When a Bengaluru buyer finally sat down to read the fifty page agreement her builder had handed her, the imbalance was almost comic. If she was late on a payment, she owed steep interest and risked losing her flat within a month. If the builder was late handing over the flat, he had pages of reasons that excused him and years of grace before she could do anything. It read less like a contract between two parties and more like a set of rules written by one. That instinct was correct, and, importantly, the law increasingly agrees: one-sided clauses like these are not the last word.

The short answer. Builder-buyer agreements are usually drafted entirely by the developer, so they often tilt heavily in the builder's favour. But the Supreme Court has repeatedly held that one-sided clauses in such agreements are an unfair trade practice under consumer protection law, and that a buyer is not bound by them simply because they signed. Forfeiture of your money on cancellation has been capped at around ten percent of the base price. The trade off to understand: you may have to sign a standard agreement to buy, but signing does not sign away your rights, and unfair clauses can be challenged.

Why are builder-buyer agreements often one-sided?

Builder-buyer agreements are one-sided largely because of who writes them. The developer drafts the contract, and the buyer, eager for the home and with little leverage, is usually presented with it on a take it or leave it basis. As the Supreme Court has observed, these agreements are often drafted solely by developers and leave buyers with little bargaining power, making them inherently unequal. The result is a document that carefully protects the builder and quietly exposes the buyer.

This imbalance shows up in predictable places: what happens when the buyer is late, what happens when the builder is late, and what happens if either side wants to cancel. In each of these, a one-sided agreement gives the builder generous latitude and the buyer harsh consequences. Recognising that the standard agreement is written for the builder's benefit is the first step; the second is knowing that the law does not simply let those terms stand.

It is worth being realistic about the position you are in when you sign. For most buyers there is little practical scope to rewrite a large developer's standard agreement clause by clause, and refusing to sign often means losing the flat. That reality is exactly why the courts have stepped in: because the imbalance is structural, not a matter of a buyer failing to negotiate. Knowing this changes how you read the document, from a contract you fully agreed to into one whose harshest terms you can still question later.

What has the Supreme Court said about one-sided clauses?

The Supreme Court has been clear and consistent: one-sided clauses in builder-buyer agreements are an unfair trade practice under consumer protection law, and they cannot be used to bind a buyer. According to a summary of the Court's position, rulings such as Pioneer Urban Land and Infrastructure versus Govindan Raghavan and Ireo Grace Realtech versus Abhishek Khanna decried one-sided builder-buyer contracts as unfair trade practices, and a developer cannot compel buyers to be bound by such terms.

The Court has pointed directly at the asymmetry. In these cases it noted how a builder's right to delay possession was broadly defined while the buyer faced heavy penalties for cancellation or delay. The significance for an ordinary buyer is large: even if a one-sided clause sits in the agreement you signed, the courts and consumer forums have shown they will not automatically enforce it against you. The signed page is not the end of the story.

What are the common one-sided clauses to watch for?

Certain clauses recur in one-sided agreements, and knowing them helps you read your contract with clear eyes. Watch for asymmetry in delay: a high rate of interest or penalty if you pay late, set against a token or vaguely worded compensation if the builder delivers late. Watch for broad, builder friendly definitions of when the builder is excused from delay, alongside narrow, demanding conditions before you can act on the builder's default.

Also watch for clauses letting the builder unilaterally change the layout, the area, the common areas or the specifications without your consent, clauses allowing arbitrary termination or forfeiture, and charges that appear later without having been clearly disclosed. None of these are automatically enforceable just because they are printed in the agreement. But spotting them lets you raise them, negotiate where you can, and know precisely which terms you may later have grounds to challenge.

Is there a cap on what a builder can forfeit if you cancel?

Yes. Where a buyer cancels, the amount a builder can forfeit as earnest money has been limited by the Supreme Court to around ten percent of the base price of the flat. In the Godrej Projects Development versus Anil Karlekar case, the Court rejected a builder's attempt to retain twenty percent and held the forfeiture should be capped at ten percent of the basic sale price, aligning with the consumer protection framework and RERA that limit such forfeiture.

This matters because forfeiture clauses are among the harshest in many agreements, sometimes threatening to keep a fifth or more of what you paid if you walk away. The cap tells you that a clause allowing the builder to swallow a large chunk of your money is not something the law simply blesses. If you are ever in a cancellation situation and a builder points to a punishing forfeiture clause, that clause is exactly the kind the courts have trimmed back.

One-sided versus fair clauses: how do you spot the difference?

The test is symmetry. A fair clause treats the same situation similarly for both sides; a one-sided clause does not. This table shows the pattern.

Run your agreement through this lens. Wherever the same event is treated far more harshly for you than for the builder, you are likely looking at a one-sided clause, and the case law suggests such clauses do not automatically bind you. The table is a quick way to find the terms worth questioning.

What should a buyer do about a one-sided agreement?

You are not powerless in front of a standard agreement. Work through these steps.

1. Read the full agreement, not just the price and payment pages, before signing.
2. Flag asymmetric clauses on delay, cancellation, forfeiture and unilateral changes.
3. Try to negotiate the worst clauses, or get fairer terms in writing where you can.
4. Know that one-sided clauses have been held to be an unfair trade practice.
5. Keep every document and communication, which you may need for any complaint.
6. Use RERA and consumer forums as the routes to challenge unfair terms.
7. Take legal advice on the agreement before you commit significant money.

These steps sit alongside your other buyer protections. Our guide on RERA Section 18 remedies for delayed possession covers your rights when a builder is late, and our guide on verifying a builder's track record and RERA complaints helps you avoid the developers most likely to lean on one-sided terms.

Does signing the agreement mean you have waived your rights?

No. This is the single most important thing for a buyer to understand. The Supreme Court has held that a developer cannot compel buyers to be bound by one-sided contractual terms, which means your signature on a standard agreement does not automatically validate every clause in it. Unfair, one-sided terms have been treated as an unfair trade practice regardless of the fact that the buyer signed.

That does not mean you should sign carelessly and rely on the courts to save you; challenging a clause takes time, effort and often litigation, and prevention is far better. But it does mean you are not trapped by a punishing clause simply because it was in the document you had to sign to buy your home. Read carefully, negotiate what you can, keep your records, and know that the law provides a route to contest terms that are genuinely unfair.

Frequently asked questions

Are one-sided clauses in a builder-buyer agreement legal?

The Supreme Court has repeatedly held that one-sided clauses in builder-buyer agreements are an unfair trade practice under consumer protection law, and that a developer cannot compel buyers to be bound by them. So while such clauses appear in many agreements, they are not automatically enforceable, and buyers can challenge them through consumer forums and RERA.

How much can a builder forfeit if I cancel my booking?

The Supreme Court, in the Godrej Projects case, limited forfeiture of earnest money on cancellation to around ten percent of the basic sale price, rejecting a builder's attempt to keep twenty percent. This aligns with the Consumer Protection Act and RERA framework. A clause letting a builder forfeit far more than this is the kind courts have cut back.

Does signing the agreement waive my rights?

No. Your signature does not automatically validate every clause. The Supreme Court has held that a developer cannot compel buyers to be bound by one-sided terms, so unfair clauses can still be challenged even after you sign. That said, challenging clauses takes time and effort, so it is far better to read carefully and negotiate before committing.

What are the most common one-sided clauses to watch for?

Watch for heavy penalties on buyer delay set against weak compensation for builder delay, broadly worded excuses for the builder's own delays, arbitrary termination or forfeiture, clauses letting the builder change the layout or area without your consent, and charges disclosed only later. Wherever the same situation is treated far more harshly for you than the builder, question the clause.

Last updated 14 July 2026. PropNewz Team.