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Cancellation of Agreement to Sale: What You Need to Know

When buying or selling a property, an agreement to sale is often drafted and signed by both parties. This agreement outlines the terms and conditions of the transaction, including the price, payment schedule, and the timeline for completing the sale. However, sometimes circumstances can arise that make it necessary to cancel the agreement to sale.

What is Cancellation of Agreement to Sale?

Cancellation of agreement to sale refers to the termination of a contract between a buyer and a seller before the completion of the sale. It could happen due to several reasons, such as a breach of contract by either party, inability to obtain financing, or unforeseen circumstances that make it difficult or impossible to complete the sale.

Legal Implications of Cancelling an Agreement to Sell

The legal implications of cancelling an agreement to sell depend on the circumstances surrounding the cancellation. For instance, if one party breaches the agreement, the other party may be entitled to damages. If the seller cancels the agreement, they may be required to refund the buyer`s deposit, plus any other expenses incurred by the buyer in preparation for the sale.

In some cases, a court may determine that the cancellation was unlawful or wrongful, and order the party responsible to pay damages. It is therefore important to consult with a legal professional before cancelling an agreement to sale.

How to Cancel an Agreement to Sale

In most cases, an agreement to sale can only be cancelled by mutual agreement of both parties. This means that both the buyer and the seller must agree to cancel the transaction and sign a cancellation agreement.

If one party unilaterally cancels the agreement, they may be in breach of contract and may be required to compensate the other party for any damages incurred. It is therefore important to communicate with the other party before cancelling the agreement and to seek legal advice if necessary.


Cancellation of agreement to sale is not uncommon in the real estate industry. It is important to understand the legal implications of cancelling an agreement to sale and to seek legal advice before taking any action. By following due process and communicating with the other party, you can avoid unnecessary legal disputes and ensure a smooth cancellation process.