Legal Updates

Sellers of an apartment cannot be forced into an agreement when they explicitly state that only a “signed agreement” will bind them

January 20, 2020
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Apartment sellers withdrew from the transaction at the last moment, after a date for signing had already been set, and decided to sell the apartment to others.
The Court dismissed the claim and held that the potential purchasers were not entitled to compensation as no binding agreement was entered into and the sellers acted in good faith. In the event that parties negotiate with intention to reach a final agreement and with the agreement that until it is signed, the drafts are not binding, the draft as a stand-alone document is almost irrelevant. Here, the sellers withdrew from the transaction after a trust crisis event with the potential purchasers under circumstances that did not constitute bad faith. In addition, the final draft, which was passed by the seller's attorney, stated in each of its pages: "This document is for negotiation purposes only and is not binding on the parties until after it is signed by all parties." Therefore, the sellers are not to be forced into agreement they did not sign.