Questions & Answers
Assistance with understanding the MOU rights and obligations
Could you kindly advise if it is correct to put in an MOU that I, as the seller will be penalized an amount equivalent to the deposit for not transferring on the expected date?
The MOU states that I would need to pay this to the buyer- also it states that the deposit cheque is refundable on the date of transfer- what does this mean?
Thanks
Hello there,
With reference to your inquiry, kindly note the following:
1. There is a legal principle stipulating that (The contract is the law of its parties), THUS, anything can be agreed upon, as long as it doesn't contradict with the Laws, Public orders or morals.
2. It is better for you, as the seller, to mention that you shall transfer on (xxx) date, and comply with that date. But in the event of non-compliance, you shall refund the deposit, in addition to an amount which is equivalent to the deposit (as per Law). But in such case the MOU (in its entirety) is deemed terminated, meaning that the deal is over.
3. If the Deposit Cheque is to be refunded to the buyer/purchaser, I guess this means that he shall pay the full price on the date of transfer (prior to refunding the check from you). But this makes no sense, as he is supposed to pay the deposit (which is the Cheque as per your inquiry), then pays the remainder upon transfer.
I do believe that the MOU in question needs serious intervention from a professional in order to save both parties' rights.
Kind regards.
