The court indicated when the terms of the preliminary agreement are binding
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An example was the consideration of a dispute over an apartment in Dagestan
If, upon concluding a preliminary purchase and sale agreement, the buyer pays in full for the product or service, the seller must fulfill his obligations. The Supreme Court came to this conclusion after considering the case of the sale of an apartment in the city of Izberbash (Republic of Dagestan).
As the court found, citizen Badaev (surnames changed) entered into a preliminary agreement for the purchase and sale of an apartment with citizen Dzhokharov, the cost of which was estimated by the parties at 2.6 million rubles. At the same time, Dzhokharov paid the entire amount in advance, as was stated in the contract.
To transfer the apartment, the men had to conclude the main contract, but Badaev, despite numerous requests from the buyer, did not do this. The agreement was not signed either before the moment specified in the document or after it.
Tired of waiting, the buyer filed a lawsuit to recognize the preliminary agreement as the main one, and, accordingly, recognition of his ownership of the apartment. However, the Izberbash City Court rejected the claim.
The servants of Themis decided that the agreement cannot be recognized as the main one – it only stipulates the obligation to conclude such an agreement in the future. Meanwhile, none of the parties sent a proposal to conclude this agreement. Dzhokharov was also disappointed in the appellate and cassation instances.
The Supreme Court did not agree with the opinion of colleagues from lower authorities. The court’s ruling states that in fact the claim is not about recognizing the preliminary agreement as the main one, but about imposing on the defendant the obligation to conclude the main purchase and sale agreement. In addition, an agreement that stipulates the payment of money before the transfer of property should be qualified as a purchase and sale agreement with a condition for advance payment. Badaev did not fulfill this condition, therefore the court decisions were canceled, the case was sent for a new trial, taking into account the position of the Supreme Court.
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