Sale Agreement Registration in India

A sales agreement describes the terms of a transaction relating to sales. These agreements are typically used for real estate and business assets. The sale agreement includes clauses regarding the time allowed for sale, the amount details and payment details, etc. that are necessary in order to conclude the sale agreement registration

Sale Agreement Registration in India 

We will discuss the term sales agreement, its basic elements, and the need to form a sales agreement in this article. We will also discuss making a sales agreement and how to conduct complex sales transactions.

Sales agreement

Sales agreements, also called sales contracts or sale deed registration, are legally bound contracts that deal with specific sales transactions. The contract is between two parties: the seller and the buyer. During a contract to sell something, a seller might be an individual or an organization or firm. You can be the buyer if you are an individual or an organization/firm interested in buying the item in question. In a sales agreement, goods or services are bought or sold.

The term ‘goods’ includes tangible items such as machines. Goods and services include the item as well as certain services related to the item, such as service, installation, etc.

A sales agreement differs from a bill of sale in the sense that the conditions in the agreement must be met in order for the deal to be considered final. Depending on the state, the sales agreement precedes the deed of sale, while in others, the sales agreement is enrolled and can be used as a deed of sale.


Essentials of a sales agreement

In a sales agreement, the following essential items need to be included:

  • Name, address, and phone number of the buyer and seller are basic information.
  • The name, address, and phone number of any co-signers.
  • A sale of some sort is taking place.
  • Date on which the agreement was initiated.
  • The agreement should also specify if any amount has already been deposited for the purpose of advancing the sale.
  • Specifying the dates by which the other details of the agreement will be completed.

The agreement should specify when the contract ends and when ownership is transferred.

Whenever a property is being sold, any defects must be disclosed and written in the agreement, and the language in which the inspection shall take place as well as whether the property may be used professionally should be specified.

Financial terms such as rate of interest, amount financed, sales commission, sales tax, and a time limit to return the funds should be clearly defined in financing sales contracts.

Need of a sales agreement

An individual may not be able to secure their venture without a sales agreement, or incidentally might be held responsible for something beyond their control. It is for this reason you should use a sales agreement any time you trade products that are more complex than simply transferring ownership. Assuming that you intend to get it done sometime not too far off or then again to transfer responsibility to another party, a sales agreement can assist in securing the parties to the contract or the business if the agreement is made upon delivery of the goods at a future date or if one party wishes to transfer liability to the other.

Certain safeguards are included in a standard sales agreement. Such as:

  • Vendor agrees to provide a specified number of merchandise and kinds of service, and buyer agrees to utilize specific labor and products.
  • The buyer agrees to make a purchase based on a particular course of events, and the merchant agrees to provide the labor and products by that date.
  • Both parties agree to address a specific cost for the product, and the seller agrees to accept that cost.
  • When one party violates the sales agreement, neither party has an exclusive right.

A sale agreement registration should include the following terms:

  • A sale agreement can be customized to fit the needs of the parties, but it should normally include the following provisions:
  • In the agreement, the name and basic information of the party who intends to buy a product or service will be included.
  • Name and basic information about the party intending to sell the particular product or service should be included in the contract.
  • There must be a clear statement of the goods or services for which the agreement is being signed.
  • Delivery information: This clause provides information about the delivery address, dates, and other details about the product or service.

Modification or alteration: If the parties in the future desire to change, alter, or amend the contract or any of its terms, they would have to follow the procedures outlined in this clause.

A sales agreement should contain a contingency clause that specifies how a mishap will be handled or how any contingencies will be handled. A clause like this is very important since there is a possibility that if anything agreed to does not happen or something outside the contract happens, then measures could be taken by either party. Here are some examples of contingent clauses:

What if the goods are not delivered on the agreed date or in the agreed condition or on the agreed place?

In the event that the buyer does not make the payment on the agreed date, then what are the seller’s options.

If a party has agreed to have the goods or services inspected on a given date, but the inspection does not take place on that date, then what is the additional time that will be given to make the inspection.


Defaulting provision:If either of the parties makes default in their contract then the remedy that the other party has is to be specified in this clause or provision.The parties agreed to inspect the goods or services delivered on a particular date, but the inspection does not occur that dayfied in this clause or provision.

Assignment:This clause specifies the procedure if a transfer of rights is available to either party to the contract and what formalities they need to complete before transferring such rights.The parties agreed to inspect the goods or services delivered on a particular date, but the inspection does not occur that says they need to complete before transferring such rights.

The Dea party has agreed to have the goods or services inspected on a given date, but the inspection does not take place on that dategarding the repayment of the amount deposited if there is any breach in the contract.

Ma party has agreed to have the goods or services inspected on a given date, but the inspection does not take place on that date

Buyer to pay the seller a certain amount and a specific method of payment: This clause specifies how the buyer will pay the seller. The parties agreed to inspect the goods or services delivered on a particular date, but the inspection does not occur that day payment is to be done to the seller.

Payment date:This clause specifies the date on which the payment is to be done or if the payment is to be done in instalments then this clause contains a particular table that specifies the dates and the amount that would be paid. The parties agreed to inspect the goods or services delivered on a particular date, but the inspection does not occur that day his clause contains a particular table that specifies the dates and the amount that would be paid.

The parties have agreed on a certain date for inspection of the goods or services delivered, and that day is not provided for inspection

Oa party has agreed to have the goods or services inspected on a given date, but the inspection does not take place on that dater of that particular product or service.

The parties agreed to inspect the goods or services delivered on a particular date, but the inspection does not occur that day

Warranty:This clause in the agreement clarifies that the conditions of the goods that need to be delivered to the buyer shall be of The parties agreed to inspect the goods or services delivered on a particular date, but the inspection does not occur that daygood quality and as per the condition that is agreed between the parties. The seller can give a warranty regarding the goods or services that are to be Goods or services to be delivered by the seller or buyer cannot be guaranteed.

Ea party has agreed to have the goods or services inspected on a given date, but the inspection does not take place on that date

In a sales agreement, there is a need for an advocate

Standard sales agreements can be used by the parties to make contracts, but the problem is that a standard sales agreement may not include all the clauses that the parties need to include in the agreement. A sales agreement should be reviewed by an advocate before being made or signed.

The following are some of the advantages of contacting an advocate while making the contract:

It is the duty of an advocate to ensure that all clauses that the parties solely desire in their agreement are included in the sales agreement if they have been appointed to do so. In addition to the standard clauses of a sales contract, an advocate will include personalized clauses as well. 

It is the advocate’s duty to ensure that the parties’ liabilities are limited. It is important to limit the liabilities before and after the transactions. By appointing an advocate to draft the sales agreement, these limitations can be ensured.

Both the buyer and the seller’s rights and liabilities should be protected by a sales agreement. Advocates protect both parties and ensure that the goods, services, and compensation are provided, etc. While making a contract, it shall be taken into account to protect the interests of both parties.

Statutory position of sales agreements

Registration Act, 1908

According to Section 17(2)(v) of Registration Act, 1908, “Any document other than those specified in sub-section(1A) that does not create, declare, assign, limit or extinguish any interest, right, title or right in immovable property of a value of one hundred rupees and upward”; rather, it creates a right to obtain a document that, when executed, creates, declares, assigns, limits or extinguishes that right, title or interest..” Sales agreement falls under the category of this Section of the Registration Act. This Section does not require the registration of a sales agreement, since registration or non registration makes little difference in rights, titles, or interests over immovable property.


The Real Estate Regulatory Authority (RERA) Act of 2016

In accordance with Section 13(1) of the RERA Act, a promoter cannot accept as an advance payment or an application fee a sum that exceeds ten percent of the price of the apartment, plot, or building, whichever is applicable, without first entering into a written agreement for sale with such person and registering the said agreement for sale, in accordance with the laws of the time.”.


Promoter duties are discussed in this section. They are:

The promoter must execute the sales agreement once the advance amount has been received from the prospective buyer.

Sales agreements must be registered before the appropriate authorities by the promoter.

A sales agreement’s legal standing

In The real estate developer argued in M/S Imperia Structures Limited v. Anil Patni and others (2020) that the date of registration of the project with the RERA shall be considered the date of allotment. The Supreme Court ruled that all the terms and conditions of the agreement such as construction plan and allotment date, etc. shall be binding on both the parties and they have to follow all the conditions specified in the agreement in a specified manner. 

According to the Court, the RERA Act states that neither party to the agreement can change, alter, or amend the agreement without the other party’s consent. Both the parties are obliged to follow the agreement.

The difference between a sales agreement and a bill of sale

A bill of sale differs from a sales agreement because:

A bill of sale is an agreement that transfers ownership from the seller to the buyer, while a sales agreement is an agreement containing clauses that pertain to the goods or services to be delivered.

A sales agreement specifies a detailed payment or warranty plan, while a bill of sale does not.

There are detailed and all necessary points in the sales agreement that give the parties full flexibility, while in the bill of sale, very few details are provided and the parties have limited flexibility.

  • Registration of sales agreements: documents needed
  • Sale deed/Index II
  • A 7/12 Extract copy is needed for the land sale agreement.
  • Certificate of the sale agreement or deed of sale of the flat.
  • In the case of flat registration, a maintenance receipt.
  • Buyer and seller’s PANs and AADHARs
  • Copy of PAN and AADHAR of two witnesses.
  • The buyer and seller must submit two passport-size photographs, etc. depending on the type of sale.
  • How to register a sales contract
  • The advocate drafts the sales agreement.
  • After the agreement has been drafted, it will be sent to the parties for their approval.


By signing the agreement, the parties will approve the draft, which will be compiled along with the documents required for registration and sent to the Office of Sub-registrar (SRO).


The registration lawyer will answer any questions you may have.

You must visit the Sub-Registrar’s office to get approval on the draft.

When the draft gets approved by the Sub-Registrar, sale agreement stamp duty should be paid online (click on the name of the UT or state if the sale agreement registration is to be registered in Delhi, Uttar Pradesh and Haryana respectively), and attach the stamp duty along with the challan documents.

The sale agreement registration in India becomes final upon execution and registration.

You can pick up the agreement at the Sub-Registrar’s office on the date of appointment.

  • TDS on sales contracts
  • TDS will be deducted at a rate of 1%.
  • The buyer is responsible for deducting the TDS, not the seller.
  • If the sale is made of goods or services of an amount less than 50,00,000 then there is no need to get the TDS deducted.
  • If the amount is to be paid in installments, then the TDS will get deducted on each installment.
  • Online registration of a sales agreement is possible

Above is an explanation of how to register a sales agreement. By paying the required stamp duty and providing the required documents, a person can apply to register a sales agreement online, but they must go to the Office of the Sub-Registrar to collect the registration. It is advisable to contact an advocate If you are transacting in a state other than Texas, he will guide you according to the state’s or the UT’s procedures.

A variety of alternatives to sales agreements

A sales agreement does not have to satisfy all the requirements of the parties. Other such agreements can be helpful for the parties depending on their needs. These include:

Purchase agreement for real estate

In the case of any real estate transaction, a real estate agreement would be more useful than a sales agreement.

The business purchase agreement

The business purchase agreement is better for clarifying the rights and responsibilities of both parties in the event that a business is transferred from seller to buyer, whether it is the entire business or just a part of it.

Contract of service

For transactions regarding any service or consultancy, a service agreement or Professional Service Agreement (PSA) would be a better choice to specify the rights and obligations of either party.

Promissory note

In the case of lending any amount of money where the lender has a right to take back the money at a given date, then the lender can ask the other party to sign a promissory note.


In a sales agreement, both parties will benefit from the agreement in complex transactions involving goods such as machines, technologies, etc, or services such as consultancy or rendering of any service. Forming a sales agreement is advantageous for both parties, since it covers all the facets of transactions that would protect either parties’ rights and protect them from any losses that might occur if no sales agreement is formed and signed.

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