A sales agreement is a legal document or a contract between a buyer and seller outlining all the exchange terms. It is a legally binding document that serves as a roadmap for all parties to adhere to. Some of the key components that make a sales agreement are as follows that entails the rights, responsibility, and obligations:
- An identification proof of all the parties involved
- A descriptive account of the product or a service
- A closing date
- The various items included in the exchange
- Legal description
It also enlists a date of the walk-through inspection and a liquidated damages clause.
WHEN DOES ONE NEED A SALES AGREEMENT?
A sales agreement is needed when one is buying or selling, it is used in a complex sales transaction, especially in a real estate sale. Some of the elements entailed in a sales agreement are the time allowed for the sales to take place, the amount and payment details in the earnest money transaction, and in some cases even the partial payment of the contract consideration. It is also imperative to use a sales document when one is looking to transfer liability of a property, goods, or any service to a new party.
WHAT ARE THE DETAILS REQUIRED IN A SALES DOCUMENT?
Some of the exclusive details that are required in a sales document included by section 55 of the Transfer of Property Act are as follows:
- The first is that the seller of any property has absolute possession of the property and has the authority to transfer the sales agreement in favor of the buyer.
- The sales document has to disclose in full detail any defect in material, third-party disputes, and claims if there may be any.
- Details of nil encumbrance/ lien in any to the property are also mentioned in the sales agreement.
- Transferring the property’s title deeds from the seller to the buyer, receiving full payment, and giving the buyer full possession of the property.
- The buyer has to also pay the seller and any government dues on the property.
- Through the sales agreement – the seller also assures to provide all the additional documents to protect the buyer’s rights, the documents such as transferring utilities as well as all municipal records to the buyer’s name.
LET’S ALSO LIST ALL THE PREREQUISITES THAT NEED TO BE CONSIDERED BEFORE SIGNING A SALES AGREEMENT
- A careful listing of all the property details in the document like the carpet area, here one should also entail that this agreement is adhering to the RERA laws of clarity.
- The crucial detail of the agreement is that it should contain all the specific details of both the buyer and the seller – like name, father’s name and address, etc.
- One has to also ensure that the property details are clearly mentioned in the agreement along with the terms of payment, as in how the payments will be done while buying this property.
- Make sure that the encumbrance certificate is also attached to the document; this has all the details that the property is free from any mortgage, loan, and any other debt.
- One should also ensure that the signature of the buyer and seller is available on all the pages of the sales document.
- Once when obtaining the registration certificate, it must be created on a stamp paper of ₹500 and ₹100 (this is subject to the state rules). This certificate should carry the signature of the two witnesses, along with their identity proofs and other documents.
There is also the indemnity agreement that remains a vital document for the buyer and the seller even after signing the sales document. The sale agreement has validity for a maximum of 3 years from the date of the execution. The buyer in this case has the right to request compensation and remedies for future title flaws from the seller – he/she can do so by emphasizing the need for a comprehensive indemnity contract, this indemnity contract is free of specific time frames or conditions.
In conclusion, one may say that the sales document is a document that establishes the transparency and authenticity between the buyer and seller through the sales deed.
