5 Differences between a Sale and an Agreement to Sell in a Sales of Goods Contract in Kenya.
Sales of Goods Contract in Kenya depends on the value of goods in a contract whereby the seller agrees to transfer the property in the goods to the buyer for money consideration called the price
Essential Characteristics of Sales of Goods Contract in Kenya
- There must be two district parties i.e. buyer and seller
- The seller must transfer or agree to transfer property or ownership
- The subject matter of the contract of sale must be goods
- Consideration for a contract of sale must be goods
- The term contract of sale includes both a sale and an agreement to sell.
The Sales of Goods Contract in Kenya provides that where under a contract of sale, the property in good is transferred from the seller to the buyer. The contract is called a sale. But where the transfer of property in goods is to take place at a future date or subject to same condition thereafter be fulfilled the contract is called an agreement to sell.
- Transfer of Ownership of Property
- Consequences of Breach
- Risk of Loss
- Right of Resale
- Insolvency of the Buyer before the Sale of Goods
Transfer of Property of Ownership in relation to Sale of Goods Contract in Kenya
One difference between a Sale an Agreement to Sell in a Sales of Goods Contract in Kenya is ownership. Ownership is passed immediately to the buyer incase of a sale whereas in an agreement to sell conveyance takes place later so that the seller continues to be the owner until the agreement to sell becomes a sale either by expiry of certain time or the fulfillment of some conditions
Consequences of Breach in relation to Sale of Goods Contract in Kenya
Another difference between a Sale and an Agreement to Sell in a Sales of Goods Contract in Kenya is Consequence of Breach. Under a sale the seller cab sue for price whereas under agreement to sell the seller can only sue for damages
Risk of Loss in relation to Sale of Goods Contract in Kenya
Risk of Loss is another difference between a Sale and an Agreement to Sell in a Sale of Goods Contract in Kenya.The risk of loss lies with the possessor and not the possessor under sale and under agreement of sell it lies with the owner.
Right of Resale in relation to Sale of Goods Contract in Kenya
Another difference yet between a Sale and an Agreement to Sell in a Sales of Goods Contract in Kenya is Right of Resale. Under sale the seller has no right to resell. A subsequent buyer cannot certain title if he has knowledge of previous sale. Under agreement to sell can resell and buyer can only sue for breach
Insolvency of the Buyer before the Sale of the Goods Contract in Kenya
The last but not least difference between a Sale and an Agreement to Sell in a Sales of Goods Contract in Kenya is the Insolvency of the buyer before he pays for the goods. Under sale and in the absence of right of lien the seller must deliver goods to official receiver and is only entitled to a ratable dividend for the price. Under agreement, the seller may refuse to deliver good since he still has the ownership
A contract of Sales of Goods Contract in Kenya has terms regarding the quality, price, mode of payment. Not all the terms are equal in importance. Some of the terms are major and are referred to as conditions while are minor and are referred to as warranties. The breach of conditions may dissolve a contract but the breach of warranties may not be so vital.
Express and Implied Conditions in relation to Sale of Goods Contract in Kenya
Express and Implied conditions also affect a Sales of Goods Contract in Kenya. Conditions are express when they are willingly inserted in the contract by the parties and implied when the law presumes their existence in the contract automatically. Unless otherwise agreed the law in co-operated into contract of sale of goods the following implied conditions.
- Sale by description: The buyer specifically describes what he wants
- Sample: Give a sample to the supplier to buy exactly the same
- Sample and description: The buyer gives a description of what he wants and also a sample for the seller to buy exactly the same.
- As to fitness or quality: The rule that the buyer should be aware that unless he explains to the seller the purpose for which the goods are required in which cause the buyer will be relying on the seller’s judgment. It will be assumed that the seller is familiar with the goods.
- The condition as to merchantability. The good should be by market standard being in sale-able condition. The condition is implied only where sale is by description. Merchantable quality must be that good must be reasonable under the description by which they are known in the market.
Implied Warranties and their effect on a Sales of Goods Contract in Kenya
Implied Warranties have their effect on a Sales of Goods contract in Kenya in the following ways;
- Warranty of quiet possession: Once you have acquired a good you are entitled to enjoy it without interference.
- Warranty of freedom from encumbrances: Whatever good you have brought, nobody else has lien over those goods.
- Warranty of disclosing of the dangerous nature of goods to the ignorant buyer i.e. pesticides: The seller must inform you of dangers of lunch goods.
- Doctrine of caveat emptor means buyer beware: Implies that it is the duty of the buyer to be careful while purchasing good for his requirement and that in the absence of inquiry from the buyer the seller is not compelled to disclose any defect in the goods of which he may be aware.
Exceptions to the Doctrine of Caveat Emptor in relation to Sale of Goods Contract in Kenya
Exceptions to the Doctrine of Caveat Emptor also affect the Sales of Goods Contract in Kenya.
The seller makes a mi representation and the buyer relies on it. Such as contract is voidable at the option of the innocent party
The seller makes a false representation amounting to fraud and the buyer relies on it or where the seller actively conceives a defect in the goods so that it cannot be discovered on reasonable insemination. In this case the contract is also voidable at the option of the buyers.
Further reading on Business Training in Kenya is available
Conclusion on the Sales of Goods Contract in Kenya
As seen above one is therefore able to disseminate the difference between a sale and an agreement to sell. It therefore provides a lot of valuable information on Sale of Goods Contract in Kenya.
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