Price Spread Compensation Of Housing Transaction Contract

Added value compensation of housing transaction contract is a common dispute of housing transaction appeared occurred in juridical practice. However, this interest is the most difficult one to fully guarantee. It is mainly attributed to misunderstanding of the legal nature of added value, resulting in difference in calculating added value. According to Article 113 of Contract Law of People’s Republic of China, the amount of compensationfor losses shall be equal to the losses caused by the breach o f contract, including the interests receivable after the performance of the contract. Added value of housing refers to value-added benefits of the house brought by price adjustment of real estate market, including added value from housing market(such as “one room for two contracts”) and contract price and resale price of the house(resale interest). In academic circles, the legal nature of housing added value is described by three opinions: benefit of performance, benefit of fiduciary and acquirable benefit. Resale benefit of housing belongs to acquirable benefit, which is without dispute academically.. The writer believes that this part of added value belongs to acquirable benefit, as housing added value conforms with the composition of acquirable benefit, which is the benefit that based on the foundation that contract will be fully performed in the future and is received by the observant party. Compensation of acquirable benefit has three basic principles: complete compensation, proportional compensation, and judicial discretion.. Definitive rules such as fault offset, damage mitigation, and loss offset also need to be utilized to adjust acquirable benefit in order to take into account all factors that could exert influence on acquirable benefit.Determining price standards, the first principle to refer to is similarity, which means to choose a house with the same block, floor and type, or with the same floor and type and adjacent block, or within the same area. If there is no similar house to refer to, professional appraisal agency could be introduced to determine housing added value. The time point of loss recognition should be based on the benefit and request of the observant party and determined combined with actual situation. The determination of loss of the observant party should also take into account the performance of the observant party, the loss occurred to the house due to price ups and lows anticipated by the default party, and whether or not both parties have taken necessary measures to prevent further loss.