Document background
The Cancellation of Agreement to Sell is a crucial document used in Hong Kong when parties mutually agree to terminate an existing sale agreement. This document is typically required when circumstances change after the original agreement is signed but before completion, such as when financing falls through, due diligence reveals issues, or parties simply agree not to proceed with the transaction. The document must comply with Hong Kong's common law system and relevant ordinances, including the Contract and Rights of Third Parties Ordinance and, where applicable, the Conveyancing and Property Ordinance. It typically includes provisions for the return of deposits, mutual releases, cost allocations, and may address stamp duty implications for property transactions. The document serves to legally protect all parties by clearly documenting the termination terms and ensuring a clean break from the original agreement.
