- As per Section 10 of the Indian Contract Act , all agreements are contracts if they are made by the free consent of the parties competent to contract, for a lawful consideration and with a lawful object and are not expressly declared to be void.
- Further , a MOU is a statement of understanding between two or more parties which when made has no enforcibility in the eyes of law , as such an agreement has no intention to create a legal bond between such persons.
- But , when an MOU has been made as per section 10 of the Indian contract Act, then it is a valid agreement.
- Further , no stamp duty is required on MOU, but if the MOU for an agreement to purchase immovable property worth more than Rs. 100/- , then it is mandatory to be registered and stamped .
- Further, if the MOU contains its expiration , then it lost its value , otherwise , the limitation period to challenge an MOU is 3 years from the ate of its execution .
- Since, the said MOU with the buyer is not registered and stamped , hence it is not a valid document to be produced in the court.
- Further since, there is already given an expiry period i.e.21.06.2020 in the MOU , then the buyer cannot cancel the said MOU and ask for the refund of the token amount , otherwise , as per the clause he will not be liable to get his money back legally.
- Further , if the seller refused to transfer the property in the name of the buyer after receiving full amount, then the buyer will approach the court for the performance of MOU , after filing a suit for Specific performance, and in that eventuality , the court grant stay for selling to third person .
- But, as the buyer wants to cancels the deal himself , hence a suit for specific performance to perform cannot be filed by the buyer.
- However, the said buyer can approach the court for the refund of the deposited amount within 3 years period of the execution of MOU against the seller.
- The seller should send a legal notice to the buyer for cancelling the deal as given in MOU, and to forfeit the amount deposited by him .
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