In this case the agreement labelled as the "settlement agreement" was concluded. Under the agreement, a son undertook to pay to his parents the amount of CZK 1,850,000 following to the transfer of the real estate property to him for a lower purchase price than was the market price (his parents intended to spend the rest of their life there). Due to mutual disputes, the parents left the real estate property and moved to a leased property. Subsequently concluded agreement didn’t meet requirements for the settlement agreement as it was not clear what was disputable between the parties and it looked more like acknowledgement of a debt. However, as an acknowledgement of a debt, the agreement was not sufficiently certain (it only generally stated the acknowledgement of a debt to the extent of its reason and the amount; however, such reason was not specified).
The Court of the First Instance accepted the action of the parents regarding payment of the amount stated in the agreement, whilst the Appellate Court decided otherwise due to the fact that it considered the agreement invalid. The Constitutional Court changed its decision and inclined to the validity of the agreement due to the fact that from the circumstances of the case it was unquestionably derivable what the parties wanted to achieve by the agreement and for which reason. The Constitutional Court admonished the Appellate Court as the Appellate Court did not stick to the principle of agreements validity priority and it only formalistically decided on the invalidity.
(Decision of the Constitutional Court from 11 July 2017, file no. IV. ÚS 3168/16)