What Is the Difference between Agreement of Sale and Sale Deed

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When it comes to the purchase of a property, two important legal documents come into play – the Agreement of Sale and the Sale Deed. While these documents may seem similar, there are significant differences between them. In this article, we will explore the difference between an Agreement of Sale and a Sale Deed.

Agreement of Sale:

An Agreement of Sale is a legal document that sets out the terms and conditions of the transaction between the buyer and seller. It is a preliminary contract that outlines the various terms and conditions agreed upon by both parties, including the sale price, payment terms, date of possession, etc. This document is usually signed by both the parties involved in the transaction, i.e., the buyer and the seller.

One of the most important features of an Agreement of Sale is that it is a legally binding contract. This means that both parties are bound by the terms and conditions set out in the agreement, and any breach of the agreement can result in legal consequences. Apart from this, an Agreement of Sale is also used as proof of the transaction, and it can be used by either party as legal evidence in a court of law.

One crucial aspect to keep in mind is that an Agreement of Sale is not the same as the Sale Deed. It only represents an intention or an agreement to sell or purchase the property and does not transfer ownership rights from the seller to the buyer.

Sale Deed:

A Sale Deed, also known as a conveyance deed, is a document that officially transfers the ownership of the property from the seller to the buyer. It is a legal document that is executed after the payment is made in full, and the property is physically transferred from the seller to the buyer.

The Sale Deed contains important information such as the description of the property, the names of the parties involved in the transaction, the sale price, the mode of payment, and any other clauses agreed upon by the parties. Once the Sale Deed is registered, it is considered a legally binding document, and the buyer becomes the legal owner of the property.

The key distinction between an Agreement of Sale and a Sale Deed is that the former is a preliminary agreement, while the latter transfers ownership rights. An Agreement of Sale is only binding until the property is sold, whereas a Sale Deed is irrevocable and cannot be altered.

Conclusion:

In conclusion, an Agreement of Sale and a Sale Deed are two critical legal documents that play a vital role in a property transaction. While an Agreement of Sale is a preliminary contract that outlines the terms and conditions of the transaction, a Sale Deed is the final document that officially transfers the ownership of the property from the seller to the buyer. As a property buyer or seller, it is essential to understand the difference between these two documents to avoid any confusion or legal issues in the future.

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