Flat purchase agreements no longer one-sided game

By Pritvish Shetty and Vistasp Irani, Vidhii Partners
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When signing an agreement, it would be fair to presume that an individual reads, understands and vets the terms and conditions set forth in the document. Otherwise, it would be impossible to prove the intention and conduct of parties to a contract, unless there is a subsequent allegation of force or fraud.

The Supreme Court has upheld this principle in the case of Grasim Industries Ltd & Ors v Agarwal Steel (2010), more so in the case of commercial transactions. The terms and conditions of a commercial contract, which may seem biased by its mere construction, would be enforceable, considering that businessmen are capable of looking out for their own interests and foreseeing the risks and ramifications of the terms and conditions.

Flat purchase agreements
Pritvish Shetty
Associate
Vidhii Partners

However, such an interpretation would not be justifiable in an agreement between parties, where one party has a higher bargaining power than the other.

In the current scenario, when an individual seeks to purchase a flat, the flat purchaser is often subjected to the terms and conditions of a standard form agreement prepared by the developer.

Considering that the flat purchasers lack bargaining power, they seldom have the choice of altering or amending the terms that are drawn up in advance, and are aimed at benefitting the developer. The only options left with the buyers are either agree to the terms, however unreasonable they may seem, or to pass up the opportunity to buy their desired house.

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Pritvish Shetty and Vistasp Irani are associates at Vidhii Partners.

Flat purchase agreements

Vidhii Partners
G/F Construction House
5, Walchand Hirachand Marg
Ballard Estate
Mumbai – 400 001
New Delhi | Kolkata | Bengaluru
Contact details
Tel: +91 22 4355 8555
Fax: +91 22 4355 8550
Email: vidhii.mumbai@vidhiipartners.com
Website: www.vidhiipartners.com

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