05 November 2012
I entered into a Sale AGreement for sale of my immovable property with a potential buyer. The agreement is valid for 120 days' from date of agreement. The agreement becomes null and void at the end of the tenure or Registration of the Sale Deed, whichever is earlier.
The agreement also provides for a penalty clause for non-performance on the part of the Buyer or Seller.
For technical reasons, the transaction has been called off by me(Seller). I am willing to adhere to the penalty clause due to non-performance on my part, i.e., I will be liable to pay the penalty amount as specified in the agreement and close the transaction.
Question:
Can the Buyer opt to set aside the penalty clause already included in the agreement and instead force me to Register the Property in his favour? Please advise from a legality point of view.
19 November 2012
Kindly go through the exit clause if any provided in the agreement before the contract is executed? If yes then you can do it otherwise you have to adhere to the agreement and the other party may terminate it. The agreement can be terminated on payment of compensation to the other party
CAclubindia
