Legal Updates

A purchaser of apartment that does not sign documents despite contractual requirement to do so materially breaches the agreement

April 10, 2020

Purchasers of second-hand apartment refused to sign a waiver of claims against the contractor as part of a legal proceeding conducted with the seller and as a result prevented the seller from receiving compensation from the contractor.
The Court accepted the claim and held that the purchasers must sign the waiver and compensate for breaching the contract with the seller. The interpretation of an agreement should, first and foremost, be one that aligns with the intention of the parties and must also be reasonable and logical. Here, the purchasers have undertaken in the purchase agreement to sign “any request, or statement, or power of attorney, promissory note, or any other document required to execute the transaction referred to in this agreement” but contended that they indeed agreed that seller should be entitled to the compensation but they should not be obligated to sign a waiver to a third party because of it. The purchase agreement expressly stated that the compensation to be ordered as part of a legal proceeding that the seller had conducted against the contractor would belong to the seller and be transferred to her as an integral part of the transaction. Therefore, there was no justification to limit the clause in the agreement only to actions designated to ensure the transfer of ownership of the apartment. Because this was a material clause in the transaction, the purchasers must also compensate the seller for breach of contract.