As the term suggests, a sale agreement is an agreement between a buyer and a seller for a particular transaction. It should be done on a stamp paper of an appropriate value and must be notarized in order to give it legal acceptance.
A sale agreement is indeed an enforceable legal contract and if any of the parties do not follow the conditions laid in the contract, they are liable for a legal action.
Common pitfalls from sellers’ perspective
A sale agreement binds both the parties of the contract to honor the terms and conditions signed off by both the ends. However, sometimes many important points are missed out or overlooked, and it becomes a matter of concern once things go in the opposite direction. Therefore it is important to take care of certain significant points that include the following:
- What are the clauses in case a buyer does not follow the agreed terms and conditions?
- What are the consequences of buyer failing to make payments as per the schedule mentioned in the agreement?
- Are there certain conditions that become legally binding only when the seller fulfills certain other conditions connected to the subject matter? For instance, is there a clause which says that the buyer will make the payments only when all the legal papers of the property are suitably verified and found error-free?
- Under what conditions, a buyer becomes eligible to cancel the contract?
These are some of the fundamental points a seller must keep in mind when signing off a sale agreement.
Common pitfalls from buyers’ perspective
In a sale agreement, both buyer and seller should have equal grounding. Most times, it is seen that the sale agreements are prepared by the sell side and thus they tend to incline in the favor of the sellers. As an informed consumer, you must ensure that your rights are not suppressed in any manner. You may cross-check on the following points for sure:
- What are the conditions if a seller does not follow any terms and conditions agreed upon in the agreement?
- Under what circumstances, an agreement becomes null and void?
- Can a seller cancel an agreement willingly? If yes, then what are those conditions/
- What are your rights if a seller cancels the agreement and does not obey the agreement?
- Are there any provisions for claiming damages in case the seller violates the sale agreement?
- What are the conditions under which you are entitled to receive refunds of any payments made by you? The refund clause may be triggered by a buyer for any reason or automatically on violation of the contract. However these triggers must be clearly specified under the agreement.
The courts in India are awash with millions of cases under which parties have filed for breach of contracts. It is advisable for both the parties of the contract to keep the contract sacrosanct and follow the mutually agreed conditions, in order to avoid legal troubles that take several years to resolve and drain out considerable resources.