When is a deposit agreement (“contrato de arras”) void? Is it valid if it is signed by the estate agent and not by the seller?

Question

José Manuel Alburquerque · Accepted Answer

A deposit agreement is void in the same cases as any other contract, for example if one of the parties has not consented or if it breaches a rule that cannot be contracted out of. It can be annulled if it was signed because of a significant mistake, deceit or intimidation, or if the seller sold their family home without the consent of their spouse or stable partner (in a “pareja estable”, the Catalan stable partnership). It is not void because it was not signed before a notary or because the down payment is high or low. If the estate agent signs it without the seller's express authorisation, in principle the seller is not bound unless they later approve it, which is called ratifying it. If the seller does not ratify it, you can recover what you paid and claim damages from the agency. When it is void or can be annulled Two situations must be distinguished: It is void, that is, it has no effect from the outset, if one of the parties has not consented, if it is impossible to tell which flat is being sold or for what price, if it breaches a rule that cannot be contracted out of or if it is a sham concealing something else. It can be annulled, at the request of the injured party, if that party signed because of a significant and excusable mistake, deceit or intimidation. A typical example of deceit is the seller concealing relevant information about the flat, which Catalan law requires the seller to disclose before signing. The time limit for applying is, in general, four years. The seller's spouse or stable partner can also apply for annulment if the seller sold the family home without their consent. If you are buying as a private individual from a business, such as a developer, unfair terms are treated as not included and the rest of the contract remains valid. In principle, a withdrawal deposit (“arras penitenciales”) that applies equally to both parties and is clearly worded is not unfair. The contract is not made void by the fact that it was not signed before a notary, that the down payment is high or low or that, for a flat in Catalonia, it cites the article of the Spanish Civil Code (“Código civil”) on deposits in the rest of Spain. Nor is it void because the flat has defects, because that is a separate matter, that of latent defects. If the estate agent signs it An estate agent instructed to find a buyer cannot, for that reason alone, sign the deposit agreement on the seller's behalf. To commit the seller to selling, it needs the seller's express authorisation. If it has it, the contract binds the seller. Ask to see it before signing and have it recorded in the contract. If the agent does not have it: In principle, the seller is not bound, unless they ratify it, orally, in writing or by their conduct, for example by collecting the down payment and keeping it. You can ask the seller to say whether they ratify it within a reasonable period that you specify. If they do not reply, they are deemed not to ratify it. Without ratification, you cannot force the seller to sell, but you can recover what you paid. The agency that exceeded its authority is liable to you for damages if you acted in good faith. The safest course is for all the owners to sign, even if remotely or by electronic signature. If only one of them signs, only that owner is bound and cannot hand over the whole flat to you. In the rest of Spain the result is similar, because the Spanish Civil Code also requires an express mandate to sell and the seller is only bound if they ratify what the agency did.