Consultations ( Impossible to fulfil a purchase contract)
Dear Lawyer,
I bought a property off plan a few years ago . The developer has now finished and sent me a summons and request to go to the notary office to sign the purchase deed and pay the rest of the price. The problem is that today it is very difficult to get a finance and a mortgage. Also when we signed the purchase contract, my wife was working and she is now unemployed. Also, unfortunately no bank will lend us the money that we need . Can we ask to the developer and seller to pay us our money back, and not force us to buy. All this due to of our current economic situation?
Answer.
Dear reader, thank you very much for your legal consultation.
This is what is legally called the rebus sic stantibus rule or things thus standing. That means, the possibility to get out of a contract due to a change in the circumstances.
It should be noted that in principle, the general rule is that contracts must be fulfilled as agreed. This is according to Article 1091 of the Spanish Civil Code:
” The obligations arising from contracts have the force of law between the contracting parties , and must be fulfilled as per its wording”
The rebus sic stantibus rule could only apply when there is an unpredictable change in the situation and circumstances that existed at the time of signing the contract. And they must be of such importance, that it makes it very difficult, expensive, or even impossible to meet and fulfil the contract.
Spanish Supreme Court.
As stated on the Spanish Supreme Court order number 820/2013 of 17th January:
.-the mentioned rule rebus sic stantibus can be applied to property purchases, but it must be done cautiously and only in exceptional cases.
.- In this judgment the Supreme Court said that it could apply to cases of inability to obtain finance for buyers. As the deep and prolonged effects of the crisis in Spain are evident and notorious.
However, amongst other requirements, the court understands that to apply this rule, the contract should have been signed before the crisis. And the circumstances should have changed dramatically and unpredictably.
The Supreme Court clarified that this does not mean that the economic crisis itself is cause to allow buyers not to continue with their purchases, as that would encourage opportunistic contract breaches, and even be an incentive for purchase contract defaults, distorting the existing property purchase contracts. Rather, the circumstances of each case must be checked, and it will need to be proved that the requirements outlined above are met, so that you can claim for the money back and termination of the contract .
If you have signed a purchase, letting, or any other kind of contract, and you cannot fulfill it, if it is Impossible to fulfil a purchase contract, please contact us and we will advise you appropriately .
The information provided in this article is not intended to be legal advice, but merely conveys general information related to legal issues.
Carlos Baos (Lawyer)
Spanish Law firm solicitor attorney barrister.
Alicante, Denia, Costa Blanca Marina Alta
White & Baos 2014 – All rights reserved
