• Process of cancellation of agreement of sale

Dear sir,
We've signed an Agreement of sale for a house two weeks back and no money has been exchanged so far. Now we do not wish to buy that property.

So kindly advice on
1. Can we cancel the agreement? And if we can, then kindly explain what shall we do, the process.
2. Can the other party go to court regarding the issue? The buyer claims he is losing customers because of the agreement he made with us.


Please Advise.

Thanks and regards,
Dr. Akhilesh
Asked 1 year ago in Property Law from Hyderabad, Telangana
Religion: Hindu
1) is agreement for sale registered?

2) what are the terms of agreement for sale regarding time within which payment should be made and consequences in case you fail to make payment ? 

3) you can cancel the agreement with consent of seller . 

4) if you cancel the agreement for sale unilaterally seller can drag you to court and file suit for specific performance 
Ajay Sethi
Advocate, Mumbai
23294 Answers
1220 Consultations
5.0 on 5.0
If the agreement has been registered then both parties must be present for its cancellation also.
If the agreement has not been registered but only notarized or signed on a stamp paper, then you the buyer can send an intimation to the seller that you are no longer interested in proceeding with the purchase (state specific reasons), since no money has been exchanged, the seller will only curse you and also might seek some monetary compensation for causing loss to him (negotiate with him on this amount) He can go to court seeking specific performance of the agreement against you only if
a) agreement is duly registered,
b) if agreement is sufficiently stamped (as per Telangana stamp act)
Kiran N. Murthy
Advocate, Bangalore
765 Answers
51 Consultations
5.0 on 5.0
An agreement made without passing any consideration is actually void.  What was the clause or terms of the agreement?
You can terminate the agreement by giving a notice to  the buyer stating that you are no more interested to sell the property since he has not paid any advance amount towards the consideration of sale so far. 
Consult a local lawyer and take decision as per his further advise after seeing the agreement paper.
T Kalaiselvan
Advocate, Vellore
14069 Answers
127 Consultations
5.0 on 5.0
1. What does the cancellation clause, if any in the agreement, say? Once the agreement has been entered into it can be cancelled only within the periphery of the cancellation clause.

2. If the agreement is sans a cancellation clause then you can issue a lawyer's notice to the seller to cancel the existing agreement. 

3. The prospective seller will be at liberty to sue you to claim compensation for cancellation of the agreement and also judicial directions to you to honour the agreement i.e to buy the property. His claim can be contested in the court by you if the cancellation is due to his fault.
Ashish Davessar
Advocate, Jaipur
18160 Answers
449 Consultations
5.0 on 5.0
1) the agreement is completely silent about consideration to be paid 

2) further no time period is mentioned within which payment is to be made 

3) agreement is silent as to consequences in case you fail to make payment within stipulated period 

4) no particulars are given of any earnest money paid by you 

5) the agreement is badly drafted 

6) have you taken inspection of the title deeds ?

7) contact a local lawyer 

8) you can terminate the agreement by informing the vendor that you do not want to proceed with the purchase of property and cancel the agreement
Ajay Sethi
Advocate, Mumbai
23294 Answers
1220 Consultations
5.0 on 5.0
1) it appears that you have had the agreement drafted 

2) since you do not want to proceed with purchase inform the seller that you are cancelling the agreement and he is at liberty to search for another buyer 

3) since no payment is made there is no question of forfeiture or refund of any earnest money 
Ajay Sethi
Advocate, Mumbai
23294 Answers
1220 Consultations
5.0 on 5.0
1. Since the agreement is devoid of a cancellation clause the cancellation can unilaterally be done only if there is a breach of the agreement by the seller. Your query does not mention any such breach by him. Law does not permit unilateral cancellation without case.

2. The seller not having a copy of the agreement does not create any right in your favour. 
Ashish Davessar
Advocate, Jaipur
18160 Answers
449 Consultations
5.0 on 5.0
1. You had entered into an agreement for doing some act against some act to be done by the other party,

2. Normally, there are clauses mentioned in the agreement for its termination,

3. If you do not act as per the agreement, he other side may file a specific performance suit for which the Court may direct you to perform specifically as per the agreement signed by you or compensate for the loss incurred by the opposite side for your not complying with the terms of the agreement entered into by you.
Krishna Kishore Ganguly
Advocate, Kolkata
12123 Answers
231 Consultations
5.0 on 5.0
1. If you have entered in to an agreement, you should comply with what you have agreed to perform,

2. Otherwise you can be sued as detailed in my earlier post.
Krishna Kishore Ganguly
Advocate, Kolkata
12123 Answers
231 Consultations
5.0 on 5.0
1.You have escaped the clutches of law by keeping the original agreement with you when the said agreement was not registered

2. Just deny that you have ever entered in to any agreement,

3. The seller will not be able to claim any thing from you for want of the original agreement,

4. Relax.
Krishna Kishore Ganguly
Advocate, Kolkata
12123 Answers
231 Consultations
5.0 on 5.0
From the contents of the so called agreement posted by you now it can be seen that this is not at all an agreement to sell the property.  The contents mentioned are the conditions which the vendor is obliging to carry out.
There is no sale agreement at all.
There is no mention about sale consideration.
There is no mention about when the sale will take place .
There is no mention about the termination clause 
There is no mention about acceptance of sale, k.e., buying and selling by both on the specified conditions.
There is no mention about the buyer's role in the sale agreement
The so called sale agreement is on Rs. 100 NJS paper and has no legal validity.
The said sale agreement can be called off without any notice or by giving a verbal notice and not beyond that. 
You dont have to worry about such an absurd sale agreement, it is purely amateur and nothing serious about the property sale transaction hence can be ignored.
T Kalaiselvan
Advocate, Vellore
14069 Answers
127 Consultations
5.0 on 5.0
1. Cancellation of agreement can't be debarred by way of agreement.
2. So in your case on breach of agreement or in unavoidable circumstances one party can send notice of cancellation and either send or demand earnest money depending on the situation.
Devajyoti Barman
Advocate, Kolkata
5227 Answers
54 Consultations
4.9 on 5.0

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