Under normal circumstances, if the seller meets up with all the parameters during the entire transaction and the purchaser fails to pay the balance of the proceed on time, then the purchaser is liable to pay the seller interest on the outstanding amount. The interest is calculated according to the ‘contract rate’ that is mentioned on the first page of the contract. The norm is generally 4 percent above the base rate of a high street bank. This rate is on the higher side and does not encourage the buyer not to cause any delay. Anything above the 4 per cent is considered as exorbitant. If the parties have forgotten to write the contract rate, the Standard condition defines it in accordance with the Law Society’s interest rate that is enforced from time to time. The seller’s attorney must take utmost care where a sale has a corresponding purchase. The attorney for the seller must ensure that the contract rate in the purchase contract should not be higher than the contract rate in the sale contract. If the seller receives lesser amount than what he has to pay and also if he has to pay a higher interest than what he has received, then he will be out of pocket.
