When a contract is signed, especially in real estate, we tend to think that everything is settled and that from that moment on there is only to arrive serenely at the deed. But reality does not always run smoothly: unforeseen events, delays, financial problems or personal situations can complicate things. This is when two fundamental concepts of civil law come into the picture: termination and rescission of the contract. Two instruments that allow an agreement to be legally dissolved, but which arise from very different logics and conditions.

Properly understanding the difference between these two institutions is not just an exercise for insiders: it is useful and concrete information for those who buy or sell homes, for those who sign a preliminary agreement and then find themselves having to call it into question. And knowing when you can actually get out of a contract, without serious consequences, can save you from hasty choices or more serious legal problems.

When the contract no longer holds: termination

Termination of a contract occurs when, due to unforeseen causes, theagreement can no longer be continued. In the real estate world, this often happens when one of the parties does not fulfill what was promised. The buyer does not pay on time, or the seller does not deliver the property free of liens, or building abuses emerge that make the sale impossible. These are all situations in which those who have fulfilled the covenants can legitimately demand that the contract be terminated.

But termination does not apply only to cases of non-performance. It can also be invoked when unforeseeable events arise that make it impossible to complete the contract. Think, for example, of a natural disaster that seriously damages the property before delivery, or a regulatory measure that blocks the possibility of transferring ownership.

In some cases, termination occurs as of right, that is, automatically, without the need to go through a judge. In other cases, it is necessary to go to court to obtain a ruling. It is important, therefore, when entering into a contract, to clearly stipulate the causes that may trigger automatic termination in order to avoid future litigation.

When the contract is unbalanced at the start: termination

Different is the case of rescission, which does not concern what happens after the signing, but the very moment the contract is signed. Rescission occurs when one realizes that the agreement was, from the very beginning, vitiated by a serious imbalance between the parties. A classic example is when a person signs in extreme need or under psychological pressure. If the other party takes advantage of this to obtain very advantageous terms, then one is faced with a rescindable contract.

Here again, in the real estate context, there is no shortage of cases. Think of those who, for urgent economic reasons, sell off their homes at a price far below the real value, without a real possibility of bargaining. Or those who are induced to sign a preliminary agreement with severely penalizing clauses, driven by haste or a state of emergency.

Getting a contract terminated always requires court proceedings. The judge will have to assess whether there is an actual imbalance and whether there were conditions that limited the freedom to bargain. It is not enough to say “I regretted it” or “I didn’t understand correctly.” It is necessary to show that, at the time of signing, there were obvious unequal conditions and that one of the two parties acted with malice, bad faith, or taking advantage of the situation.

Termination or rescission? What really changes

The result is the same: dissolve the contract. But the way to get there changes completely. Termination starts with something that happens after the signing: a default, an unforeseen event, an obstacle that has arisen. Termination, on the other hand, is based on what happened before, during the formation of the contract.

In addition, the consequences can be different. With termination, penalties under the contract often apply, and the injured party can seek compensation. With termination, on the other hand, the goal is to put the parties back in the condition they were in before signing. This involves the return of any sums already paid, but it is not a given that financial damages will also be awarded.

Those involved in problematic buying and selling must therefore carefully consider which instrument is best suited to their situation. It does not always make sense to act impulsively. Sometimes it is more useful to seek an out-of-court resolution, perhaps with the mediation of an experienced real estate agency.

Ideas & Real Estate: concrete support when the contract wobbles

Not all buying and selling goes as one would expect. Sometimes difficulties emerge after the signing of a preliminary, sometimes already during negotiations. It is at these times that having a partner like Idee & Immobili by your side can make all the difference. The agency, with its experience in the field and a network of legal and technical advisors, knows how to guide people even in the most delicate steps. Not only in the choice of the property, but also in contract management, risk prevention and, if necessary, the evaluation of the most suitable legal avenues.