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The Short Sale Contract is a specialized legal instrument used in Pakistan when a property or security needs to be sold for less than its outstanding obligations. This document becomes necessary in situations where the seller cannot fulfill their full financial obligations and seeks to mitigate losses through a negotiated sale. The contract must comply with Pakistani legal requirements, including the Contract Act 1872, Securities Act 2015, and relevant SECP regulations. It typically includes comprehensive details about the asset being sold, payment terms, execution process, and necessary regulatory approvals. The Short Sale Contract serves as a crucial tool for financial institutions, property owners, and investors in managing distressed assets while ensuring legal compliance and protection for all parties involved.

1. Parties: Identifies and provides full details of all parties involved in the short sale transaction, including the seller, buyer, and any intermediaries

2. Background: Contextual information explaining the purpose and circumstances of the short sale

3. Definitions: Defines key terms used throughout the agreement for clarity and precision

4. Subject Matter of Sale: Details of the property or securities being sold, including precise identification and quantity

5. Purchase Price: Specifies the agreed purchase price and payment terms

6. Execution Process: Step-by-step process of how the short sale will be executed, including timing and delivery mechanisms

7. Representations and Warranties: Statements of fact and assurances from both parties regarding their capacity and authority to enter into the agreement

8. Conditions Precedent: Conditions that must be satisfied before the short sale can be executed

9. Closing Mechanism: Detailed procedure for completing the transaction, including documentation requirements

10. Risk and Liability: Allocation of risks and responsibilities between the parties

11. Default and Remedies: Consequences of breach and available remedies to the non-defaulting party

12. Governing Law and Jurisdiction: Specifies Pakistani law as governing law and determines jurisdiction for dispute resolution