In an urban renewal project an apartment owner received a smaller apartment than the other apartment owners. Firstly there was execution of an urban renewal contract and later a purchase agreement in which she bought the apartment from a company that leased it to her, with the first contract promising a larger apartment but it was subordinated to a purchase agreement to be signed later.
The Court held that the owner is not entitled to a larger apartment. When a contract refers to another contract and adopts its content, the other contract becomes part of the agreement between the parties. In addition, the interpretation of the contract may change due to the obligation of good faith in negotiations. Here, the obligation in the first contract is conditional and depends on the rights that the owner will receive under the purchase agreement. Hence, the obligation to give her a larger apartment in exchange for her old apartment is conditional on the fact that the old apartment will indeed become hers under the purchase agreement. In addition, there has not been any deliberate deception or conduct intended to harm her rights. Therefore, she is not entitled to a larger apartment.