Forfeit earnest money

Whether the amount deposited with the seller of a property is earnest money capable of being forfeited in the case of non-performance by the buyer, would depend upon the language of the contract. If the contract says explicitly that the deposit made is contemplated to be a performance guarantee and no less, it can be forfeited by the seller in the event of non-performance by the buyer.

The Supreme Court in Satish Batra v.

Sudhir Rawal laid down the following ingredients which must be present in the contract so as to enable the seller to forfeit the deposit. In the case on hand, the petitioner seller had entered into a sale agreement with the respondent to sell a property for Rs 70 lakh with the buyer making a deposit of Rs 7 lakh liable to be forfeited if he does not keep his part of the promise.

On the flip side, it was also agreed that the seller would pay double this amount i. Rs 14 lakh to the buyer origin of nigerian stock exchange case he defaults.

Earnest money not forfeited on failure of real estate contract - Roger McEowen, May

On the facts of the case the Supreme Court had no hesitation in forfeit earnest money the Delhi High Court verdict and instead upholding the claim of the petitioner to forfeit Rs 7 lakh deposited with him as earnest money. Catalyst Multimedia Today's Paper Topics ePaper WealthCheck.

The Importance of Being Earnest: All About Earnest Money Deposits

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The Importance of Being Earnest: All About Earnest Money Deposits

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