What is the difference between ‘Earnest Money’ and ‘Advance’ in Agreement to Sell?
The seller can forfeit the ‘earnest money’ if the purchaser defaults in completing the sale. Whereas, the ‘advance money’ cannot be forfeited even if the purchaser defaults in completing the sale. The earnest money stands as the purchaser’s guarantee for his performance of the contract. The advance cannot be treated as guarantee for completion of contract.