Agreement to sale

A Sales and Purchase Agreement is a contract that obligates a buyer to buy and a seller to sell a product or service. These agreements are found in all types of businesses.

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A Sales and Purchase Agreement (SPA) is a contract that obligates a buyer to buy and a seller to sell a product or service. These agreements are found in all types of businesses but are mostly associated with the real estate industry. It is a legally binding contract sketching the terms and conditions of the buyer and seller of a property. It is an essential legal document in any sale and purchase process. It includes several significant protections to all the parties involved and provides the legal framework to complete the sale of a property. SPA serves the basis of transaction, the framework; things included and excluded from the sale and purchase agreement.

It also contains detailed information about the buyer and the seller. It serves as a record of any deposits made as negotiations move forward, any portions of the agreement that have already been met or transactions that have already been completed, as well as an official record of when the final sale is to take place. The terms included in the SPA are the amount of earnest money, purchase price, list of items included or excluded from the purchase and sale.

Property Sale Agreement is the most important document. Sale and Purchase agreement contains the Terms & Conditions which have been agreed uponby the Seller & Buyer for the sale and purchase of a property. In simple terms, the Sale agreement is a road map of how the property transaction will be completed. On the other hand, the Sale deed is executed at the time of actual transfer of property, i.e. transfer of ownership from the seller to the buyer.


Parties to the agreement
Sale and Purchase Agreement should include the name and address of the parties in the agreement.
Indemnity Clause

Due to the sudden rise in prices of property, they are under the litigation. The cases related to the property go on for decades. The reasons for legal disputes are as follows:

  • The property is transferred from one party to other under influence, coercion or force.
  • The legal heirs of the seller claim their rights

The indemnity clause should always be drafted carefully. It specifies and indemnifies the buyer against any legal dispute of the property. It mentions that if any legal dispute arises in future, the seller will compensate the buyer for any loss incurred.

Penalty Clause

The standard clause is put in the agreement that if the buyer backs out from the deal, then a certain amount will be forfeited by the seller. The agreement includes clauses relating to the forfeiture amount, penalties, and other charges on the buyer and seller if they fail to act as per the terms mentioned in the agreement.

Cancel the deal

If the seller of the property fails to provide the legal documents required by the buyer or if the buyer finds out any legal defect in the property before the execution of sale deed, or if the bank rejects the home loan of buyer due to some legal issues in the property documents.

Outstanding dues

It is necessary to add the clause which states that the Seller will clear all the dues accrued with respect to the property before the date of registration.


This agreement should mention all the amenities that the seller is agreed to provide to the purchaser.

Transfer of deposit

This clause should mention the transfer of all deposits paid for water connection, electricity connection, membership of Clubhouse, Gym, etc.

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