The balance between prospective buyers and sellers in contemporary promise of sale agreements : an analysis of jurisprudence

Abstract

This work aims to examine the balance between prospective buyers and sellers in contemporary promise of sale agreements with the main focus being on the cases where the final deed of sale would eventually fall through. The practice in Malta is that the buyer pays a deposit when signing the promise of sale. Upon examination of the relevant current jurisprudence one can see that the most prevalent practice is that of the parties agreeing on a ‘forfeitable’ deposit. When seller defaults of one’s obligation to appear for the final deed, the buyer may file an action requesting the court to force the buyer to appear on the final deed, or if the final sale cannot be completed, sue for damages. On the other hand, when the buyer fails to appear for the final deed and the deposit contracted is a ‘forfeitable’ one, jurisprudence is quite intricate. The court has provided us with three conflicting positions as to what the seller should do in order to appropriate the deposit. In the fourth chapter the Maltese position is compared with the Italian one. A conspicuous finding is that the deposit in Italy may even take the form of a ‘caparra confimratoria’, a balanced and equitable concept which unfortunately is not specifically found in the Maltese legal system. The study ultimately concludes that legislative intervention is necessary to address certain imbalances while providing the Maltese legal system with greater certainty on promise of sales.