Things you need to know about Contract to Sell Vehicle.
1. What is a Contract to Sell?
A Contract to Sell is an agreement between the seller and buyer for the (a) seller to sell a certain piece of property to the buyer; and (b) the buyer to buy said property from the seller. The contract contains the basic terms of the sale such as (a) purchase price; (b) payment terms; and (c) warranties.
In a Contract to Sell the seller is free to sell the property on an as-is basis (i.e. with no warranties) or with certain warranties to entice the buyer to buy. A warranty is a legally enforceable promise that certain facts and representations about the property are true. This means the seller represents a certain fact as true or makes a representation regarding the product. A common warranty is the seller’s promise to repair the product for any manufacturing defects within a period of 1-year from purchase.
On the other hand, a property sold on an as-is basis has no warranties and the buyer is purchasing the property in its present condition, with all its faults either apparent or not.
With Legal Tree you can create a Contract to Sell for any property and customize it according to your needs.
2. What is the difference between a Contract to Sell and a Deed of Sale?
In a Contract to Sell the seller retains ownership over the property until the buyer fully pays the purchase price. Once the purchase price is fully paid the seller delivers the property to the buyer and transfers ownership over the same to the buyer by executing a Deed of Sale.
On the other hand, in a Deed of Sale the buyer acquires ownership over the property upon its delivery to him, even if the purchase price has not been fully paid. Usually the parties execute the Deed of Sale once the conditions stated in the Contract to Sell have been met, the most important being the full payment of the purchase price.
3. How can a Contract to Sell protect you?
A Contract to Sell protects both the seller and the buyer. For the buyer the contract serves as proof that he bought the property from the seller and has a right to the same. The buyer can also invoke the contract to enforce any warranties contained therein if there is any defect in the product or problems with the sale in general.
For the seller the Contract to Sell is useful if the buyer refuses to pay the purchase price or violates the terms of the sale (i.e. fails to follow the agreed payment terms). The seller can demand the buyer to pay the purchase price by invoking the contract. If the buyer still refuses to pay the seller can file a complaint in court to either (a) enforce payment; or (b) cancel the sale, and claim damages from the buyer.
4. What information do you need to create the Contract to Sell?
To create your Contract to Sell you’ll need the following minimum information:
- The type of seller (i.e. individual or business) as well as name and details (i.e. nationality and address)
- The type of buyer (i.e. individual or business) as well as name and details (i.e. nationality and address)
- Brief description of the vehicle to be sold
- Basic terms of the sale (i.e. purchase price, payment terms, warranties)