| By nature, man has the motivation to pursue the highest possible return out of a transaction. Therefore, when the market situation changes swiftly in an extraordinary scale (e. g. the price doubled in less than 6 months), both the real estate developers and the individual house owners will tend to breach the first, lower-priced sale contract and deliver the subject matter to the second buyer who promises a higher price. Although a majority of the public considers such behavior to be unfair and finds that the first buyer is a victim of the "greedy market economy", present Chinese law takes a generous or liberal attitude toward the transaction between the seller and the second buyer, only giving the first buyer very limited remedy.As the speculation of real estate flourished, double-sale practices went rampant in China during the past decades. Consequently, buyers have to face great uncertainty in the transaction and the mutual trust between the market players that is crucial for the smooth operation of the market, reduces significantly. In this context, this paper argues strongly for the introduction of a disgorgement rule to protect the first buyer, which imposes higher obligation on the seller. He should not only pay the compensatory damages, but also disgorge the profits obtained from breach of the contract. Furthermore, even after the newly enacted Property Law has vested the real estate register with ultimate evidential effect for the ownership, it is still important to be aware of the complexity of the registration system and its defects, as well as recognize the ownership acquired during the time when the registration is still imperfect. In the event that the second buyer does not have enough justification to trust the register solely and that his behavior does not fulfill the requirement of good faith, the first buyer should be offered an equity-style remedy and be allowed to keep the subject matter he bought. Lastly, tort liability can also be a possible alternative, when taking the historical and present general public opinion into account. |
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