Legal Construction of a Sale and Purchase Agreement in the Property Industry Based on the Good Faith Principle

Abstract

The agreements required to be executed in the real estate sector relate to land and buildings. Along with the modernization of building models and the division of land functions, the laws governing property industry contracts have also changed within the industry. A legal sale or debt arrangement is the payment system used to administer a land title agreement, which is governed by a process involving multiple parties and multiple payment systems. A frequent case of legal smuggling is the simultaneous execution of two contracts, particularly a sale and purchase agreement where the land serves as collateral and the underlying contract establishes a debt relationship. The disguised second agreement hardly reveals the intentions of the parties. Although the consequences of the original agreement do not concern them, they still have an interest in the outcome of the second disguised agreement. This is referred to as a "simulation agreement", and the existence of such an agreement gives rise to complications in the form of disputes and conflicts. As a result, the creditor is authorized to ignore the debtor's circumstances under the terms of the debt and credit agreement. To ascertain whether contractual good faith is an important component in the legal interpretation of sale and purchase agreements in the real estate industry, this study utilizes doctrinal legal research. To create legal certainty and prevent multiple interpretations, contracts that are grammatical article by article must demonstrate good faith.