mortgage Debt.
The instrument of transfer is called - Mortgage
Deed.
The interest in immovable property transferred through
mortgage deed is called - Mortgage Property.

The Mortgager has a right


- to get back his property and interest therein
- after clearance/payment of the mortgage
debt due.
This right of mortgager is called
- the right of redemption.
as against
The right of mortgagee called
of foreclosure & sale.

- the right
[Sec -

60 & 67.]

Let us try to know more about the meaning of


these two Legal Principles at this stage.

RIGHT OF REDEMPTION

1. To redeem the mortgaged property is a legal


right of
the Mortgagor.
The mortgagor buys back, or re-purchases or
gets his
property restored.
A mortgagor has a legal right to redeem his
property after payment of the mortgage debt.
2. A mortgagee is bound to recognize the
mortgagors
right of redemption.
The mortgagee is bound to give back to the
mortgagor
after receiving back the debt amount

3. Whether the parties agree or not,


- the right of redemption is
always
available to the mortgagor.
4. This right of redemption is a
statutory
right - independent of any
agreement.
5. If any right is granted by the law
independent of agreement, such
right
has a greater value.

6. According to T.P. Act, and Sec-28 of the


Contract
Act:
- Any agreement against the right of
redemption is
void.
- The mortgagors right of redemption can not be
refused or denied on the basis of any such void
agreement.
- Any clog or impediment on the right of
redemption
is void.

7. The right of redemption is a


natural
consequence and legal effect
of a
valid mortgage.
- Where there is a
mortgage,
there is right of
redemption.
41

9. In English Jurisprudence,
- the right of redemption
is
a right of equity
Whereas in India it is
- a legal and statutory
right,
though it was originally

RIGHT OF FORECLOSURE
1. As the Mortgagor has the right to redeem
the mortgaged property, the Mortgagee
has got a right of foreclosure.
2. Foreclosure means to bring an end to the
transaction of mortgage.
3. The right of foreclosure is given to the
mortgagee
as a remedy, in case he is kept unpaid by the
mortgagor.
4. If the mortgagee is
- left unpaid and
- the time promised for payment is over,
- the mortgagee may go to the court and
request
for foreclosure.

5. However, the Court before passing


an order of
foreclosure, gives an opportunity to
the mortgagor
for the repayment of the mortgage
debt.
6. At this moment:

the

if the mortgagor makes payment,


property is given back to him;

7. The mortgagee becomes owner


of the
mortgaged property - after
foreclosure of the
mortgage.
8. The order of foreclosure can be
passed by a
competent Court only.
9. When the Court grants an order
of
foreclosure in favour of the
mortgagee:

Distinction between these two rights:


(i) The right of redemption is a primary right
but a right of foreclosure is secondary right.
If the mortgagor is ready to pay, then
redemption will be ordered by the court.
- It
means Right of Redemption prevails
over the Right of Foreclosure.
(ii)

(iii) If the time agreed to pay has gone, even


then the right of redemption continues
- unless the foreclosure is ordered.

(iv) The mortgagor may exercise his right


of redemption at any time during the
continuance of the mortgage;
but the mortgagee may avail his right
of foreclosure only when
(a) the mortgagor has failed to pay
and
(v)

(b) the time agreed has elapsed.

If the mortgagee wants, he can waive his


right of receiving the payment of
mortgage
debt. But, if mortgagor waives his right of
redemption such waiving is not legal.

Different types of Mortgages


1.
2.
3.
4.
5.
6.

Simple mortgage
Mortgage by conditional sale
Usufructuary mortgage
Equitable mortgage
English mortgage
Anomalous mortgage.
48

1. SIMPLE MORTGAGE.

The elements to make a mortgage


simple are:

1. The mortgagor did not transfer the


possession of the property to the
mortgagee.
2. The mortgagee advances the
mortgage debt to the mortgagor.
3. The mortgagor accepts the personal
obligations by a promise to pay the
mortgage debt.
49
4. The mortgagor undertakes to pay and

SIMPLE MORTGAGE

5. If the mortgagor makes the payment,


- he gets the property
redeemed.
6. If mortgagor fails to pay, the mortgagee
has a right to go to the court for sale of the
mortgaged property.

7. The proceeds of the sale is adjusted in the


payment of the loan.

50

2. MORTGAGE BY CONDITIONAL
SALE.

This is a hybrid of sale and mortgage. It is a sale


with a condition of right to redeem the property
covered by deed of Mortgage by Conditional Sale;
Whereas Sale is always unconditional and for a price
agreed upon.

In this type of mortgage


1. The mortgagor effects the sale of the
mortgaged property in favour of the
mortgagee as a conditional sale.
2. The condition is that in case the mortgagor
fails to pay debt, the conditional sale would
be converted in to absolute sale.
51

MORTGAGE BY CONDITIONAL SALE.


3. It is also implied condition that in case
the mortgagor pays the debt amount,
the conditional sale will be taken as to
have been avoided.
4. After receiving payment towards the
debt from
the mortgager, the mortgagee should
retransfer the property to the mortgagor.
5. The parties must have fixed the time for
repayment
of the mortgage
debt.
52

MORTGAGE BY CONDITIONAL SALE.


7. The mortgagee does not become owner
of the mortgaged property only because
the time proposed has expired.
8. The conditional sale is required to be
converted into absolute sale.
9. If the mortgagor neither pays the
amount nor converts the conditional
sale into absolute one - the mortgagee
may apply to the court for the
foreclosure
of the mortgage.
53

MORTGAGE BY CONDITIONAL SALE.


10. Here we should notice that
- the mortgagor has got a right of redemption,
and - equally the mortgagee has got a corresponding
right of foreclosure.
11. Only after the foreclosure of the mortgage
- the mortgagee becomes absolute
owner
of the property.
Otherwise mortgage continues on the basis of
the
principal of -

Once mortgage is always mortgage.


54

3. USUFRUCTUARY MORTGAGE.

1. Usufruct means - profits, increase or benefits.


2. It refers to - profits of the mortgage property.
3. In this Mortgage, the mortgagor and the
mortgagee agree that the usufruct of the
mortgaged property should be adjusted
against the payment of the mortgage debt.
4. A Usufruct mortgage always results into
(i) Repayment of Mortgage Debt; and
(ii) Redemption of the Mortgage Property.

55

4. EQUITABLE MORTGAGE.

1. It is a mortgage by deposit of title deeds of the


mortgaged property.
2. It is also called Mortgage by Deposit of Title Deeds.
3. The property is not transferred.
4. The title deeds alone are given to the mortgagee
as security for repayment of debt.
5. This reduces the burden of Stamp Duty and
Registration charges.
6. Most of the Institutions lending - Home Loans,
or Industrial Loans to small and medium scale
industries accept this type of mortgage as they
are exempted from stamp duty and registration
charges.
56

5. ENGLISH MORTGAGE

1. It is a kind of mortgage - in the English


Jurisprudence.
2. In this mortgage, there are two
promises of reciprocal nature.
3.The mortgagor transfers the property
absolutely to the mortgagee for the
mortgage debt.
4.The mortgagor not only effects the sale
but also delivers the possession of the
property to the mortgagee.
5. The mortgagor also promises to pay the
mortgage debt.
57

ENGLISH MORTGAGE
7. In this way, in English Mortgage there is a
mutual promises between the parties that

(i) mortgagor will pay the debt; and


(ii) the mortgagee will re-sell the
property.
8. In case the mortgagor fails to pay
- the mortgagee
has a remedy to go to
the court of law for foreclosure.
58

6. ANOMALOUS MORTGAGE.

1. Mortgage not falling under any of


the above five (5) categories is
called
- Anomalous
Mortgage.
2. Sometimes, it may be the
mixture of
- one or two kinds of

59

Distinguish

Sale
1.Transfer of
ownership in
property is
made.
2. It is a permanent
determining act on
the part of the
seller and he
remains without
any right in the
property sold.

Mortgage
1.Transfer of an
interest in
specific
immovable
property is
made.
2. Mortgagor remains
the owner of the
mortgaged
property and he
has a right to
recover the
mortgage property60

Sale
3. The sale is made
for a price paid or
promised; or part
paid and part
promised.

Mortgage
3. Mortgage is made
for advancing
money as loan on
the security of the
property.

4. A sale does not


imply existence of
a debt.

4. Mortgage does
imply the existence
of a debt on
security of the
immovable
property.
61

LEASE

[Sec-105]

A lease of immovable property, express or implied,


- is a transfer of right to
enjoy that property;
Made for a certain time or in perpetuity
In consideration of a price paid or promised
or money
or a share of crops, services
or any other thing of value
to be rendered periodically
or on specified occasions
to the transferor by the transferee, who accepts
the transfer on such terms.
62

Essentials of Lease.
1. Two parties to Lease are Lessor and
Lessee
2. There should be a transfer of right of
enjoyment of immovable property.
3. The transfer may be express or implied
4. The transfer must be for a certain time,
or in perpetuity.
5. The transfer must be for consideration.
6. The parties should be competent to
grant and take on lease of such specific
immovable property.
63

License.
The term License is defined under Section-52
of Easements Act as detailed below:
Where one person grants to another
or to a definite number of other persons
a right to do (or) continue to do
in or upon the immovable property of the Grantor
something which would in the absence of such
right be unlawful and
such right does not amount to
an easement interest
or an interest in the property right
is called a License. Parties:
Grantor & Licensee.

Lease vs. License


1. Lease creates an interest in the property,
while License passes no interest in the
property and merely makes an action lawful
which, without it, would have been
unlawful.
2. Lease gives the tenant a right to exclusive
possession of specific immovable property,
while a License confers no such right on the
Licensee.
3. A Lease is assignable
but a License is not transferable.
4. A Lease is not revocable
while a License is revocable at any time.

65

Lease vs. License


5. A Lease is not determined by the Lessor making
an assignment of the subject-matter
but a License is determined in such a case.
6. A Lessee can bring an action for trespass,
but the Licensee cannot sue in his own name.
7. A Lease in some cases require registration,
but a License does not require registration.
8. A Lease holder creates a heritable interest,
but a License does not survive to the heirs and
representatives of the Licensee.
9. A License is determined by the death of the
Grantor while Lease is not so.
66

Exchange [Sec-118]
When two persons - mutually transfer the ownership of

- one property for another


- neither thing or both the things being money only
then, the transaction is
called an exchange.
[if anyone
thing is money the other is not then no Exchange. In
an Exchange - both the things should or should not be money only]

A transfer of property in contemplation of an exchange


- can be made in manner provided for the transfer of
such property by sale. [Procedure is - just like a Sale]
Where both the properties are movable, a delivery of things

will effect an exchange.

Exchange [Sec-118]

Where both the properties are


immovable and
their worth is more than Rs.100/- a registration deed is essential.
When the worth of such immovable
properties
is less than Rs.100/- mere exchange will
be enough to
complete the transaction.
The essential condition of exchange is that
- it must be a transfer of a
68
thing for another thing

Exchange [Sec-118]

Examples of Exchange:
Movables:

- a motor bike for furniture;


- a book for two

other books
Immovable: - a house for another house;
- a 400
yards of house site in a city - for
one acre of agriculture
land in nearby
village etc
Movable for Immovable: a five year old
tractor with all auxiliary units and
69

Exchange [Sec-118]

There may be transfer of property by


exchange:
partly in money and partly in other
property.
For example:
- If the parties exchange
properties,
and - if a small sum of money is paid by
one to the other by way of
adjustment
of the value of the thing,
then - it will not
alter the nature of the

70

Among the following property transfers which are falling


under the category of Exchange & which are not?
1. Ram gives a Cheque of Rs.10 lakhs in contemplation
of exchange of Bheems house.
2. Shyam having received a Rs. 1,000/- currency note,
immediately gives in return to Ram ten hundred
rupees notes.
3. Bheem delivers his lap-top to Shyam who in turn
delivers his desk-top plus Rs. 2,500/-only to Bheem
towards full and final settlement of the transaction.
4. Renuka receives a diamond ring from her friend Rita
and relieves her from the debt liability of Rs. 15,000/5. Chandu transfers his 2 acres of mango garden at the
out- skirts of Hyderabad city to Prakash for the later
transferring his old two storied building situated
near Shamshabad International Air Port, Hyderabad.
71

Gift

[Sec 122]

Gift is transfer of certain existing


movable or immovable property made voluntarily
and without consideration
by one person called donor
to another person called donee.
and accepted by or on behalf of donee.
Such acceptance must be made during the life time
of the donor while he is still capable of giving.
[Competent]
If the donee dies before acceptance, the Gift is void.
If the gift is not made voluntarily, [if made under coercion,
undue-influence, fraud, mistake, misrepresentation etc]
- then, the Gift will become voidable and a suit

to set aside such gift may be filed within 3 years.


72

Essentials of a Gift
1.
2.
3.
4.
5.
6.
7.
8.

The Donor
The Donee
Voluntary act expressed in writing - gift deed.
Absence of consideration [out of natural love and affection]
Subject-matter of Gift - Certain existing property]
Transfer - of ownership,
Acceptance of Gift by Donee
Consequence of death before acceptance by
donee:
- if donee dies: Gift is void
- if donor dies: Gift is void. The
reason in both the cases being there is no transfer
inter vivos.
inter vivos means between two living persons i.e. transfer must be
between two living persons.
73

Charge

[Sec 100]

Where immovable property of one


person is
by act of parties, or
by operation of law
made security for the payment of
money to another
and
the transaction does not amount to a
mortgage
the latter person is said to have a charge
on the
property.
74

By

act of Parties:
No particular form is necessary for creating a charge.
But, adequate intention should be expressed to make
property belonging to a person charged for payment
of a debt mentioned in the deed.

By operation of Law:
This type of
charge is not made by (i) Signature,
(II) Attestation and (iii) registration - of instrument.
The act itself creates
charge in favour of
Unpaid seller [Sec 55(4) (b)
For purchase money paid in advance [S 55(6)(b)]
Mortgagor on surplus sale proceeds [Sec 73]
A person to contribution [ Sec 82]

75

Essentials of a Charge
1. There must be immovable
property;
2. The immovable property may be
made
security - (i) by act of parties or
- (ii) by operation of Law;
3. The security should be for
payment of
money; and

76

Actionable Claim

[Sec 3]

An Actionable Claim is a claim


(i) to any debt other than a debt secured by
mortgage of immovable
property; or
hypothecation or pledge of movable
property; or
(ii) to any beneficial interest in movables, not in
possession of the claimant - either actual
or constructive.
which the civil courts recognise - as affording
grounds for relief whether such debt or beneficial
interest
be existent
accruing

conditional
or
contingent.

77

Attestation
Attestation in relation to an instrument
means and
must be deemed to have meant
attested by two or more witnesses;
Each of whom has seen the executant
sign or affix his mark to an instrument; or
Each of whom has seen some other
person sign the instrument in the
presence or by the directions of the
executant; or
Each of whom has received from the
executant a personal acknowledgement of
78
his

Attestation - 2
And, each of whom has signed the
instrument
- in the presence of the
executant.
Note: 1). It shall not be necessary that
more than
one of such witnesses shall have been
present at
the same time;
2). No particular
form of attestation is necessary;
3). Mere attestation of a document
does not show
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that the attesting witness had notice of

Some Doctrines under T.P Act.

Constructive Notice [Sec 3]


Perpetuity [Sec 14]
Election [Sec 35]
Ostensible Owner [Sec 41]
Lis Pendens [Sec 52]
Fraudulent Transfer [Sec 53]
Part Performance [Sec 53-A]
Clog on Redemption [Sec 67]
Foreclosure [ Sec 68]
Marshalling of Securities [Sec 81]
Subrogation [ Sec 92]
Tracking [Sec 93]
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Distinguish
Sale and Agreement to sell

Sale
Transfer of
property
the property
passes from the
seller to the buyer
immediately so
that the seller is no
more the owner of
the goods sold.

Agreement to
sell
Transfer of
property
transfer of property
is to take place at a
future time or
subject to certain
conditions to be
fulfilled.
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Sale
Nature of
Contract:
Sale is an executed
contract.

Agreement to
sell
Nature of
Contract:
agreement to sell
is executory
contract

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Sale
Type of property
existing and
specific property
only.

Agreement to
sell
Type of property
future and
contingent
property
in some cases it
may refer to
unascertained
existing property.
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Sale
Risk of loss
if the property is
destroyed, the loss
falls on the buyer
even though the
goods are in
possession of the
seller.

Agreement to
sell
Risk of loss
if the property is
destroyed, the loss
falls on the seller,
even though the
property are in the
possession of the
buyer.
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Sale
Consequences of
breach
if the buyer fails to
pay the consideration
or
if there is a breach of
contract by the buyer,
the seller can sue for
the consideration even
though the property
are still in possession.

Agreement to sell
Consequences of
breach
if there is a breach of
contract by the buyer,
the seller can only sue
for the damages and
not for the price
- even though the
goods
are in the possession
of
the buyer.

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Sale
Right to re-sell
the seller cannot resell the property
except in certain
cases, as for example,
in

- a sale by a seller

possession after
sale
under Sec - 30, or
- a sale by an unpaid
seller under Sec 54.
If he does so the

Agreement to
sell
Right to re-sell
in case of re-sale, the
buyer
- who takes the
goods for
consideration and
without notice of the
prior agreement,
- gets a good title.
In such a case,
- the original buyer
can
- sue the
seller for
damages.
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Sale
General property
sale is a contract plus
conveyance, and
creates jus in rem,
i.e.,
- gives
right to the buyer
to enjoy the property
as
against the world at
large including the
seller.

Agreement to
sell
Particular
property
agreement to sell is
merely a contract,
pure and simple, and
creates jus in
personam i.e.,
gives a right to the
buyer against the
seller
to sue for damages.
87

Sale
Insolvency of buyer
if the buyer becomes
insolvent before he pays
for the property,
the seller, in the having
possession over the
property must
surrender it to the
official receiver or
assignee.
Seller can only claim a
ratable dividend for the
unpaid balance
consideration of the
property.

Agreement to
sell
Insolvency of
buyer
if the buyer becomes
insolvent and has not
yet paid the price,
the seller is not bound
to part with the
property, until he is
paid for.

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Sale
Insolvency of
seller
if the seller becomes
insolvent,
the buyer, being the
owner, is entitled to
recover the property
from the official
receiver, or assignee.

Agreement to
sell
Insolvency of
seller
if the buyer, who has
paid the price, finds
that the seller has
become insolvent,
he can only claim
ratable dividend and
not the property
because property in
them has not yet
passed to him.

89