“Humne toh Bayana de diya tha, deal pakki thi” — token money changes hands on a handshake all the time in Pakistani property deals. But is that Bayana actually enforceable if the seller backs out, or the buyer fails to pay the balance?

⚖️ What is Bayana?

Bayana (earnest/token money) is an advance sum paid by a buyer to a seller to confirm intent to purchase property, usually recorded in an Agreement to Sell (Iqrarnama). It is governed by the general principles of the Contract Act, 1872, and remedies for breach flow from the Specific Relief Act, 1877.

📋 Is a Verbal Bayana Legally Valid?

A purely verbal Bayana arrangement is extremely difficult to enforce — courts require credible evidence of the agreement’s terms: the price, the property description, and the payment. Without a written Iqrarnama, a dispute often comes down to conflicting oral testimony, which rarely favours the buyer.

✅ Practical example: If a buyer pays Rs. 2 million as Bayana with only a verbal promise, and the seller later denies receiving any money, the buyer has almost no way to prove the transaction without a receipt or written agreement — always insist on a signed Iqrarnama and a receipt for every payment.

🚩 What Happens If the Seller Backs Out?

• If a written Agreement to Sell exists, the buyer can file a suit for Specific Performance, asking the court to compel the seller to complete the sale.
• Alternatively, the buyer can seek a refund of Bayana with damages for breach of contract.
• Courts in Pakistan have consistently held that a seller cannot unilaterally cancel a valid Agreement to Sell simply because property prices have risen.

🚩 What Happens If the Buyer Fails to Pay the Balance?

• If the Iqrarnama contains a forfeiture clause, the seller may be entitled to retain the Bayana as compensation.
• Without a forfeiture clause, the seller must prove actual loss to justify retaining the token money.
• Time-bound clauses (“balance payable within 90 days”) are strictly interpreted by courts — missing the deadline can forfeit the buyer’s rights.

💡 Practical Tips

• Always execute a written, signed, and witnessed Agreement to Sell — never rely on a verbal Bayana.
• Clearly state the forfeiture/refund terms in case either party defaults.
• Record the exact property details (survey number, size, location) to avoid disputes over identity of the property.
• Keep bank transfer records or signed receipts — cash payments without documentation are a common source of Bayana fraud.
• Set a clear timeline for the balance payment and registration of the sale deed.

Need Legal Assistance?

HSJ Legal, led by Advocate Hina Saleem Jessani, High Court Advocate in Karachi, drafts Agreements to Sell and represents clients in Bayana and property disputes across Pakistan. Contact us at https://hsjlegal.co/contact/.