Noteworthy Spanish Supreme Court Ruling Voids Sale of Plot Which Did Not Meet Urban Planning Licensing and Permit Requirements

9 February 2010

A plot purchase agreement which stipulated licenses and permits needed for the construction and development of a specific business venture was declared null and void.

The Spanish Supreme Court issued a ruling in a scenario of both factual and legal interest; the plot sold did not meet the surface area conditions as specified in the purchase agreement which, furthermore, were urban planning requirements needed for the proposed objective – the construction and development of a specific business venture.

The truth, discovered after the sale of the plot, was that a small area of same belonged to a neighbouring lot. This implies deceitful conduct by the seller with the intention to elicit a bid and commence negotiations with the buyer and, likewise misrepresents the reality of the situation and the grounds for the sale, given that the lot was not zoned for construction.

The seller’s conduct was a manoeuvre which hid behind a shield of reticence to omit, hide and fail to inform- all instrumental in closing the sale.

In short, the law does not require a special intent to deceive during negotiations, but merely behaviour which, either actively or passively, induces the buyer to invalidly enter into an agreement.

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