Agreement to sell
Querist :
Anonymous
(Querist) 29 March 2018
This query is : Resolved
I have entered into an agreement to sell my property for sum of Rs..XXXXXXXX. Five clauses amongst others of Terms of the Agreement are as follows:-
Clause No 1. That The sale consideration for rights and titles of the seller in the said property is fixed between the parties at Rs..XXXXXX, out of which the seller has acknowledged the receipt of a sum of Rs..XXXXXXX as advance amount.
Clause No 2. The Buyer will also pay other part payment of Rs..XXXXXXX to the seller on or before DDMMYYYY
Clause No 3. That the balance sale consideration of Rs..XXXXXXX will be paid by the buyer to the seller on or before DDMMYYYY.
Clause No 8. If the buyer commits breach of the agreement, the seller shall be entitled to forfeit the entire earnest money paid by the buyer to the seller; and the seller will be at liberty to resell the property to any person. If the seller commits breach of agreement, he shall be liable to refund the double of earnest money received by him to the buyer.
Clause No 9. That in case any of the party hereto infringes any of the terms and conditions of this agreement, then the other party will be entitled to get this transaction enforced through the court of Law by specific performance of the contract at the cost of the party who has defaulted
Note : The advance amount mentioned in clause 1 is exactly 10 % of the total sale consideration while part payment mentioned at Clause 2 is approx 40 % of total sale consideration. Now the date of part payment has arrived, but the buyer has not paid the money .
My queries are:-
1. Verbal discussions were held with the buyer 2 days before the date of part payment and he had sought some more time. Is any notice in writing required to be given to him that he has failed to make the part payment ( though informal communication through sms has been made to him)?
2. If he fails to make any payment on or before the last date of the agreement, can advance amount paid by the buyer be forfeited without any notice in view of clause 8 of the agreement. Is the word 'advance amount' used in clause 1 has the same connotation as earnest money used in clause No 8 as amount mentioned in clause 1 was the initial 10 % amount received at the time of entering into the agreement.
3. Alternatively , can the buyer be dragged to court for specific performance of the contract in view of clause 9 of the agreement. If yes, how much time does it take to get the decision of the court- I mean long drawn process or straightforward.
Advice is benignly solicited.
Guest
(Expert) 29 March 2018
Time Limit to file a specific performance suit is 3 years from the date of agreement.
Guest
(Expert) 29 March 2018
Better the Sale agreement to be Registered to get it more Legally Valid. In your case at this stage dont take any Risk of getting it Registered
Guest
(Expert) 29 March 2018
In some sale Agreements they would include the Clause that the Advance amount be forfeited if the Sale is not completed with in specified time.
Guest
(Expert) 29 March 2018
Any how you send a Legal Notice first stating since the deal is not completed the advance amounts are forfeited and sale agreement is cancelled.
Guest
(Expert) 29 March 2018
The Buyer would certainly Rush up to complete the deal.
Guest
(Expert) 29 March 2018
Discuss with your Advocate.
P. Venu
(Expert) 30 March 2018
The seller cannot unilaterally 'forfeit' the alleged earnest money if the transaction could not be completed as per the agreement. The buyer can get back the amount less the reasonable expenses and loss, if any, suffered by the seller because of the failed transaction.
Guest
(Expert) 30 March 2018
If a Specific Clause is mentioned in the Sale Agreement the Advance amount could be Forfeited.
T. Kalaiselvan, Advocate
(Expert) 02 April 2018
Just because the clause for forfeiting the entire advance amount is mentioned, it cannot be come rule or law.
Such unlawful clauses are not enforceable in law.
A reasonable amount towards the administrative cost can be deducted and the balance have to be refunded.
Strictly speaking, the sale agreement is valid for three years from the date of agreement or renewal.
