Real Estate Advertising And Contract Law

What is real estate advertising and what is the legal nature? Real estate advertising is a type of commercial advertising. According to the provisions of China’s ‘Contract Law’, commercial advertisements are invitations to offer. An invitation to offer is a sign that you want others to make an offer to yourself, and does not constitute a contract. An offer is a sign that you want to enter into a contract with another person. When the offer is promised by the other party, the content constitutes the contract.

The general content of real estate advertising does not constitute an offer, but if its content meets one of the following conditions, it is converted into contract content: when the content of the advertisement is written into the commercial house sales contract and becomes part of the contract. And according to the ‘Contract Law’ and the relevant provisions of the judicial interpretation of the People’s Supreme Court, the advertising content that are not included in the commercial house sales contract, if its content specifically determines, and has a significant impact on the conclusion of the contract and the determination of the house price, the content also constitutes an offer and is part of the contract as promised by the buyer.

Apart from general contract, real estate false advertising is also creating a problem and generally has the following conditions: first, false planning in the future, planning and design of the community that has not yet been approved by the government, and the content of the advertising is inconsistent with the planned design after the government approves.

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Second, design planning changes after the advertising campaign, which general states the community planning and design related to the advertising content has been changed. Finally, false description of the house is also a main factor. The description of the house is where the purchaser gain trust but when the actual delivery finds that some of the expressions in the advertisement are inconsistent with the actual situation, it will create the legal risk of false description and false advertisement in real estate advertisement and precautions III.

Determination and investigation of legal responsibilities for the advertising behaviors other than those applicable to Article 3 of the “Explanation of Several Issues Concerning the Application of Laws in the Trial of Commercial Housing Contracts”, are treated differently according to the specific situation. Such as, legal advertisement descriptions that only add a slightly exaggerated language for attractiveness, even if the description is not completely consistent with reality, will generally be regarded as a legitimate promotion means. For example, the exaggeration of the ‘golden lot’ is a term not so specific and clear, which could create misunderstand to this kind of advertising for general buyers, so the advertising supervision department and the court will not identify it as a false advertisement. Another example circumstances is false descriptions and false advertisements for those invitations that have not been identified as an offer and are not included in the contract.

Even though it has not formed a contract, it doesn’t mean that they can arbitrarily exaggerate the words. If the false description in the advertisement misleads the purchaser during the sale and purchase process, creating a major misunderstanding of the subject matter, price, nature and other factors of the transaction. The purchaser may request the court to change or withdraw from forming contract. According to the provisions of Article 54 of the Contract Law. The court is likely to support the signed purchase and sale contract. On this basis, according to Article 42 of the Contract Law, the developer also needs to bear the corresponding responsibility for break off contract. In addition, if the description of the house and related facilities is clearly separated from the facts, deliberately drop the explanations of important matters such as quality, environment and price, then the real estate advertisement is likely to be identified as a false advertisement.

At this point, developers and advertisers may need to bear the corresponding civil, administrative and even criminal responsibilities. According to Article 67 of the People’s Supreme Procuratorate and the Ministry of Public Security on the Prosecution Standards for Economic Crime Cases, false real estate advertisements that involve huge amounts of money, is easier to approach the criminal conviction standard than other categories of advertising. At last, the advertisement content of the contract between the buyer and the seller is not binding, but if the buyer and the seller have made a special agreement on a written contract, and include relevant content in the contract as a clause, then according to the relevant provisions of the contract law, the agreement will become part of the contract and will be binding on both parties.

Through the above case and description, it is clear that the purchase advertisement is not binding in principle, but when the advertisement content is clearly written into the contract or specifically determined content that have a significant impact on house price, it can be regarded as the content of the contract and has legal effect. If the developer fails to deliver the house according to the description, the purchaser can request the court to ask the developer to bear the liability for the breach of contract. Not only that, but also bring administrative and criminal responsibility to the developer when the advertising content is overstated and constitute a false advertisement.