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        Case ID :

        1996 (7) TMI 585 - HC - Indian Laws

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        Limited negotiation authority does not permit an attorney to bind an owner by executing a sale agreement. Authority limited to negotiating the sale of immovable property does not include power to execute an agreement for sale or otherwise bind the owner. ...
                        Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                          Provisions expressly mentioned in the judgment/order text.

                              Limited negotiation authority does not permit an attorney to bind an owner by executing a sale agreement.

                              Authority limited to negotiating the sale of immovable property does not include power to execute an agreement for sale or otherwise bind the owner. Negotiation was confined to discussion, bargaining, and arranging proposed terms, while completion of the bargain required express authority to dispose of the property. On that construction, the attorney lacked authority to enter into a sale agreement, and such agreement could not found a claim for specific performance against the owner. The stated ratio is that a mere negotiation clause is insufficient to create contractual authority to transfer property.




                              Issues: Whether a power of attorney clause authorising the attorney only to negotiate for the sale of immovable property also empowered him to enter into an agreement for sale and bind the owner.

                              Analysis: The authority conferred by the instrument was confined to management of the property and to negotiating with prospective purchasers for the best available price. Negotiation was held to mean discussion, bargaining, and arranging the terms of a proposed sale, not the completion of the bargain or execution of an agreement for sale. A person can transfer only if competent to contract and authorised to dispose of the property, and the attorney had no such authority here.

                              Conclusion: The attorney had no authority to enter into an agreement for sale of the owner's property, and the agreement could not support a claim for specific performance against the owner.

                              Final Conclusion: The injunction restraining the appellants from dealing with the property was set aside, and the appeal succeeded.

                              Ratio Decidendi: An authority merely to negotiate for the sale of property does not include authority to execute an agreement for sale or otherwise bind the owner to transfer the property.


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                              ActsIncome Tax
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