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This research paper examines the en banc decision of the Supreme Court, 2003Da45267, decided on May 25, 2006, with a critical view.
At first, the Court approved that if the original seller in the sales contracts for each unit of an apartment building with individual buyers becomes financially insolvent, and assigns its rights on the contracts as well as building construction to the guarantee including a housing cooperative, and the guarantee resumes building construction through the succession procedure of the construction, the sales contracts between the original parties, the seller and the potential buyers through their purchase guarantee agreements, would be implicitly avoided because these parties have mutually agreed on avoidance of the contracts.
I disagree on the Court's reasoning which regards such "implicit intent" of the parties to avoid the sales contracts as "mutual consents" between them to terminate the contracts under the above-mentioned circumstances.
Such an interpretation of the parties' intent is beyond the statutory meaning of intent.
Second, the Court also held that when the sales contracts had been terminated, avoidance of the contracts would be affected only in the future, not retrospectively in the past, since tearing down the buildings, which have been constructed as the performance of the contracts, would be socially and economically detrimental to our communities.
However, such grounds of this holding is not persuasive. Unlike this reasoning, I would rather argue that legal obligations between the original contracting parties will be retrospectively terminated in case of avoidance of the contracts. Since the land, on which the building is built, is still owned by the original seller, even though avoidance of the sales contracts in units affects the validity of the contracts retrospectively, the seller does not need to demolish its building, but rather looks for new purchasers for the building.