The sale and purchase of houses is a major matter in people's daily lives. If a buyer discovers shortly after signing the contract that the property is included in the demolition plan, with compensation far exceeding the selling price, can the seller back out? Recently, the Haizhu District People's Court in Guangzhou handled such a housing sales contract dispute.

In November 2024, Mr. Li entrusted an intermediary to sell the property under his name. At the end of the same month, through the intermediary's mediation, Mr. Li and the buyer, Ms. Wang, signed a house purchase and sale contract for a total price of 1.68 million yuan (approximately 26,000 yuan/㎡).

After signing the contract, Ms. Wang made the down payment and applied for the loan as agreed, successfully completed the property transfer, and moved in after obtaining the property certificate. Unexpectedly, only in the past few days, Mr. Li learned that the house had been included in the demolition scope, with a compensation standard of 60000 yuan/square meter. He filed a lawsuit against Ms. Wang after being refused to terminate the contract.

Mr. Li stated that due to long-term remote care for seriously ill relatives and handling funerals, he had no time to pay attention to the demolition news. If he knew at the time of signing the contract that the demolition was imminent, it would be impossible to sell it. Therefore, there was a significant misunderstanding in his intention and he requested the revocation of the contract.

Ms. Wang believes that her purchase of the house is for her own living needs, and she has been repeatedly looking at the property for six months, not for speculation. 1.68 million yuan is in line with the market conditions of the same location at the time of signing the contract. The transaction is a genuine expression of intention by both parties, and the sales contract is legal and valid.

The first instance judgment of Haizhu District People's Court in Guangzhou rejected all of Mr. Li's claims.

Neither party appealed. The judgment has come into effect.

Major misunderstanding refers to the erroneous understanding of the nature of the contract, the variety, specifications, quality, price, and other aspects that the actor has when a civil legal act occurs.

In this case, Mr. Li did not have any misconceptions about the location, area, ownership, and other basic information of the house. His decision to sell the house was based on his own living needs. At the time of contract signing, there was no clear notification from the administrative department to include the houses involved in the case in the scope of demolition, and there were no abnormal fluctuations in housing prices in the same area. Mr. Li's advocacy of 'never selling if aware of imminent demolition' is actually a regret for the future loss of income, rather than a cognitive bias towards the current nature of the house. After signing the contract, the housing prices skyrocketed due to the demolition compensation plan, which is a new fact that occurred after the completion of the contract. It cannot be inferred that there was a misunderstanding at the time of signing the contract. As a commodity, housing prices are subject to fluctuations due to factors such as policies and the market, which is a normal commercial risk. Mr. Li, as a person with full capacity for civil conduct, should be aware of the transaction risks. Once the contract is signed, both parties should abide by the principle of good faith in performance. However, if they later renege on the contract due to excessive profits from demolition, it would be unfounded and contrary to the spirit of the contract.

The judge reminded that "major misunderstanding" is not a regret medicine. The fluctuation of housing prices caused by policy and market changes after signing the contract is a normal commercial change, which should be borne by both parties in the transaction and does not constitute a reason for revoking the contract. The buying and selling of houses involves significant property rights and interests, and both parties should make careful decisions and keep their promises.

This article is transferred from the WeChat official account "Shandong High Court". Thank you!