Simon Says: Can an owner refuse to sell after signing a contract?

Published
10/26/2017 by

This is the thirty-fifth in a weekly series of legal advice provided in a short and entertaining story format.

 

每周轻松有趣法律常識故事系列 - 第35篇

 

 

Keywords: Contract, Purchase and Sale Agreement of Property, Deposit, Breach of Contract Term

 

关键词:合同,房产买卖协议,押金,违反合同条款

 

 

Can an owner refuse to sell after signing a contract?

 

西门说法:房产买卖合同签订后卖家还能拒绝交易吗?

 

Jack and Jill are a newly-wed couple living in Hangzhou, China. Jack’s father decided to give them 5 million to choose a flat as a wedding gift.
Jack和Jill是一对新婚夫妻,现居杭州。Jack的父亲决定拿出500万为俩人购置婚房,作为结婚礼物。

 

After searching for a month, they found their perfect cozy little flat to live in. They signed a sale and purchase agreementwith the owner Alex, and paid him 0.5 million Yuan as initial deposit, and started decorating the house while waiting for completion of title registration. The fancy decoration costed the young couple another 0.5 million.

 

找了一个月的房子后,他们相中了一套完美又温馨的小型公寓。于是与卖方Alex签订了买卖协议,并支付了50万的首次定金,接着夫妻俩一边着手装修房子的事情,一边等着房产所有权登记的完成。小夫妻俩又花了50万将房子精装修了一下。

 

Half a year later, after the decoration was completed, they called Alex on change of the registration of title of the property and, of course, how to pay him the balance as well.

 

半年后,房子装修完毕,他们打电话给Alex说更改房产所有权登记以及如何支付尾款的事情。

 

However, at that time, as Hangzhou’s property market was in a boom, the price of the flat has also risen by 1 million. Alex, knowing that the flat now values 20% more, did not want to sell it at 5 million anymore.

 

然而,当时杭州的房地产行业正发展的如火如荼,他们买的那套房子短短半年就已经涨了100万了。Alex深谙那套房子已经增值了至少 20%,所有当然不再情愿以500万售出。

 

“I’ll give you guys a deal. We all know that it costs 6 million now, and there is no way I am selling it at 1 million less. How about you pay me the 5 million as promised, and I’ll keep the deposit as well. This way you guys get it 0.5 million cheaper.” Alex bargained.

 

Alex讨价还价的说道:“我要跟你们做笔交易。大家都知道这套房子已经市值600万了,要我以少一百万的价格卖出去简直是天方夜谭。不如你们还是按照当初说好的支付我500万,但定金不予退回。这样你们就等于节省了50万。”

 

“We signed the contract at 5 million, so 5 million is 5 million. You signed the contract at your own will and you have to be honest.” The couple argued.

 

夫妻俩也是据理力争:“我们双方签的合同上就是500万,说一不二。而且签这个合同是你自愿的,你不能出尔反尔。”

 

Alex, “Then I am not going to go through the deal!”

 

Alex又说:“你们要这样的话,这房子我就不卖了!”

 Simon Says - Episode 35: Can an owner refuse to sell after signing a contract?

 

Prof Simon Says:

西门教授说法:

 

Jack and Jill need not pay Alex an extra 0.5 million. Alex, being a seller, is in breach of the contract terms and shall have to compensate Jack and Jill one million if he decides not to perform the contract as signed. There is always a term in such agreement stating that if a seller decides not to go through the agreement, the seller need refund two times of the deposit the purchaser paid. Jack and Jill are de facto occupying the property as well as they have decorated the property already and it would be very difficult to vacate them without a court order. A court order may be granted on the condition that Alex has to compensate the time and efforts of Jack and Jill for the decoration of the property as well and it would be difficult to quantify their loss. Alex may suffer further loss to compensate the couple. Other than contractual rights, Jack and Jill have statutory right to claim for compensation under China’s Contract Law too.

 

Jack和Jill无需支付Alex50万的额外费用。Alex作为卖方,违背了合同条款,如若他不遵守签署合同,则应赔偿夫妻二人100万的损失费。这类买卖协议中一般都有一则条款这样规定:若果卖方不履行协议内容,其应向买方退还两倍定金金额。Jack和Jill已经装修过这套房子了,对其有房产占有权,没有法庭的判决,是不能将他们从这里赶出去的。法院可能根据当下情况作出判决:Alex必须赔偿Jack和Jill装修房子的时间费用和精力费用,而且他们的损失很难量化。Alex光是赔偿这对夫妻就有可能会受到进一步损失。除合同本身的权利外,Jack和Jill还享有《中国合同法》规定的要求赔偿的权利。

 

China’s Contract Law
Article 107 If a party fails to perform its obligations under a contract, or its performance fails to satisfy the terms of the contract, it shall bear the liabilities for breach of contract such as to continue to perform its obligations, to take remedial measures, or to compensate for losses.

 

Article 108 Where one party express explicitly or indicates by its conduct that it will not perform its obligations under a contract, the other party may demand it to bear the liability for the breach of contract before the expiry of the performance period.

 

Article 113 Where a party fails to perform its obligations under the contract or its performance fails to conform to the agreement and cause losses to the other party, the amount of compensation for losses shall be equal to the losses caused by the breach of contract, including the interests receivable after the performance of the contract, provided not exceeding the probable lossescaused by the breach of contract which has been foreseen or ought to be foreseen when the party in breach concludes the contract.

 

The business operator who commits default activities in providing to the consumer any goods or services shall be liable for paying compensation for damages in accordance with the Law of the People's Republic of China on Protection of Consumer Rights and Interests.

 

《中华人民共和国合同法》
第一百零七条当事人一方不履行合同义务或者履行合同义务不符合约定的,应当承担继续履行、采取补救措施或者赔偿损失等违约责任。
第一百零八条当事人一方明确表示或者以自己的行为表明不履行合同义务的,对方可以在履行期限届满之前要求其承担违约责任。
第一百一十三条 当事人一方不履行合同义务或者履行合同义务不符合约定,给对方造成损失的,损失赔偿额应当相当于因违约所造成的损失,包括合同履行后可以获得的利益,但不得超过违反合同一方订立合同时预见到或者应当预见到的因违反合同可能造成的损失。
经营者对消费者提供商品或者服务有欺诈行为的,依照《中华人民共和国消费者权益保护法》的规定承担损害赔偿责任。

 

 

For more about this or to contact Professor Simon Choi at www.acmeardent.comsimonhkchoi@163.com, +86 13823677853 or by WeChat: simonhkchoi. 

 

ACME Ardent's Simon Choi WeChat QR Code

 

 

Simon Choi

About the Author: Professor Simon Choi

Prof Simon Choi, solicitor and linguist, is an international lawyer, qualified to practise law in England & Wales and in Hong Kong, China. Simon graduated from law schools of the Peking University, the University of London and the University of Hong Kong respectively, with an in-depth knowledge of Chinese laws and common laws and with more than 20 years experience in China practice and international trade, investment, finance, merger & acquisition. He is an adjunct professor of laws at the Zhongnan University of Economics and Law. Simon is the founding partner of Acme Ardent and can be reached at simonhkchoi@163.com or +86 13823677853.

 

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