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Globally, it has become a realm of documentation, agreements, and contracts in the last few decades. India is no exception.
The contracts/ agreements have become the defacto standard to get synchronized with the law of the land. In this blog, let us understand the key differences between a Sale Agreement format and an Agreement to Sell format.
A sale agreement of land is a contract that would detail the clauses pertaining to the terms & conditions of transactions relating to the sale of real estate and/ or assets of any kind (both tangible or intangible).
This sale agreement format facilitates the commodity of sale to be transferred to the new buyer from the original owner. The transfer of ownership of goods is the key element of this agreement. (1)
On the contrary, the sample letter of agreement to sell property is done as an expression of interest between the seller and prospective buyers with the agreed clauses and conditions.
This type of agreement could be done between the seller and a prospective buyer. As it is only the expression of interest the transfer of goods does not happen unless the sale agreement is done. Once this is in agreement, the sale agreement format arises. In other words, an agreement to sale could be the first step and once the sale is formalized, the Sale Agreement format takes over.
In sample sale agreements, the transfer of ownership from the seller to the buyer happens instant and the original seller cannot resell the goods. However, in the Agreement to Sell the seller could resell to another buyer if the conditions are not met as per the Agreement of the first prospective buyer. Once the agreement of sell is agreed upon, the Sale Agreement format can be discussed and drawn.
The key difference between the two could be explained as the sale agreement is an executed contract whereas the agreement to sell is an executory contract (conditional contract). In other words, an instant transfer of goods from seller to buyer is a Sale Agreement, and the pre-requisite towards the future transfer of goods from seller to buyer is Agreement to sale. (2)
The other difference between the two (sale agreement of land and Agreement to Sell) is both the risks and the rights of the goods are transferred to the buyer on incomplete terms at the instance of the Sale Agreement, but in the Agreement to Sell the risks and the rights of the goods are still with the seller till the sale is done.
We’ve laid the difference between Sale Agreement and Agreement to Sale – scroll down to see a Sale Agreement format.
This SALE AGREEMENT is executed at <city-name>
by and between
Seller Contacts and Aadar ID card number
hereinafter called “THE FIRST PARTY”.
And in favor of
Prospective Buyer Name
Contacts and Aadar ID card number
hereinafter called “THE SECOND PARTY”.
The expression of the terms the ‘FIRST PARTY’ and the ‘SECOND PARTY’ wherever they occur in the body of this Sale Agreement, shall mean and include them, their legal heirs, successors, legal representatives, administrators, executors, the transferee(s), beneficiary(ies), legatee(s),probatee(s), nominees and assignee(s).
AND WHEREAS the FIRST PARTY has agreed to sell, convey, transfer and assign to the SECOND PARTY and the SECOND PARTY has agreed to purchase the property as per the following details
Any other relevant details of the property
to as “THE SAID PORTION OF THE SAID PROPERTY” for a total sale consideration of Rs. <value in figures> (Rupees <value in words>). NOW THIS SALE AGREEMENT WITNESSETH IS AS BELOW:
1. The Second Party has expressed his interest to buy the property in its entirety which is located at
<Complete Address of the property> as mentioned in the Schedule-A at a price of <Price of the property> free from all encumbrances.
2. The Second Party has paid a sum of <Value> as advance money on <Date> by way of <Mode of payment with details if bank transfer>, the First Party hereby acknowledges the receipt of this advance money and the balance amount of consideration will be paid by the Second party to the First Party at the time of execution of sale deed.
3. The sale shall be completed within a period of <tenure in months> months from this date of signing this Agreement.
4. The First Party shall submit all relevant documents including the copy of title deeds of the property in his possession to the Second Party or the Second Party’s Lawyer by <ddmmyyyy>
5. In case of Second Party’s Lawyer submits the report that the First Party’s title is not clear, or there are other litigations, the First Party agrees to refund the advance money, without interest to the Second Party within <number of days> days from the date of submission of Second Party Lawyer’s report.
6. If the First Party does not refund the advance money within <number of days> days from the date of report submission of the Second Party Lawyer, the First Party will be liable to pay interest at the rate of < % of interest> per month.
7. The First Party assures that there will not be any encumbrance at the time of sale.
8. The First Party further assures that the property will be handed over to the Second Party on the same date when the registration of sale is done.
9. In case the Second Party commits any breach of the agreement, the First Party shall be entitled to forfeit the advance money and the First Party will have complete authority to resell the property to any other person.
10. In case the First Party commits any breach of the agreement, the First Party shall be liable to refund advance money to the Second Party plus a fixed sum of <Rs. Fixed Sum> in lieu of liquidated and incidental damages.
11. The First Party shall execute the sale deed in favor of the Second Party on receipt of the agreed total sum as per this Agreement.
12. It has been agreed that the expenses towards Sale deed registration charges and stamp duty shall be borne by the Second Party.
13. As such, <the city name in which the property is located> Courts shall have exclusive jurisdiction to entertain any dispute concerning this Agreement.
14. Schedule above referred to IN WITNESS WHEREOF the parties have set their hands to this Agreement on this day <ddmmyyyy>
First Party Name
Aadar Card number:
Second Party Name
Aadar Card number:
Aadar Card number
Aadar Card number