Court Orders Specific Performance of House Sale at CNY 330,070
In a notable real estate dispute from Eastern China, a buyer successfully compelled a developer to complete the sale of an apartment at the originally agreed price. Mr. Hu had signed a housing order confirmation note in 2009 for a unit priced at 330,070 yuan, but the developer later refused to proceed unless the price was increased. After a protracted legal battle, both the trial court and the appellate court ruled that the confirmation note constituted a binding conditional contract, ordering specific performance in favor of the buyer.
The case arose in August 2009 when Mr. Hu signed a Housing Order Confirmation Note with Eastern China City Real Estate Development Co. for a 126.95-square-meter apartment. The note specified the unit number, a total price of 330,070 yuan (calculated at 2,600 yuan per square meter), and required a deposit of 2,000 yuan. An additional remark stated that the unit was undergoing cancellation procedures with the developer, and a formal sale contract would be signed after those procedures were completed. Mr. Hu paid the deposit the same day. In late 2010, the developer completed the cancellation procedures but then informed Mr. Hu that it would only sell the unit at a higher price. Mr. Hu sued for specific performance, demanding the sale go through at the original price, plus 3,000 yuan in late-delivery damages.
At trial, Mr. Hu submitted the confirmation note, the deposit receipt, evidence of the cancellation announcement published in a local newspaper, and a sample formal sale contract used by the developer for similar units. The developer denied the authenticity of the confirmation note and argued that it was merely an expression of interest, not a binding contract. The developer presented no counter-evidence. The trial court examined the note, which bore signatures from both Mr. Hu and a company representative, and found it consistent with the deposit receipt. The court also took judicial notice of the developer’s published cancellation notice. On this basis, the court deemed the confirmation note genuine and authentic.
The trial court held that the confirmation note contained the essential terms of a sale—the property’s location, size, and price—and that the parties had agreed to make the contract effective upon completion of the unit’s cancellation procedures. Once that condition was satisfied, the contract became binding. The court therefore ordered the developer to sell the apartment to Mr. Hu at 330,070 yuan and to assist with the registration of title. However, because the confirmation note did not specify a delivery date, the court rejected the claim for late-delivery damages. The developer appealed, arguing again that the note was not a contract and that the cancellation issue was irrelevant.
On appeal, the higher court affirmed the lower ruling. It reasoned that under Chinese contract law, a document can qualify as a contract if it clearly sets out the essential elements of the transaction and demonstrates the parties’ mutual intent. The confirmation note here identified the property, price, and payment terms, and the deposit payment reinforced the parties’ understanding. The court emphasized the principle of good faith, noting that the developer had already completed the cancellation and the unit remained unsold. Requiring the developer to honor the original price was consistent with the parties’ expectations and the purpose of the agreement. The developer’s appeal was therefore dismissed, and the original judgment was upheld.
This case highlights the enforceability of preliminary purchase documents in Chinese real estate transactions. When a document contains key terms such as price, property description, and a clear condition for finalization, courts may treat it as a binding contract. Developers cannot unilaterally demand a price increase after the condition is met. Buyers should retain all written communications and receipts to protect their interests. The judgment serves as a reminder that good faith and contractual certainty prevail, even in informal-looking agreements. Note, however, that each case turns on its specific facts and applicable law.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.