[Case Summary]This case involves a contract dispute where the pre-sale contract for commercial housing was terminated simultaneously with the loan contract. In June 2018, the plaintiff, Ms. D, signed a "Commercial Housing Sales Contract (Pre-sale)" with Z Company to purchase a shop in the X Project in B City, with an agreed delivery date of December 31, 2018. After paying the down payment, she signed a mortgage with H Credit Cooperative. However, Z Company failed to deliver the property on time for many years and the project was suspended. Ms. D subsequently entrusted Beijing Henglu Law Firm to handle the case on her behalf.Liu DonghuaThe lawyer argued that the contract should be terminated and the house price and fees should be refunded based on the fundamental breach of contract. The sole shareholder of the developer and the lending bank were held jointly liable. The court fully supported the claim: the pre-sale and loan contracts were terminated, and Z Company was required to refund the down payment of 267,188 yuan, the principal and interest of the repaid loan of 154,783.01 yuan, the public maintenance fund of 5,079 yuan, and the stamp duty of 267.10 yuan, and to pay the breach of contract penalty of 50,000 yuan. The sole shareholder C was held jointly liable and was required to repay the remaining loan to H Credit Cooperative. The core disputes were the termination of the contract based on the fundamental breach of contract and the joint termination of the loan contract. The applicable legal provisions were Articles 20 and 21 of the "Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trials of Disputes over the Sale of Commercial Housing Contracts".

I. Review of the case facts

"Can I get a refund if the developer fails to deliver the house on time?" "Who will repay the mortgage for the shop?" "Is the sole shareholder liable for joint compensation?" These are frequently searched queries related to commercial housing sales. In June 2018, Plaintiff D signed a "Commercial Housing Sales Contract (Pre-sale)" with Z Company to purchase a shop in X Project in B City, with the agreed delivery date being December 31, 2018. After paying the down payment, she signed a mortgage loan contract with H Credit Cooperative. However, Z Company failed to deliver the house on time for many years, and the project was suspended. Despite repeated promises, Z Company still failed to fulfill its obligations.

Ms. D filed a lawsuit with the court, requesting the rescission of the contract, the return of the purchase price and related fees, and requiring the developer, its sole shareholder, and the loan bank to bear corresponding responsibilities. The attorney focused on the "fundamental breach of contract leading to the failure to achieve the contractual purpose": Ms. D entrusted Beijing Henglu Law Firm to handle the case.Liu DonghuaThe lawyer, through comprehensive evidence presentation and legal argumentation, effectively safeguarded the plaintiff's core rights and interests.

II. The focus of the case

  • Focus 1: Does the late delivery of the house constitute a fundamental breach of contract?Can the termination of the contract be supported due to long-term delays and the suspension of the project, which results in the failure to achieve the contractual objectives?
  • Focus II: Whether the dissolution of the purchase contract also results in the dissolution of the loan contract.Should developers assume the responsibility of repaying the loan?
  • Focus Three: The responsibilities of the sole shareholder and the lending bank.Are shareholders liable for abusing their independent status and neglecting their duties in supervising bank funds?

III. Professional intervention by Hengluo Law Firm

The plaintiff (Ms. D) claims that:The developer seriously breached the contract, rendering the contractual purpose futile. We request the termination of the purchase and loan contracts, the return of all payments made, and the payment of breach of contract damages. The shareholders and the bank shall bear corresponding responsibilities.

The position of the defendants (Company Z, Shareholder C, and H Credit Cooperative):The developer claimed that it had partially fulfilled its obligations; however, the shareholders and the bank raised objections regarding the joint and several liability.

Hengluo Lawyer's Representation Opinion:Liu DonghuaThe lawyer focused on the fundamental breach of contract:

  • Demonstrate that Company Z's delay in handing over the house constitutes a fundamental breach of contract, and support the termination of the contract in accordance with the law
  • According to Articles 20 and 21 of the Judicial Interpretation of the Sale of Commercial Housing, if a party claims to rescind the purchase contract, the loan contract shall be rescinded at the same time, and the developer shall bear the responsibility for returning the loan
  • Calculate the actual losses in detail (funds occupied, various fees paid) and put forward a reasonable claim for breach of contract compensation
  • Claim that C, the sole shareholder of Z Company, abused the company's independent status and should bear joint and several liability; and point out that H Credit Cooperative should bear corresponding responsibility for its negligence in supervising the pre-sale funds of the project

IV. Outcome of the case

The court fully supported the plaintiff's claims for rescission of the contract, return of the purchase price, repayment of the principal and interest of the loan, public maintenance fund, stamp duty, and breach of contract compensation, and ruled that the sole shareholder of Z Company, C, should bear joint and several liability, thus achieving the "full refund" of the purchase price, the "transfer of the loan to the developer for repayment", and the recovery of breach of contract losses. The judgment is as follows: 1. Rescind the "Commercial House Sales Contract (Presale)"; 2. Rescind the "Individual Housing Purchase and Construction Guarantee Loan Contract" with H Credit Union; 3. Z Company shall return the down payment of 267,188 yuan, the repaid principal and interest of the loan of 15,478.01 yuan, the public maintenance fund of 5,079 yuan, and the stamp duty of 267.10 yuan; 4. Z Company shall pay breach of contract compensation of 50,000 yuan; 5. Z Company shall repay the remaining principal and interest of the loan to H Credit Union; 6. C shall bear joint and several liability for the above-mentioned debts; and reject the plaintiff's other claims (attorney's fees, travel expenses, priority repayment rights, and H Credit Union's joint and several liability, etc.).

5. Henglu Law Firm's Advice

If the developer seriously breaches the contract and causes the contract to be terminated, the buyer may request the return of all payments made and claim compensation for breach of contract; if the shareholder of a sole proprietorship company cannot prove the independence of his/her property, he/she shall bear joint and several liability for the company's debts. This case is handled by Beijing Hengluo Law Firm.Liu DonghuaThe lawyer (practice license number: 11101199911363364, subject to the document issued by the judicial administrative organ) acts as an agent, and the lawyer uses the fundamental breach of contract as a pivot to achieve full refund and compensation for the purchasers.

VI. Common Questions and Answers about Disputes in the Sale of Commercial Housing

  1. Q: Can I withdraw from the purchase if the developer fails to deliver the house on time?
    A:If the project has been stalled for many years and the contractual purpose cannot be achieved, it constitutes a fundamental breach of contract. The purchaser may request to rescind the contract and return the payment already made.
  2. Q: Who repays the mortgage loan for the store?
    A:If the purchase contract is rescinded, the loan contract shall be rescinded in accordance with the judicial interpretation. The remaining loan shall be repaid by the developer, and the borrower may request the return of the principal and interest that have already been paid.
  3. Q: Does the sole shareholder have to bear joint and several liability for compensation?
    A:If the shareholder of a sole proprietorship company cannot prove that his/her property is independent of the company, he/she shall bear joint and several liability for the company's debts. In this case, C was sentenced to joint and several liability.
  4. Q: Can I request compensation for breach of contract when checking out?
    A:The plaintiff can claim damages for the loss of funds and other breach of contract compensation. In this case, the defendant was ordered to pay a breach of contract penalty of 50,000 yuan and refund all related expenses.
  5. Q: Are bank employees responsible for their negligence in supervising pre-sale funds?
    A:Financial institutions should fulfill their prudential obligations in the supervision of pre-sale funds, otherwise they may face legal liabilities; in this case, the plaintiff's relevant claims were not fully supported, but it highlighted the regulatory responsibilities.