Distinction Between 'Sale' and 'Contract for Sale'
Basis of Difference | Sale | Contract for Sale |
---|---|---|
Definition | A sale is the absolute transfer of ownership of immovable property for a price paid or promised. | A contract for sale is an agreement to transfer ownership in the future upon fulfilling certain conditions. |
Legal Provision | Defined under Section 54 of the Transfer of Property Act, 1882. | Recognized under Section 54 of the Transfer of Property Act, 1882, but does not itself transfer ownership. |
Ownership Transfer | Immediate transfer of ownership from seller to buyer. | No immediate transfer; ownership remains with the seller until full execution. |
Rights & Liabilities | The buyer gets full ownership rights, and the seller loses all rights over the property. | The seller retains ownership until the contract is executed. The buyer only gets a right to demand specific performance. |
Registration Requirement | If the property value is ₹100 or more, registration of the sale deed is mandatory under the Registration Act, 1908. | Registration is not mandatory, but recommended for enforceability. |
Possession of Property | Generally, possession is handed over to the buyer along with ownership. | Possession may or may not be transferred until the final sale is completed. |
Legal Remedy for Breach | The aggrieved party can sue for damages or cancellation of the sale. | The buyer can file a suit for specific performance under the Specific Relief Act, 1963. |
Example | A sells his house to B for ₹50 lakhs, executes a registered sale deed, and hands over possession. | A agrees to sell his land to B for ₹50 lakhs, but the ownership remains with A until full payment and execution of the final sale deed. |
Conclusion
A sale results in an immediate transfer of ownership, whereas a contract for sale is a promise to transfer ownership in the future. A sale is legally binding and enforceable, while a contract for sale only creates a right to future transfer.
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