legal standing of sales agreement

still contractor is not a owner, so he has not clear tittle over the property to sell it to you.  You have to prucahse the prpeorty from the original owner.

It is not wise decision to pay the amount in adviance to the contractor.

 If you intend to purchase it you have to purchase from the real owner having title over the property, and as pointed out by Rajeev, the contractor's title is not yet ripened into ownership as the sale is yet to be completed and you have to be careful with that aspects. If you wish to purchase it get the title of the property clear through title investigation by  engaging a lawyer.

If it written in cotractors and owners agreement that the contractor can sign on behalf of owner u can give him small token but at he time of saledeed the sign of real owner is required.

The agreement is legal if in this agreement the contractor has described abt the previous agreement, which was entered with the original land owner. But if the sale deed will be executed, then the original owner will execute it directly in your favour.