In August 2009 Mr Zhang signed a contract (fi rst contract) to transfer his small apartment to Mr Li for the price of RMB 500,000 yuan. Mr Li paid the amount immediately after the conclusion of the contract but did not have it registered with the authority for real estate registration. Knowing that Mr Zhang had sold the apartment to Mr Li, Mr Cao offered to buy the apartment for a higher price of RMB 550,000 yuan. For the purpose of getting more money Mr Zhang concluded another contract (second contract) to transfer the apartment to Mr Cao and received the full payment from Mr Cao. Then they went to the authority for real estate registration and registered the second contract. Having completed the registration of the second contract, Mr Zhang went to Mr Li to return the RMB 500,000 yuan as paid previously. Mr Li did not want to accept the money but requested to hand over the apartment but Mr Zhang refused. Mr Li therefore fi led a lawsuit against Mr Zhang, requesting the court to issue an order to declare the invalidity of the second contract and confi rming his lawful ownership of the apartment. Required: Answer the following questions in accordance with the relevant provisions of the Property Law of China, and give your reasons for your answer:
(b) State how the court will deal with Mr Li’s claim; (4 marks)
参考答案：
In accordance with Article I of the Property Law, the creation, modifi cation, assignment and termination of rights in immovables shall become effective once duly registered; property rights shall not take effect without registration. Furthermore, Article AE of the Property Law provides that a contract to create, modify, assign and terminate rights in immovables shall take effect upon conclusion of the contract, unless otherwise provided for by law or agreed in the contract. In the present case the contract between Mr Zhang and Mr Cao came into effect upon its conclusion under the above-mentioned provisions of law. Furthermore, although the second contract was signed later than the fi rst contract, it was duly registered with the authority for real estate registration. The ownership to the apartment should belong to Mr Cao, while Mr Li should not hold the ownership of the apartment. Therefore, Mr Li’s request to declare the invalidity of the second contract should be dismissed by the court.
