• Buyer not honoured the Agreement of Sale

Dear Advocates,

We have entered into an agreement of sale with a party on 5th of April 2018, to sell my house within 45 days of time. May 19th which is 45th day of the agreement, the buyer has not paid the amount in full. I am still yet to receive an amount. Out of 42 lakhs which was agreed to be paid as on 19th May 2018, the buyer had given me 3 lakhs on 5th of April( 1st day of agreement), 4 lakhs on 8th of May(34th day of agreement) and 15,32,000 on 18th of May( 44th day of the agreement) at 9.30 p.m. Can I still go ahead and sell the flat to him, since bank has approved his loan. Can I claim any compensation form the buyer as they have not adhered to the contract. If I can Claim how do i do it and close the registration, as I have committment on the other side.
Asked 4 years ago in Property Law
Religion: Hindu

3 answers received in 30 minutes.

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17 Answers

You can go ahead and sell flat to him if he is willing to make balance payment

2) there must be clause in contract that in case buyer fails to pay balance amount agreement stands terminated

3) you can cancel agreement and refund money received by you or extend time fir making payment by mutual consent

4) seek compensation for delay in making payment

Ajay Sethi
Advocate, Mumbai
87895 Answers
6207 Consultations

5.0 on 5.0

Extend time for making payment by mutual consent or cancel agreement

Ajay Sethi
Advocate, Mumbai
87895 Answers
6207 Consultations

5.0 on 5.0

Dear Sir,

You can claim damages for not paying the amount within stipulated period. Get issue a legal notice and ask him to get register the property within 15 days failing which entire his amount to you will be forfeited and you sell the same to some other person. FOR LEGAL NOTICE CONTACT ME. FOLLOWING THE SC JUDGMENT






[Arising out of SLP (Civil) No. 4605 of 2012]

Satish Batra .. Appellant Versus Sudhir Rawal .. Respondent

J U D G M E N T K. S. Radhakrishnan, J. 1.

1.Leave granted.

2. The question that has come up for consideration in this appeal is whether the seller is entitled to forfeit the earnest money deposit where the sale of an immovable property falls through by reason of the fault or failure of the purchaser.

19. We are, therefore, of the view that the seller was justified in forfeiting the amount of Rs.7,00,000/- as per the relevant clause, since the earnest money was primarily a security for the due performance of the agreement and, consequently, the seller is entitled to forfeit the entire deposit.

Kishan Dutt Kalaskar
Advocate, Bangalore
6050 Answers
381 Consultations

4.8 on 5.0

This is my response to you:

1. Does the agreement mention 45 days?

2. Did you make any exemption in the 45 days, example like 45 days excluding holidays and sundays;

3. You must send the legal notice;

4. If he is not willing to pay the rest of the amount then you can claim compensation;

5. You can file a suit for specific performance of the contract;

6. You can also file for compensation for the physical, mental and monetary loss suffered by you.

Gowaal Padavi
Advocate, Mumbai
1920 Answers
5 Consultations

5.0 on 5.0

See the compensation, if at all, will come at cost. If you are keen to get a compensation you may drag the other party to litigation by sending a legal notice in complaince of the terms of the contract.

All legal action can only be taken once notice has been served upon the entity or individual you wish to take to court. It is only this process that legalises bringing a matter to court. The intimation sent is known as a legal notice. A legal notice is, therefore, a formal communication to a person or an entity, informing the other party of your intention to undertake legal proceedings against them. This notice, when sent, conveys your intention prior to the legal proceedings and thus, makes the party aware of your grievance. Many a times, a legal notice served will bring the other party on heels, and the problem can get resolved out of court too, with fruitful discussions on both sides. And, if the other party is still not heeding to the grievance, one can always start the court proceedings after a particular interval, as stated by the law. Although a legal notice can service as a purpose of negotiations between the parties and save time, effort and money that are usually spent in court cases.

Please understand that other party may have defence on what you are claiming so be cautious.




Shri Gopal Verma
Advocate, New Delhi
312 Answers
5 Consultations

4.0 on 5.0

1. You can terminate the contract

2. For locking your property for 45 days and for lost opportunity from other prospective buyers, you can deduct 10% from the amount so far paid and refund balance without interest

3. Since the bank has approved loan of buyer then you can also think of completing the contract. In that event it won't be possible to claim any compensation from buyer, provided the amount is disbursed to you in a reasonable time

4. If there is any default clause in your contract against the buyer then you can invoke that against buyer for delaying the contract and not completing transaction within agreed time

Yusuf Rampurawala
Advocate, Mumbai
6876 Answers
79 Consultations

5.0 on 5.0

It is up to you whether to extend the contract or to cancel the agreement and it is depending upon your financial requirement. Besides, you can file a suit for specific performance under specific relief act for relief to enforce the contract along with damages for the delay in payment.

Konda Srinivas
Advocate, Hyderabad
211 Answers
2 Consultations

Not rated

1. Is there any clause in the agreement for sale mentioning that certain percentage of the amount paid as advance will be deducted or forfeited by you in case he fails to pay the entie consideration within the stipulated period?

2. If yes, then you can forfeit the said amount and cancel the said agreement after sending him a letter of cancellation of the agreement along with a cheque of the balance amount paid by him.

3. While taking the above step you shall have to keep in mind that he is probably not delaying purposely and is waiting for the bank loan and that now a days, the real estate market is very bad and it will not be prudent on your part to cancel the agreement unless you have got a better offer from another party.

4. If there is no forfeiture clause in the said agreement, you can not deduct any amount and claiming compensation for the delay may not yield your desired result.

Krishna Kishore Ganguly
Advocate, Kolkata
26602 Answers
726 Consultations

5.0 on 5.0

1. He has paid you around 50% of the consideration and the delay is negligible.

2. Moreover, you know that he is awaiting bank finance.

3. It will be prudent on your part to discuss with him and allow him some more time to complete the deal as his failing to pay with in the time or delaying full payment for few days will not give you any legal opportunity to make any gain unless there is a forfeiture clause inserted by you in your said agreement for sale.

Krishna Kishore Ganguly
Advocate, Kolkata
26602 Answers
726 Consultations

5.0 on 5.0

1. It is not clear whether you made specifically 45 days time ' as essence of the contract' which means the circumstances when the time specified in the agreement is not be strictly followed to determine whether the agreement is liable for compliance or cancellation.

2. So send him a final notice seeking full payment within a time schedule in default of which you can cancel the agreement. Once you cancel the agreement you will have to refund the money received from him and then you can enter into a new agreement with another perspective buyer.

Devajyoti Barman
Advocate, Kolkata
22515 Answers
402 Consultations

5.0 on 5.0

Respected Sir, if the buyer is ready and willing to make payment then yes you can still sell the property to him.

Further if you wish as the buyer has not honored the agreement cancel the deal and refund the amount to buyer and deduct token amount for compensation.

Further in my advise since the loan has been granted I would advise to make an sale deed with the buyer and ask for an compensation amount for delay.

Shubham Jhajharia
Advocate, Ahmedabad
25516 Answers
179 Consultations

5.0 on 5.0

If there is any forfeiture clause in the agreement you may forfeiture the amount as specified but you cannot take all the amount and make refund of the amount along with the notice that as the conditions of agreement is not met so you cancel the agreement. Hope the agreement is registered else it will be difficult to execute.

Vimlesh Prasad Mishra
Advocate, Lucknow
6848 Answers
23 Consultations

4.9 on 5.0

You can sell the flat if you get all the consideration. You can also file a suit for non performance if you want to challenge his acts.

Prashant Nayak
Advocate, Mumbai
27224 Answers
88 Consultations

4.4 on 5.0

Though the time has been stipulated as 45 days, since the payments have been made in installments and you too have accepted the same, the limitation shall extend up to three years from the date of last payment in this regard.

therefore you may not be able to cancel the booking or can claim any compensation etc in this regard i.e., delay in making full and final payment of sale consideration amount.

T Kalaiselvan
Advocate, Vellore
78050 Answers
1543 Consultations

5.0 on 5.0

he has not paid me the entire amount as a part of the agreement. As on 45th day which is yesterday he only paid me 22 lakhs odd.

Dont create a fuzz over it, because nothing is enforceable or maintainable in law if you cite this as a reason.

T Kalaiselvan
Advocate, Vellore
78050 Answers
1543 Consultations

5.0 on 5.0

You can claim, if there`s any default clause for compensation. Well, u can rescind the contract or can continue.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

You can file a suit for specific performance against the said party, so as to make him honour his side of the agreement.

Specific performance is a remedy developed by principle of equity. A party to a contract who is damaged because the contract is breached by another party has the option to file a suit for specific performance compelling to perform his part of contract.

Siddharth Jain
Advocate, New Delhi
5925 Answers
101 Consultations

5.0 on 5.0

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