top of page

AGREEMENT TO SELL

WHAT IS AGREEMENT TO SELL?

Agreement to sell is governed by The Indian Contract Act 1872 that is a legal document required for property transactions. Under such agreement the seller agrees to give property to the buyer that is free from all encumbrances and in return the buyer agrees to pay price to seller as promised between them and certain terms and conditions are mentioned on which both the parties must agree and give their consent. It is a contractual property agreement to sell a particular property between seller and buyer at a decided price and terms between them at a particular future date.


Agreement to sell is binding upon both the parties and is a road map on how property transaction will be completed. In contrary, buyer is given 2 or 3 months time period to arrange the funds and to fulfill any other formalities as required before the actual sale. Both the parties agrees to mention certain clause in the contract that will be penalty for not respecting the contract, failure of dues by the buyer etc. An agreement clearly states the property description as well that how much will be
the floor area, carpet area, its direction, property is free hold or lease hold or mortgaged etc. and in case of mortgaged or lease hold property the terms and conditions are mentioned accordingly. An agreement to sell is signed by both the parties in the presence of two witness.

OUR SERVICES :

Our experienced professionals will draft whichever document you need, tailored to your business requirements. We offer every client  a free consultation call to

thoroughly discuss their requirements and clarify any doubts they may have after which a customized document is drafted, according to every client’s specific needs.

Let us draft Agreement to Sell for you, personalized and customized according to your specific needs.

ESSENTIALS OF AGREEMENT TO SELL

Certain essentials are required for agreement to sell which are as follow:

Presence of Two Parties

There must be two parties in agreement to sell, one is seller and the other is buyer. Both seller and buyer must be a different person.

Proper consideration

Consideration includes price (in terms of money) which

a buyer has to pay to seller as promised or decided between them.

Transfer of ownership from seller to buyer
Competency of parties

Both the parties’ i.e. seller and buyer must be of sound mind and shall make an agreement without any coercion, undue influence. Parties must note that while making agreement they are not suffering from any kind of illness and also they are not under intoxication.

Conditions

Conditions include the day and time on which the delivery of particular goods will happen and in
return the buyer will accept the delivery by paying the price to seller as promised between them.

A seller must transfer the ownership of property in

goods in the name of buyer.

DIFFERENCE BETWEEN SALE & AGREEMENT TO SELL

Section 4(1) of The Sales Of Goods Act, 1930 states that a contract of sales of good is a contract under which seller transfer or agrees to transfer particular property in good to the buyer at a decided price between them.

A contract is an agreement which is enforceable by law. Every contract must have an agreement but every agreement is not a contract.
 

Section 4(3) of The Sales Of Goods Act,1930 properly defines Agreement to Sell that means where the property in goods need to be transferred in future prior to which some conditions has to be fulfilled, such contract is called an agreement to Sell. According to section 4(4) of the act, an agreement to sell becomes sale when time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred. So, it is clearly observed that a contract for the sales of good may be a sale or an agreement to sell depending upon the conditions.

FAQ's

Q

What is the difference between sale or agreement to sell?

A

A sale means when there is an actual sale of goods whereas when there is an intention to
sell the goods in future and some conditions need to be satisfied for same is called agreement
to sell.

Q

Is agreement to sell required to be registered?

A

No, it is not compulsory to get an agreement to sell registered as per the amendments under Registration Act, 1908 which states any agreement related to sale of immovable property of
value more than one hundred rupees needs to be registered.

Q

What do you mean by an agreement to sell?

A

An agreement to sell means where one party (seller) agrees to sell some property to another
party (buyer) on a future date in regard to the conditions mentioned in an agreement.

Q

What are the duties of a seller and buyer?

A

A seller has a duty to deliver the products to buyer on his demand for delivery whereas
buyer has the duty to accept it by paying the price as decided or promised between them.

Q

A

What is the term of validity of agreement for sale?
The agreement for sale is valid for 3 years.
bottom of page