Case Law Database

Case Study: Confirmation of Contract Invalidity for Non-Villager Buying Rural Housing

This case involves a dispute regarding the confirmation of contract invalidity over a rural property. Shi (a non-villager) paid Zhang (a villager) to purchase "surplus" resettlement housing built on collective land, effectively using Zhang's name to buy the property. Years later, Zhang sued to declare the transaction invalid. The court ruled that although the parties signed a "Sales Agreement," the true legal relationship was a "name-borrowing" purchase. Since Shi was not a member of the collective economic organization, she was ineligible to acquire rights to housing on collective land. Thus, the contract violated mandatory legal provisions and was deemed invalid. Shi was ordered to return the house, with financial disputes to be settled separately,,.