Consequences of breaching the sale and purchase agreement

The agreement that is breached

Who breaches the agreement, and how it is breached.

Responsibility or legal consequences

Remarks

1.

Provisional Sale and Purchase Agreement

Vendor refuses to sell.

Vendor pays the purchaser a sum equivalent to twice the amount of the initial deposit if such has been expressly written on the provisional agreement.

Agreement terminated.

2.

Provisional Sale and Purchase Agreement

Purchaser refuses to buy.

Purchaser loses the initial deposit to the vendor if such has been expressly written on the provisional agreement.

Agreement terminated. Vendor is free to sell the property to another person.

3.*

Formal Sale and Purchase Agreement

Vendor refuses to sell.

i) Refund the initial and further deposits to the purchaser.
ii) Be sued by the purchaser for compensation.

Agreement terminated. The amount of compensation depends on the actual loss suffered by the purchaser in purchasing a similar flat elsewhere (e.g. rise on market price of the flat after vendor's back out).

4.*

Formal sale and Purchase Agreement

Purchaser refuses to buy.

i) Purchaser may lose all the initial and further deposits.
ii) Be sued by the vendor for further compensation.

Agreement terminated. The amount of compensation depends on the actual loss suffered by the vendor (e.g. price reduction arising from the resale of that flat).

In usual case, vendor may not be able to claim all the deposits as forfeiture if they exceed 10% of the purchase price, unless the actual loss has justified such forfeiture.