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Termination of Sale and Purchase Agreement

The Sale and Purchase Agreement is a legally binding contract outlining the agreed terms and conditions of the buyer and seller mentioned in the contract. This agreement provides the legal framework to complete the sale of a property. It essentially sets out the agreed elements of the property and also, includes several important protections to all the parties involved in the agreement. Among the terms typically included in the agreement are the purchase price, the closing date, and the detailed descriptions of the property.

In addition to these terms, the contract interlinks numerous remedies.

For this reason, sale and purchase agreements should be approached carefully and rigorously, with legal experts guiding both the seller and the buyer.

Sale and Purchase Agreements Mostly Involve

  • Exact details of buyer and seller -information such as full names, addresses, phone numbers
  • listing the type of sale
  • mention the Dates of the initial agreement,
  • terms of payment
  • it also includes the dates when other parts of the contract are to be completed,
  • Mention the Date of the final closing of the contract and
  • Transfer of ownership details
  • Describing the descriptions of the property and any deficits or defects that are known at the time the agreement is drafted.

Common Reasons for Disputes in Sale and Purchase Agreements

Termination of sale and purchase agreements can happen for any number of reasons. Some common reasons are as follows:

Agreement Between the Buyer and Seller:

This may seem obvious, but the simplest reason when contract termination would result in nullifying one’s responsibilities under the contract is when both parties agree to terminate the agreement.

  • Disagreements:

when there are any disagreements regarding the ownership of property or the terms of the contract.

  • Nonperformance:

A sale and purchase agreement can be terminated if either party does not fulfill the obligation mentioned within the contract.

  • Instances of Mistake, Fraud, or Misrepresentation:

If a sale and purchase agreement was formed under a condition that involves  mistake, misrepresentation, or fraud, the agreement may be terminated,

  • Legal ways to terminate a property contract

some methods of termination of the contract (not limited to)

  • Mutual consent

Termination of contract by mutual consent takes place when a contract is no longer functional

  • If the contract can no longer be performed,
  • The parties involved had fulfilled the required obligations within the contract.

Above mentioned are the few situations when the parties can formally terminate a sale and purchase agreement in writing. When the termination is mutual, no consequences are involved unless the contract affects other contracts. The contract is no longer enforceable once it is terminated. Contracts can be terminated with the consent of both parties. Also, do not terminate without first consulting with an attorney to make sure that either party is not held liable for breach of contract.


Both parties to the contract may also choose to seek a court or arbitral order for judgment for the termination sale and purchase contract.

Valid Termination of the contract: Below mention is the most common situation when the parties may seek a court order

  • When either party has violated the terms of the contract.
  • For any misconduct on behalf of either party to the contract.
  • Nonpayment by either party for the performance of specific duties

Termination by the contract

Specific Laws

Depending on the type of contract, there may be sector, industry-specific, or other laws that must be considered when terminating a sale and purchase contract.

Remedies Awarded

  • Include a damages award to cover the losses, or an injunction ordering one party to remedy a property defect or preventing a party from doing something on his or her property.
  • Either party may claim monetary damages for violating the terms of the contract. These damages may include damages that help cover the losses of the non-breaching party or compensatory damages to punish the breaching party
  • In some cases, the court may also order to continue the contractual obligation by either party.

Sales and Purchase Agreement (SPA) Advisory

Sale and purchase agreements may involve some very specific legal issues and matters, you may wish to hire a lawyer if you need help resolving any property dispute or termination of sale and purchase agreements’ lawyers and legal consultants can help you regarding property laws. We can navigate you through the legal process and can deliver you quality results. Contact us for further consultation