{"id":17072,"date":"2026-07-27T12:19:50","date_gmt":"2026-07-27T10:19:50","guid":{"rendered":"https:\/\/www.white-baos.com\/?p=17072"},"modified":"2026-07-27T12:19:55","modified_gmt":"2026-07-27T10:19:55","slug":"purchase-contract-termination-new-court-success","status":"publish","type":"post","link":"https:\/\/www.white-baos.com\/en\/purchase-contract-termination-new-court-success\/","title":{"rendered":"Purchase Contract Termination. New Court Success. Property Purchase in Spain."},"content":{"rendered":"\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\"><em><u>SUMMARY OF THE ARTICLE<\/u><\/em><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><em><u>1.- Purchase contract termination and Article 1504 of the Spanish Civil Code.<\/u><\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>In property transactions in Spain, a breach by one party does not automatically terminate the contract. The Civil Code requires the seller to formally notify the buyer of their intention to terminate before taking legal action. Without that prior step, any subsequent claim may lack sufficient legal foundation.<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em><u>2.- The case: claim for 19,500\u20ac without prior contract termination.<\/u><\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>A seller filed a judicial claim for the compensation agreed in the contract without having formally terminated the purchase agreement or formally demanded performance from our client. The deed of sale was never executed after disputes arose regarding the condition of the property.<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em><u>3.- The ruling: mutual disengagement and costs awarded against the seller.<\/u><\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>The court dismissed the claim in its entirety. Neither party had taken formal steps to terminate or enforce the contract. The judge applied the doctrine of mutual disengagement and awarded costs against the claimant.<\/em><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p class=\"wp-block-paragraph\">When a property transaction in Spain is not finalized as planned, financial claims between the parties are common. Who breached the contract?. What happens to the amounts already paid by the buyer?. A purchase contract termination has specific legal requirements that must be met before taking a dispute to court. In this week&#8217;s article, we discuss a recent <a href=\"https:\/\/www.white-baos.com\/en\/new-success-we-won-a-supreme-court-case-about-a-penalty-clause-on-a-purchase-contract-of-a-hotel-successful-court-decision-nets-client-700-000-modification-of-the-penalty\/\">court success<\/a> in which our firm obtained a favourable ruling for a client facing a claim of 19.500\u20ac. <a href=\"https:\/\/www.white-baos.com\/wp-content\/uploads\/2026\/07\/SENTENCIA-contract-termination-resolucion-1.pdf\">You can read the complete ruling by clicking HERE.<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong><u>The specialty of Article 1504 of the Spanish Civil Code.<\/u><\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">In property transactions, a breach by one party does not automatically terminate the contract. As we have discussed in <a href=\"https:\/\/www.white-baos.com\/en\/purchase-contract-resolution-or-termination-failure-to-pay-the-price-by-the-buyer-notary-request-legal-actions-and-advice\/\">previous articles<\/a>, the Spanish Civil Code establishes a specific mechanism for termination. The seller must formally notify the buyer \u2014 typically by means of a notarial requirement \u2014 of their intention to terminate the contract. Only after that notification, and if the buyer still fails to comply, does the judicial route become available to seek termination or its confirmation, and to claim the agreed compensation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Art. 1504 C.C. <em>&#8220;In the sale of immovable property, even if it has been stipulated that failure to pay the price within the agreed time shall automatically terminate the contract, the buyer may still pay after the term has expired, as long as no judicial or notarial demand has been made.&#8221;<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This prior step is not a mere formality. It is a legal requirement whose omission, as we shall see, can prove decisive in court.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong><u>The specific case. Claim for 19,500\u20ac. Penitential deposit.<\/u><\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Our client signed a private purchase agreement for a property, with a <a href=\"https:\/\/www.white-baos.com\/en\/the-importance-of-the-wording-on-a-purchase-and-sale-contract-penalty-clause-vs-arras-penitenciales-penitential-deposit\/\">penitential deposit (<em>\u201carras<\/em> <em>penitenciales\u201d<\/em>)<\/a> of 19,500\u20ac that was transferred into the Notary&#8217;s bank account. Subsequently, disputes arose between the parties regarding the condition of the property. Its urban planning status. The absence of an <a href=\"https:\/\/www.white-baos.com\/en\/certificate-of-habitability-its-importance-in-conveyancing\/\">occupation license\/certificate of habitability<\/a>. Construction defects. Etc, The deed of sale was never executed, and the Notary returned the deposited funds to our client.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The seller, without having formally terminated the contract or having formally demanded performance from our client in accordance with art. 1504 CC, filed a court claim for the 19.500\u20ac.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong><u>The ruling.<\/u><\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The judge noted that neither party had taken formal steps to terminate the contract. And the seller had not issued any formal demand under <a href=\"https:\/\/www.boe.es\/buscar\/act.php?id=BOE-A-1889-4763\">art. 1504 CC<\/a>, nor had he sought termination by any other means. The buyer, on the other hand, had simply recovered the funds deposited at the Notary without taking any action for breach by the seller. Both parties had, in effect, abandoned the transaction. One by recovering the money without further action. The other by selling the property to third parties a few months later.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The judge concluded that the failure of the transaction could not be attributed exclusively to either party. Applying the doctrine of \u201cmutual disengagement\u201d, the court dismissed the claim in its entirety and awarded costs against the claimant.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong><u>Conclusion.<\/u><\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A Purchase contract termination is not automatic. In the event of a contractual breach, the manner in which the parties pursue their claims \u2014 whether for performance or for termination and compensation \u2014 is essential. At White-Baos Lawyers, we specialise in property law and judicial claims arising from property transactions. If you are buying or selling a property in Spain and a dispute has arisen with the other party, do not hesitate to <a href=\"https:\/\/www.white-baos.com\/en\/contact-us\/\">contact us<\/a>. We will study your case and provide expert legal advice.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The information provided in this article is not intended to be legal advice but merely conveys information relating to legal issues.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Carlos Baos (Lawyer)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">White &amp; Baos.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Tel: +34 966 426 185<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">E-mail: <a href=\"mailto:info@white-baos.com\">info@white-baos.com<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">White &amp; Baos 2026 \u2013 All Rights Reserved.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<h1 class=\"wp-block-heading\">You may be interested in the following services and articles:<\/h1>\n\n\n\n<h2 class=\"wp-block-heading\"><a href=\"https:\/\/www.white-baos.com\/en\/termination-of-a-sale-contract-spain\/\">New Court Success. Termination of a sale contract. Our clients receive \u20ac69,500 as compensation.<\/a><\/h2>\n\n\n\n<h2 class=\"wp-block-heading\"><a href=\"https:\/\/www.white-baos.com\/en\/breach-of-contract-by-the-buyer-in-spain\/\">Legal advice on how to terminate a real estate sale and purchase, due to a breach of contract by the buyer. Failure to pay the price. Special requirements in Spain.<\/a><\/h2>\n\n\n\n<h2 class=\"wp-block-heading\"><a href=\"https:\/\/www.white-baos.com\/en\/initial-purchase-and-sales-agreements-spain\/\">The importance of getting expert legal advice when signing the documents and Initial purchase and sales agreements. Conveyancing. Reservation, deposit, private contract, etc. Expert legal advice.<\/a><\/h2>\n","protected":false},"excerpt":{"rendered":"<p>SUMMARY OF THE ARTICLE 1.- Purchase contract termination and Article 1504 of the Spanish Civil Code. In property transactions in Spain, a breach by one party does not automatically terminate the contract. The Civil Code requires the seller to formally notify the buyer of their intention to terminate before taking legal action. Without that prior [&#8230;]<\/p>\n<p><a class=\"btn btn-primary understrap-read-more-link\" href=\"https:\/\/www.white-baos.com\/en\/purchase-contract-termination-new-court-success\/\">Read More&#8230;<\/a><\/p>\n","protected":false},"author":2,"featured_media":17064,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[427],"tags":[],"class_list":["post-17072","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buying-property-in-spain"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Purchase contract termination. 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