buyer’s rights and liabilities

8/17/2019 Buyer’s Rights and Liabilities

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Buyer’sRights andLiabilitiesBharat Vijay P

6th Semester

847


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Liability ! "ection ## $#%$a%

The buyer is bound&to disclose tothe seller any fact as to the natureor e'tent of the seller(s interest in

the property of which the buyer isaware) but of which he has reasonto believe that the seller is not

aware) and which materiallyincreases the value of suchinterest*


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+or e'ample) the buyer may haveto disclose to a woman selling herproperty that she is the absoluteowner and not a limited owner. Buthe need not disclose to her thatthere is a mine in the propertybecause the buyer’s duty only

relates to facts concerning title.


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Liability ,!"ection ## $#%$b%

-t’s the buyer’s duty to pay or

tender) at the time and place ofcompleting the sale) the purchase&money to the seller or such person

as he directs!


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R/0-121 that) where the propertyis sold free from encumbrances)

the buyer may retain out of thepurchase&money the amount ofany encumbrances on the propertye'isting at the date of the sale) and

shall pay the amount so retained tothe persons entitled thereto*


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Where money is retained by thepurchaser to pay o3 an encumbrancethe section provides that he shall paythe amount so retained to the persons

entitled thereto.But there may be circumstances where

there is no such obligation to pay theamount retained to the vendor.

This can be seen in the case of Mohd.Siddiq v Muhammad Nasirullah $454%, 6ll ,,7 $8%


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Mohd. Siddiq v MuhammadNasirullah $454% , 6ll ,,7

$8%

art of purchase price retained byvendee $buyer% in order to pay o3

an encumbrance.2ncumbrance was not paid o3 and

was larger than the amount

retained."uit by vendor to recover the

amount retained with interest.


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Held& The security is meant to ma9e the

property free from encumbrances so asto get a good title.

0endee to retain the security) untilvendor provides the rest of the moneynecessary.

-nterest not to be given unless vendee

refused to or omitted to pay the moneywhen they were informed by the vendorthat he was prepared to pay the balancenecessary to satisfy what was due tothe mortgagee.


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When the purchaser retains theencumbrance money) the mortgageecan sue him to recover the amount) as

the purchaser is under statutory duty$shall pay% to pay the amount to themortgagee . The mortgagee can alsosue the vendor in which case the vendor

can sue the purchaser.


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6fter the completion of the sale) the

buyer becomes the absolute owner ofthe property and has to bear anythingthat happens to the property that is notcaused due to the seller.

+or e'ample) 6 buys a property for acertain amount of money) but the landbecomes ;ood prone due to construction

of high roads nearby and hence theproperty su3ers reduction in its value.

The liability is on the buyer and hasnothing to do with the seller.


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Liability


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Right ! "ection ## $%$a% The buyer is entitled) when the

ownership of the property haspassed to him) to the bene=t ofany improvement in) or increase invalue of) the property) and to the

rents and pro=ts thereof*


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Izzat-un-Nizza Begum v. Kunwar

Pratap Singh$5@5% LR 7 -6 ,@7

roperty sold sub:ect to two mortgages.

urchaser retained money to pay o3mortgages.

6fter sale) mortgages declared invalid.

0endor sued for the unpaid purchase

money.


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Held-

/n the sale of property sub:ect toencumbrances the vendor gets the price of hisinterest) whatever it may be.

6 covenant to pay the encumbrances isnothing more than a contract of indemnity.

When the encumbrances becomes invalid) thevendor has nothing to complain about. Hisindemnity is complete.

The notion that the purchaser is a trustee for

the amount left over after paying o3 anencumbrances and is liable to the vendee paybac9 the balance money is without foundation.


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6fter the purchase is complete) the vendorhas no claim to participate in any bene=t

which the purchaser may derive from thepurchase.

-f) however) the property is sold free fromencumbrances) the vendee retains thevendor’s money to pay o3 the encumbrance)

and hence) the vendee is an agent of thevendor and accountable to him for anysurplus.


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Right ,! "ection ## $%$b%

The buyer is entitled) unless he has improperlydeclined to accept delivery of the property) to acharge on the property) as against the sellerand all persons claiming under him) to the

e'tent of the seller(s interest in the property)for the amount of any purchase&money properlypaid by the buyer in anticipation of the deliveryand for interest on such amount* and) when he

properly declines to accept the delivery) alsofor the earnest $if any% and for the costs $if any%awarded to him of a suit to compel speci=cperformance of the contract or to obtain adecree for its rescission.


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The buyer is entitled to a charge on the

property) i.e. when he has paid thepurchase price and the seller hasn’t givenhim the document giving the purchaserownership.

"ometimes when the buyer has alreadygiven an advance on the property butwhen the seller comes for delivery) thebuyer might not have the full sum to pay

o3 the seller. This is improperly decliningto accept deliver. This sections says that)such a buyer is not entitled to a charge on

the property.


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When the seller and the buyer are notready $for e'.! when they are not readywith the documents% for the delivery) thissituation is 9nown as Aproperly declining ofdelivery’. -n this case and all other casese'cept for the one in the previous point)

the buyer is entitled to the charge. But when properly declined) he is also

entitled to the recovery of earnestmoney$ earnest money signi=es that

parties are in earnest or have made uptheir minds* represents a guarantee thatthe contract will be ful=lled% and all othercosts awarded in the suit of speci=cperformance.


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Thank You

buyer’s rights and liabilities

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