• Cancellation of "Agreement of Sale"

On 25th Feb, 214, I signed an "Agreement of Sale", on Rs 100  Non Judicial Stamp Paper in Hyderabad,  with a person for sale of 2 Acre agricultural land for a price of Rs 3.00 lac per acre and Rs 50 thousand was paid to me towards advance and balance payable at the time of registration of sale deed.

The important terms of agreement are a follows.
1. The purchaser shall pay the balance amount of sale consideration  within 3 months and complete the registration formalities before 3 months.

2. The vendor /owner shall be free to sell the  schedule property to any other persons at any rate and terms and that the cancellation of this Agreement of Sale.
(Note; the above are the exact reproduction as appearing in the agreement)

3.If the vendor fails to  execute the sale deed in favour of the purchaser or his nominee on mutually agreed date, the vendor shall be liable for the specific performance as per law,

4.If the Vendor fails to execute the sale deed in favour of the Purchaser or his  nominee or nominees, shall pay BACK  the advance money.
 Now in spite of several reminders and followup the buyer is just postponing  to complete the purchase obligation.

Now that I have a buyer to buy the  land for 10% more price.

Can I sell the land without any further information to the previously agreed person and and pay back his money whenever he asks? If I inform him now I suspect he may create problems.

Kindly give sutalbe advise.

Asked 3 years ago in Property Law from Hyderaqbad, Andhra Pradesh
1. As per the terms of the said sale agreement , ' time is the essence of the contract'.
2. In that context you can proceed to cancel the sale agreement in the event the purchaser fails to purchase the property within the stipulated time.
3. Is further appears that on expiry of the stipulated 3 months time you have the purchaser several reminder but he failed to complete the sale.
4. In that circumstances send him a a letter cancelling the said agreement along with the refund of advance money and then enter into a sale agreement with another buyer on such terms as you mutually agree afresh.
Devajyoti Barman
Advocate, Kolkata
12493 Answers
159 Consultations

5.0 on 5.0

1. The cancellation of an agreement to sell depends on the terms mentioned in the agreement,

2. In your case the agreement provides for payment of the balance amount within 3 months, a condition which has been dishonoured by the prospective buyer.

3. You can thus proceed to cancel the agreement by issuing a lawyer's notice to him.

4. The earnest money paid by the buyer shall be refunded to him. Thereafter, you shall be free to sell the property to any one you desire.

5. Do not sell it to any one else without first cancelling the agreement.
Ashish Davessar
Advocate, Jaipur
22958 Answers
631 Consultations

5.0 on 5.0

1) since the purchaser has failed to comply with terms and conditions of the contract you are at liberty to cancel the agreement .

2)send a letter by regd post ad that since full payment has not been paid within period of 3 months agreement stands cancelled .

3) refund the advance money paid by purchaser . 

4) you would be at liberty to execute fresh agreement with another purchaser
Ajay Sethi
Advocate, Mumbai
44162 Answers
2561 Consultations

5.0 on 5.0

1) As per the Agreement the purchaser has not complied with the terms and conditions of making the remainder of the payment despite several reminders and the time having been the essence of the contract you can cancel the Agreement and enter into a new Sale Agreement.

2) It is advisable to send a lawyer notice to the purchaser and cancel the agreement and at the same time return the earnest money advanced either by way of a check or NEFT. An NEFT transfer would be more appropriate as that will not allow him a chance to refuse accepting the advanced amount.

3) Clause no.1 and 2 are clearly in your favour and you can quote them in your notice the purchaser.
S J Mathew
Advocate, Mumbai
2229 Answers
110 Consultations

5.0 on 5.0

1. The clause "The vendor /owner shall be free to sell the  schedule property to any other persons at any rate and terms and that the cancellation of this Agreement of Sale"  does not communicate/mean irrefutably that such non payment automatically cancels the said agreement,

2. So, send a latter by registered post (and collect the track record from the internet), stating that the said agreement is hereby cancelled for non performance by the buyer,

3. Enclose a DD towards the refund of the advance paid by him in the said letter,

4. Sell the property after sending the said letter.

Krishna Kishore Ganguly
Advocate, Kolkata
18091 Answers
438 Consultations

5.0 on 5.0

As per Indian contract act, commonly most of the agreement time is the essence of that contract. The vendor and vendee entered in to a contract, both of them ought to have obeyed the terms of the agreement. If any one of the person not fulfill the contract the other one has every right to withdrawn from that contract. In the case of a sale agreement since the purchaser has failed to comply with terms and conditions of the contract the seller has liberty to cancel the agreement and vise verse.

1.	Send a legal notice to the vendee .Express your withdrawal or resentment from contract and cancel the agreement due to the violation of the terms of the agreement.
2.	Provide the details about refund money after the subtraction of other expenses occurred by you in that contract (Commission of brokers etc..)
3.	If needed you can enter in to contract with other person for selling of property.

When is your Obligation released from the agreement?
The earnest money paid by the buyer shall be refunded to him.
Ajay N S
Advocate, Ernakulam
2756 Answers
44 Consultations

5.0 on 5.0

A. Even though the term time is an essence of the contract not mentioned in the agreement that 3 months mentioned in the agreement is should be deemed that time is the essence of the contract while construed the agreement.

B. You can send a legal notice by way of RPAD to the purchaser and must be mentioned that the agreement has been terminated due to fail to get the registration. 

C.  Since the buyer failed to get the registration that you can deduct the advance amount in the presence of penalty clause in the agreement. And after the serving the notice, you are having liberty to transfer your property as you wish.
B.T. Ravi
Advocate, Bangalore
831 Answers
55 Consultations

5.0 on 5.0

You can sell the land subject to cancellation of previous agreement of sale for that you should send a legal notice in this regard and for better safeguard of you let it be published in a news paper.

Thanking you,
Subash M R
Advocate, Bangalore
176 Answers
8 Consultations

3.6 on 5.0

there is a diffrence between agreement of sale and contract of sale. in agreement of sale, seller has right to cancel the sale after giving notice to the buyer that buyer fails to comply the terms of the agreement. if price is partly paid but buyer did not pay rest amount in stipulated time then seller can sell that property any other buyer after giving notice to the old buyer. so you can sell this property to another buyer because you have duly given notice to the buyer. if you have accepted his proposal for extension of period then you should revoke it by giving notice. it is mandatory for you.
Shivendra Pratap Singh
Advocate, Lucknow
4945 Answers
78 Consultations

4.9 on 5.0

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