Cancellation of sale agreement but seller refusing to return advance

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This topic contains 1 reply, has 2 voices, and was last updated by Dr. Ashok Dhamija Dr. Ashok Dhamija 9 months ago.

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  • #2316


    I had entered into a sale agreement with the seller of a property. I am buyer and had paid Rs. 10 lakh as advance for a property whose sale value was decided as Rs. 90 lakhs. Due to some reasons, I am not in a position to complete the deal and I want to cancel the deal. However, the seller is refusing to return the advance amount paid by me? What should I do for this purpose?

  • #2392

    What are the terms of the sale agreement? Does it provide that in case the deal is cancelled by you the advance amount would be returned? Is any time limit set for such clause? Or, does the agreement mention that on cancellation of the deal by you, full advance amount or a part amount of the advance would be forfeited? Likewise, there may be a penalty clause for cancellation of deal by the seller also.

    So, it would depend upon the terms in the sale agreement. However, if the agreement specifically mentions that if the deal is cancelled by you then the seller would return the advance amount, then you may sue the seller for not returning the advance. Otherwise, you may have to go by the terms of the agreement.


    Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles. List of his Quora Answers.

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