Also known as: present sales
Written by attorneys · grounded in primary & secondary sources — see below
A sale of goods accomplished by the making of the contract. Goods must be both existing and identified before any interest in them can pass under the agreement.
Nova Plastics agreed in writing to supply Apex Appliances with 5,000 custom-molded casings for a new appliance line. At signing the casings had not been manufactured and no inventory had been marked for Apex. Because the goods were neither existing nor identified, the agreement operated only as a contract to sell rather than a present sale transferring immediate ownership.
A state conveyed mineral rights in a producing field to a private corporation through a transaction labeled a present sale. Title to the oil and gas passed out of state ownership at the moment of the agreement, subjecting the income from later extraction to ordinary state taxation rather than any claimed exemption.
Select any source to read its text and confirm it supports the definition.
A present sale occurs only when the goods are both existing and identified at the time the contract is made. If either condition is missing the transaction is treated as a contract to sell future goods.
No. An unplanted crop is future goods because it is neither existing nor identified at contracting. The agreement therefore operates only as a contract to sell once the crop comes into existence and is identified.
Yes. Harvested corn already in an identified silo is existing goods. Specifying a quantity from that silo sufficiently identifies an undivided share, allowing a present sale of that interest even without physical separation.
The original agreement remains a contract to sell. Once the goods exist and are identified, title can pass at that later time, but the transaction never retroactively becomes a present sale.
…or if the Purchasers shall abandon said property, the Vendors shall have the right, at their option, to rescind and cancel the present sale and declare this contract as null and void thereafter, and the amount of the purchase price paid by the Purchasers hereunder shall be considered and treated as rent and liquidated damages…