Under section 4 of the Sale of Goods Act, 1930, what does the term "contract of sale" cover?
Question and options
Under section 4 of the Sale of Goods Act, 1930, what does the term "contract of sale" cover?
A sale, an agreement to sell and a hire-purchase
Both a sale and an agreement to sell
A sale, but not an agreement to sell
An agreement to sell, but not a sale
Answer and explanation
Correct answer: B - Both a sale and an agreement to sell
Section 4 of the Sale of Goods Act, 1930 says a contract of sale may be absolute or conditional; where property passes at once it is a sale, and where it is to pass later or on a condition it is an agreement to sell. Both are contracts of sale. A hire-purchase agreement gives only an option to buy and is a bailment until that option is exercised.
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