Terminating a Preliminary Real Estate Agreement: When Is It Legal?

After signing a preliminary real estate purchase–sale agreement, many buyers or sellers start to question whether they truly want to proceed with the deal. While hesitation is natural, it’s important to understand that such agreements carry legal weight and oblige both parties to finalize the transaction within the agreed timeframe.

But when can such an agreement be legally terminated? Is a simple change of mind enough? Are there legal exceptions, and what are the potential financial consequences?

These questions were addressed by Andrius Lukašonokas, attorney at the law firm NOEWE LEGAL, in the national TV program “Labas vakaras, Lietuva” on LNK. According to the attorney, everything depends on what’s written in the agreement. Does it outline valid reasons for termination? Have the parties agreed on exceptions allowing one side to walk away without penalties? That’s why it’s essential to ensure that the preliminary agreement clearly defines the rights and obligations of both parties, including exit options – this can prevent costly disputes in the future.

Listen more in Lithuanian on LNK show “Good evening, Lithuania” from 18:15 min.