• MOU validity

My father and his brother inherited a property from their grandfather, which is currently under the Court Receiver.

My father had a deal with a builder for his part/share of the property. The MOU (Agreement of sale) made between my father and the builder is franked (100rs) and is not registered. It has a receipt of an xxx amount being paid, but there is no evidence of cheque ever been given or cleared in any account, neither do we have a xerox of the cheque. This was made on 12th March 2012.

The MOU has a clause that it should be brought into action within a year, after which either party can cancel the deal.

My questions are: 

Is this MOU legal? 
Can we talk to another builder without being sued by the one with whom MOU has been made?
How can the MOU be declared null and void?
What is the Limitation act?
Once MOU is null and void will we , the family members be responsible for paying the xyz amount to the builder?
Asked 1 year ago in Property Law from Mumbai, Maharashtra
Religion: Hindu
1) why was court receiver appointed? 

2) has any injunction been granted by court restraining your father from selling his share in property?

3) if your father had executed MOU with builder and received consideration the MOU would be binding upon your father 

4)first cancel the deal as per MOU then talk to another builder

5)it is necessary to peruse terms of MOU signed by your father with builder to advice 

Ajay Sethi
Advocate, Mumbai
23155 Answers
1216 Consultations
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1. All agreements are liable for cancellation depending upon the terms contained therein which is binding upon both of you.
2. So whether the present circumstances give rise to the cancellation or not can be derived only on perusing to the development agreement.
3. Try to rather mutually canceling the agreement and engage a new developer.
Devajyoti Barman
Advocate, Kolkata
5181 Answers
54 Consultations
4.9 on 5.0
As of now as per the time clause of MOU the deal is void.Since the deal has not taken place within one year, to more details need to see the MOU.
Mou is not a legal document, it is an understanding reached on certain  terms and condition to enter into an agreement.However the MOU is an evidence to show that parties were intended to get into a deal and follwing an agreement 
If you are not interested to continue send the builder alegal notice and offer to return the money 
if you can cancel the contract due to your reasons , builder can ask you  to  return the receipt amount unless there is a clause of not returning /forfeiting the amount  he paid. Was there any clause regarding return of money or any fine/penalty on cancelling the deal?
At any case, if you chose not to continue with it send notice and inform him that the deal is void now as the MOU has not been honoured in time.
Regarding the proof of payment received the Receipt and signed MOU is a proof.
Thresiamma G. Mathew
Advocate, Mumbai
1316 Answers
85 Consultations
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A. Generally Memorandum of Understanding agreement is not legally enforceable agreement but it can be enforceable for claiming any monetary or financial loss.

B. In your case, your father has liable to follow the terms of the agreement and binding the same because of your father has created financial and monetary obligations.

C. Notwithstanding anything contained in any MOU, your father liable to pay the amount which received from the builder. The builder can claim the amount by producing this MOU as receipt of the amount.
B.T. Ravi
Advocate, Bangalore
733 Answers
29 Consultations
5.0 on 5.0
1. You can not call the MOU/Agreement  illegal or invalid till it is challenged before the Court and  Court passes adverse order,

2. This MOU/Agreement can be called invalid if some one including you claims that there was no money paid,

3. In that case you wont have to pay anything to the other party at all.
Krishna Kishore Ganguly
Advocate, Kolkata
12084 Answers
228 Consultations
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The Mou is legal since it bears the common understanding of both the parties who entered into such an MOU. The MOU can be declared null and void only if the agreement between the parties did not take place as agreed in the Mou and the terms of the Mou needs to be perused to state whether without cancelling this Mou, you could speak with another builder. 

Limitation Act is a stature enacted by the legislature which provides the time period under which a litigant must approach the court to obtain a particular relief. if the limitation period as provided under the act has expired, the litigant would have to explain why the delay was caused giving reasonable reasons. 
Shaveta Chaudhary (Sanghi)
Advocate, Chandigarh
821 Answers
60 Consultations
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Is this MOU legal? 
Yes it is very much legal.


Can we talk to another builder without being sued by the one with whom MOU has been made?
This will be an illegal act besides breach of contract.

How can the MOU be declared null and void?
What is the reason you ask this question?

What is the Limitation act?
The recitals in MOU will explain  the limitation, however it is three years from the date of its execution if time is not essence of contract. 



Once MOU is null and void will we , the family members be responsible for paying the xyz amount to the builder?
How do you think the MOU is null and void, what are the  reasons  you want  to cite for declaring  it as null and void. ?  The liability of the amount received will remain intact. 
T Kalaiselvan
Advocate, Vellore
13964 Answers
127 Consultations
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1. Unless we peruse the MOU we cannot say whether it is legal or not.

2. If the MOU is stamped it did not had to be registered.

3. The receipt of payment is sufficient to show that the remittance took place.

4. Has the builder violated any of the clauses incorporated in the MOU? You can cancel the MOU only if the builder has contravened the MOU. 

5. If the MOU is cancelled your father will not be liable to pay the balance amount to the builder. Your father can seek the recovery of the amount already paid to him once the  MOU is cancelled.
Ashish Davessar
Advocate, Jaipur
18083 Answers
447 Consultations
5.0 on 5.0

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