breach of contract in the agreement of earnest money paid
jach000019
(Querist) 26 May 2011
This query is : Resolved
yesterday i had purchased the property, property at baroda (guj.), property is in the name of 80 yrs old lady who is living in america his son dealt with me through power of attorney whic was made in the year 2008 and in the power of attorney both the address are written , america as well as baroda's address now the matter is this that the buying amount of the property is 10 lac and i have paid him the 3 lac rupees as earnest money the balance amount will be paid after 3 months for which seller will again come for collecting the balance consideration and registration of the documents.
further in the agreement it is mentioned that if the buyer breach the contract than earnest money paid by the buyer to the seller will be forfeited but the penalty/damage clause for the breach of agreement by the seller is not mentioned.
therefore i would like to know that will there be any problem which may arise in future because of this.
secondly in future if the seller do not accept the remaining consideration due to any reason and can he later on say that it is breach of contract from the buyer's side that remaining consideration was not paid by the buyer.
what is the safety measures should be taken in this matter to fullfill the deal without any hitch. please suggest
Bovan Cherian Varkey
(Expert) 26 May 2011
Dear Sir,
I am answering the query based on what you have mentioned herein above. I have not seen or read the agreement executed by the the seller and the buyer. Hence answering the same on a general basis.
In order to answer more precisely, I need certain clarifications from your end. The first statement in your query is "yesterday i had purchased the property". Is the transaction is complete? If so who conveyed the property? If the transaction is complete and the property is conveyed and handed over the possessions, then no question will not arise; Provided the parties who entered the contract are the true owner.
With regard to the first query that there is no specific terms against the breach by the seller, no law in India prohibits the buyer to approach the court for the earnest deposit. Provided, the burden of proof is on the buyer to prove that it is the seller who made the breach.
With regard to "secondly in future if the seller do not accept the remaining consideration due to any reason and can he later on say that it is breach of contract from the buyer's side that remaining consideration was not paid by the buyer". Under Indian law there is a recourse to the said buyer. The buyer can very well approach the civil Court for SPECIFIC PERFORMANCE OF THE CONTRACT.
Bovan
+91 94470 22265
Guest
(Expert) 26 May 2011
Dear Jach,
In fact such questions would have been asked by you before entering in to the agreement.
According to agreement, your earnest money can be forfieted on breach on your part. But, on breach on the seller's part your claim for refund will still remain intact.
To safeguard your interests so that the seller may not unnecessarily pretend breach to be on your part, just start making some correspondence with the seller in connection with your property transaction.
You may also like to clarify whether the amount of Rs. 3 Lakhs was paid by you by cheque or by cash and whether you took proper receipt for the money other than the mention in the agreement?
jach000019
(Querist) 26 May 2011
thanks for reply,
further sorry for the mistake in fact it is not yesterday it is actually 3-4 days back secondly i have paid to the seller3 lac by the way of cheque and the same is written in the agreement alongwith the cheque numbers and the cheque is also honoured by the bank,further the transaction is not complete i have to pay the remaining consideration7 LAC on or before 90 days after .
But now i am telling to the seller that cancelled the old agreement and make the new fresh sell agreement in which breach of contract in my favour (liqdidated damage made by the seller) should also be written because as per the law similar benefits should be given both the parties but he is denying and the bondwriter(who made the documents) also saying that the document are correct it can not be written as per the law, the breach of contract in your favour if seller breach the contract.
Here i would like to mention that our sell deed is made on100/- STAMP PAPER and is duly notarized.
jach000019
(Querist) 27 May 2011
thanks for reply,
further sorry for the mistake in fact it is not yesterday it is actually 3-4 days back secondly i have paid to the seller3 lac by the way of cheque and the same is written in the agreement alongwith the cheque numbers and the cheque is also honoured by the bank,further the transaction is not complete i have to pay the remaining consideration7 LAC on or before 90 days after .
But now i am telling to the seller that cancelled the old agreement and make the new fresh sell agreement in which breach of contract in my favour (liqdidated damage made by the seller) should also be written because as per the law similar benefits should be given both the parties but he is denying and the bondwriter(who made the documents) also saying that the document are correct it can not be written as per the law, the breach of contract in your favour if seller breach the contract.
Here i would like to mention that our sell deed is made on100/- STAMP PAPER and is duly notarized.
jach000019
(Querist) 27 May 2011
thanks for reply,
further sorry for the mistake in fact it is not yesterday it is actually 3-4 days back secondly i have paid to the seller3 lac by the way of cheque and the same is written in the agreement alongwith the cheque numbers and the cheque is also honoured by the bank,further the transaction is not complete i have to pay the remaining consideration7 LAC on or before 90 days after .
But now i am telling to the seller that cancelled the old agreement and make the new fresh sell agreement in which breach of contract in my favour (liqdidated damage made by the seller) should also be written because as per the law similar benefits should be given both the parties but he is denying and the bondwriter(who made the documents) also saying that the document are correct it can not be written as per the law, the breach of contract in your favour if seller breach the contract.
Here i would like to mention that our sell deed is made on100/- STAMP PAPER and is duly notarized.
H. S. Thukral
(Expert) 29 May 2011
when the time of performance of contract comes, i.e. when you have to pay balance amount and get the documents ready, write a note to the sellor that you have money ready and ask for date of execution of the deed. this will show that you were ready for performance of the contract. This will help you in case you have to resort to litigation.
Regarding breach of contract, you can ask for specific performance of contract/damages/refund of your money.
