And what happens if the party obligated to deliver the item (the property) is unable to do so due to force majeure? Is there a breach of contract? No, because the absence of the clause does not imply non-delivery, as the party was not expressly stated otherwise.
SANTO DOMINGO.- Reyna Echenique, a lawyer and long-time real estate advisor, understands that in the price increases that properties have experienced and that have sparked complaints from their buyers, each party has its own reality.
He calls on sellers, buyers, and real estate agents not to let the process "dehumanize us " and to face the facts with business maturity, helping and contributing to the good of the entire industry.
“What is fair must be given, taking into account the realities of both parties and the sector. It is a latent and evident reality that there is a commercial transaction between both parties that must always be based on good faith. Some construction companies have stated that if they do not implement the increase, they will go bankrupt, and if they go bankrupt, the project will fail, and if it fails, the delivery will not take place,” Echenique explained when consulted by El Inmobiliario, a digital newspaper.
The experienced lawyer referred to the issue of when construction companies do not include clauses about possible increases and inflation skyrockets, as is happening now.
“It is a very broad topic and we must not lose sight of Common Law, as expressed in our civil code in article 1134, which states: ‘Legally formed agreements have the force of law for those who have made them. They cannot be revoked except by their mutual consent, or for the causes authorized by law. They must be carried out in good faith.’”.
And it adds: “And 1135 says that ‘Conventions are binding not only to what is expressed in them, but also to all the consequences that equity, usage or law give to the obligation according to its nature.’”.
The lawyer explains that “although it is true that the contract did not include a clause regarding the price increase, it is no less true that the agreement formed, that is, the contract, was based on the good faith of the parties, that both parties are obligated to each other to do or deliver the thing, one to deliver the property and the other to pay the price.”.
And what happens if the party obligated to deliver the item (the property) is unable to do so due to force majeure? Is there a breach of contract? No, because the absence of the clause does not imply non-delivery, as the party was not expressly stated otherwise.
Echenique recalled the principle enshrined in the Dominican Constitution in article 40, paragraph 15: "No one can be forced to do what the law does not command, nor prevented from doing what the law does not prohibit," implying that what is not prohibited is permitted.
He reiterated that in negotiations between construction companies and clients, it is important to take into account good faith, and if the party that promised to build at a certain price cannot do so because they feel unable to do so due to a cause not attributable to them, and the other party cannot or does not want to pay, the law gives them the power to withdraw by mutual consent and return the funds.
"Let's recall the final clause added to each contract: 'For anything not covered in this contract, the parties refer to Common Law.' And what is Common Law? Our laws and our Constitution. Good faith must continue to prevail here. It will be up to the judges of the Supreme Court of Justice to establish jurisprudence based on these precedents.".
He cited the types of contracts involved in the sale of a property, which are used according to the needs of the parties. These include the Promise of Sale Contract or the Conditional Sale Contract, the Sale with Unpaid Seller's Right of First Refusal , the Sale with Exchange Contract, and the Definitive or Sales Contract.
The CEO of the Echenique Group believes that many construction companies work ethically and transparently, although others hide behind the cloud of price increases to conceal their lack of budget, their lack of contingency planning, and their informality.
