Agreement for Sale


    What is Agreement for Sale?

    An agreement for sale is a legal contract between seller and purchaser regulating the mutual promises made by each party. It is a formal document that evidences the sale and purchase of certain goods or immovable property. An agreement for sale is a legal document and a written promise to transfer certain goods or property for consideration (money). It records the terms of such transfer and such payment and also the penalty in case of non-transfer of goods/property or non-payment of consideration. 

    Why is it required?

    An agreement for sale of goods/property is drafted stating a seller’s and buyer’s willingness to sell and buy respectively, goods or property. It determines the terms and conditions of sale between the parties. The agreement is binding on both the parties. It is an important step as all the rights and liabilities of the parties are stated clearly and thus avoids future legal trouble and confusion. One of its main purposes is to serve as written evidence of the selling and buying of such goods or properties. It safeguards the interests of both the seller and the buyer. It is a legal document and is enforceable in the Court of law. 

    What should it cover?

    It should consist of all the necessary terms and conditions. The following are important terms that must be included in a agreement for sale among others:

    1. The relevant personal details of the parties such as full name, residential addresses and ages of the parties to the agreement,

    2. Description of the goods/property to be sold by the seller,

    3. Method of delivering the goods and the time taken for the delivery of such goods/properties,

    4. Terms of the payment, including the mode of payment, the amount to be paid by the purchaser to the seller and the duration within which the payment is to be completed,

    5. Indemnity clause designed to seek compensation from the seller should there be any losses/expenses in the future,

    6. Penalty clause explaining the details of what the penalty would be if the seller or purchaser defaults in performing their duties as per the agreement, 

    7. Clause stating the right to call off the deal,

    8. General clauses such as termination of agreement, applicable laws, arbitration clause, etc.) and

    9. Date of signing of the agreement. 

    Documents Required

    There are no specific documents required for the drafting and execution of an agreement for sale. However, ID proofs of the parties in order to confirm the names and permanent addresses of the lender and borrower should be scrutinised. Documents evidencing clear title of the property/goods of the seller in question should also be examined. 

    Procedure

    No set procedure is applicable in the making of an agreement for sale. However, once the agreement has been drafted by a lawyer, it should be specifically and carefully read by both the parties to the agreement. Any necessary changes required to be made shall be carried out and once the agreement is finalised, it shall be signed by both the parties along with the requisite witnesses. The agreement for sale is legally binding when it is printed on judicial stamp paper/e-stamp paper and signed by both the parties. The stamp paper value depends on the particular State in which it is executed. Each party should thereafter keep a signed copy of the Agreement for sale. 

    How can a lawyer help?

    One of the first and the most important steps that you must undertake is to hire a good documentation lawyer as he/she is aware of the nitty gritty of the legal procedures and necessary requirements involved in drafting of agreements for sale. A lawyer would draft an agreement for sale, better than you can yourself, for obvious reasons. A lawyer has the necessary legal knowledge and experience to handle and draft such documents. He/She will be able to guide you and draft for you according to your particular situation -  the facts, circumstances and needs involved. A documentation lawyer is aware of good drafting technique and the clauses that must be included in your agreement. Hiring a good lawyer in order to draft such important legal documents is a prerequisite and will help you in more ways than one.

  • Disclaimer: The information contained in the sample document is general legal information and should not be construed as legal advice to be applied to any specific factual situation. Any use of the Site or document format DOES NOT create or constitute a solicitor-client relationship between LawRato or any employee of or other person associated with LawRato and a user of the Site. The information or use of documents on the Site is not a substitute for the advice of a lawyer.

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