According to the Supreme Court, a failure to keep one’s promise to give a property on the basis of which the other party already invested into the property, means an incurrence of liability for the damage caused by breach of the precontractual liability.

The plaintiff claimed a declaration that the defendant is obliged to pay CZK 1,823,434 as an unjust enrichment. The defendant firstly offered to the plaintiff her house as a gift in 2008 and subsequently she concluded an agreement on authorization to perform a reconstruction of this property with the plaintiff.  Then the defendant changed her mind and wrote a last will according to which the plaintiff should have inherited the property. However, she finally cancelled the last will and at the same time she also terminated the agreement on plaintiff’s authorization to perform the reconstruction.

According to the plaintiff, there occurs a breach of the precontractual liability. The Court of the First Instance allowed the legal action only in part – as to the amount of CZK 1,663,500 (difference in evaluation of the paid costs). The Appeal Court changed the judgement of the Court of the First Instance and refused the legal action as to the amount of CZK 1,012,500 and declared that the plaintiff should be paid CZK 650,000 (release of the unjust enrichment in the amount in which the plaintiff increased the property’s value in fact – not the costs the plaintiff really paid).

The Supreme Court revoked the decision of the Appeal Court and agreed with the plaintiff’s view or the Court of the First Instance respectively (there was a breach of the preventive obligation as provided by laws in which case the defendant is liable for damages).

According to the Supreme Court, the plaintiff reasonably presumed conclusion of the gift contract. Because of that, the costs invested by him on the property on the basis of the agreement on performance of the property’s reconstruction, represented a real damage (uselessly made costs) if no gift occurred. The other party changed her mind as to the gift without any justifiable reason, even though she knew that the plaintiff had performed the reconstruction of her property with her consent and having a good faith in the subsequent giving. The plaintiff thus has a right for damages in the amount of the paid costs.

(Decision of the Supreme Court from 26 October 2016, file no. 25 Cdo 337/2015)