Know Your Rights if Other Party Fails to Honour Sales Agreement
Sep 28, 2018 Legal Guidance
Every contract may come across a glitch. The sales agreement is also at no ease as well when either of the parties fails to honour the sales agreement. One must know the rights in such cases.
For Sellers
A situation may arise from any of the parties. One must be prepared, and before taking any decision, the following points should be considered.
- The first thing to do is to read sales clauses in the agreement carefully.
- Check for the provision of the payment if the buyer fails to abide by the agreement.
- Check for a clause in which it states that the remaining amount of money would be paid only post the buyer is convinced with the title of the sale property.
- Check if there is any clause that you can send a legal notice to the buyer instead of cancellation of the agreement and ask for compensation for the damages caused.
- Check if there is a clause stating that the buyer can back out on the agreement in case of failure of getting a home loan.
In case the agreement was a registered one, then the cancellation deed will have to be executed by both the parties post which the property can be sold to a third party. In a situation, if the buyer refuses to cancellation agreement of a registered agreement, the seller can file a suit for specific performance to balance payment.
Buyers
The same set of rules apply another way around as well, where the buyer should refer to the contract of sale agreement before making any decision. Relevant clauses can save a lot of money as well as effort.
- Check for the provision regarding seller backing out from the deal as per the contract.
- Check if there is a clause that specifies the seller can cancel the deal in case if certain conditions are not met from the seller’s point.
- Check if the buyer can issue a legal notice to the seller for agreement cancellation and seek damages caused.
So, both buyer and seller can get the advantage of seeking damages caused in case where either party fails to complete the sale process. The seller must return all deposits, including added responsible expenses if any, if the seller is the defaulter to the buyer. Buyer should always go for registered sale agreement to be on a safer side.
Either party can compel completion of the sale under specific performance. This means that either party wants to complete the transaction under particular terms and conditions. Only the court has the final say on this.
Either party can compel completion of the sale under specific performance. This means that either party wants to complete the transaction under particular terms and conditions. Only the court has the final say on this.
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