A Study on Preliminary Contract- A Case Study of Real Estate Negotiation Deposits Transaction

Autor: Kuan-Lin Chen, 陳冠霖
Rok vydání: 2019
Druh dokumentu: 學位論文 ; thesis
Popis: 107
This paper is a study on the preliminary contract system in Taiwan. Using methods of collecting practical judgements and academic literature, we analyze and generalize the problems of the preliminary contract in Taiwan. Then, we introduce the opinions on preliminary contract in the United Kingdom and the United States. Using comparative method as the foundation, we try to offer suggestions to our preliminary contract system. In real estate transactions in Taiwan, the real estate negotiation deposits money contract that is popular between the buyer, seller, and broker constantly causes the controversy of forming preliminary or independent contract between both the buyer and seller in court specific cases due to the drafting of contract provision. In this paper, we look into the contract based on the conclusions above, study real estate negotiation deposits money contract in actual case, and propose the theories of this paper, hoping to truly reflect the real meaning of both the buyer and seller while balancing the interests between the buyer, seller, and broker to lower the legal risks of real estate negotiation deposits money contract, in order to promote real estate negotiation deposits money contract. The fundamental controversy of preliminary contract is the question of what the effect of preliminary contract is. The practice and traditional theories in Taiwan both show that it has the effect of the parties agree to be bound and to enter into the formal contract. However, the theory decreases the differential benefit between preliminary and formal contract, resulting in the violation of the scope of damage compensation of preliminary contract, including performance interest. Considering the legal systems in the United Kingdom and the United States, our preliminary contract obviously lacks the “agreement to negotiate” type preliminary contract that exists in the United States. Also, to allow preliminary and formal contract to have differential benefits, the effect of preliminary contract should be asking the other party to negotiate, and both parties of preliminary contract should have “good faith in negotiation,” where the scope of damage compensation should be limited to reliance interest. As for how to determine whether or not a contract is “preliminary contract,” the matter should be divided into “negotiation” and “preliminary contract,” “preliminary contract” and “formal contract” for discussion. Considering the opinions of the laws of the United States, the difference between “negotiation”and “preliminary contract” can be determined with the following three indexes: “whether written contract is signed,” “whether it leads to the reliance of the other party,” “whether agreement in part of the elements of the contract is made.” As for the difference between “preliminary contract” and “ formal contract,” since of the complexity of modern transactions is incomparable to classic contracts, we should increase the essential elements of the contract instead of adhering to the essential elements of traditional contracts. For the actual operation, actual characteristics of individual contract should be studied before making appropriate judgements. In this paper, the real estate negotiation deposits is our study object. According to the three indexes mentioned above, both the buying and selling parties of the real estate negotiation deposits transaction should be at a stage where negotiation is done. With modern real estate transactions becoming more and more complex, solely agreeing on the price and object of transaction is inadequate for the recognition of established formal contract, and therefore both the buyer and seller should establish preliminary contract. The true meaning of both the buyer and seller paying or receiving deposits money should have the standing of prevail contracts. If neither party is willing to officially sign afterwards, then deposits money can be waived or paid double and freed from the binding of contract. To achieve the purpose of deposits money payment between both parties and avoid the unnecessary lawsuit loss, the characteristic of deposits money should be interpreted as “earnest money for rescind a contract.” Since both the buyer and seller established preliminary contract at this time and that the effect of preliminary contract is different from formal contract, if both the buyer and seller accept the deposits money but do not officially sign the formal contract, the broker still cannot receive renumeration from neither the buyer nor the seller. This paper offers the suggestions above, providing the government references while issuing the agreement model for real estate negotiation deposits in hopes of clarifying the legal relationship of real estate negotiation deposits, making the legal relationship between the parties involved clear, and at the same time meeting the demands of the involved parties, avoiding unnecessary burdens to the court, and finally achieving the expected functions of real estate negotiation deposits .
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