What it is:
A sale is the transfer of title to a piece of property or performance of a service in return for compensation. In the retail world, a sale means a temporary price discount on certain items.
How it works (Example):
Let's say John Doe is cleaning out his garage and needs to get rid of his lawnmower. He calls his neighbor, Jane Smith, to see if she wants it. She offers him $50 for the mower. John accepts, giving her the lawnmower in return for the $50. This transaction is a sale.
Why it Matters:
Sales are one of the basic concepts of commerce. In the legal world, several conditions must exist for a sale to take place. For example, the person selling the item or service must be the legal owner of the item or service in the first place. The sale has to involve the transfer of or other items (as in bartering), and the parties must agree on the thing being sold. The two parties must enter the transaction willingly (i.e., neither of them can be "forced into" the transaction). Often, a bill of sale, also called a receipt, formally transfers the ownership of the item to the buyer.