A buyer paid a reservation fee on a bungalow that was never built and sued for damages. The Supreme Court held the option void for uncertainty: he got his fee back.
In July 2007 a buyer paid CY£3,000, which is 5,125.80 euro, for the right to buy a two-bedroom bungalow in a development that had not yet been built. The development never went ahead. He was offered his money back, was not satisfied with that, and sued the developer for damages. On 16 June 2026 the Supreme Court dismissed his appeal: the document he had signed was void for uncertainty, so there was no contract to breach.
He recovered the fee. Nothing else.
What the buyer signed
On 2 July 2007 the parties signed a document headed "Option to purchase Bungalow No. 12" in a complex to be called "Regina Gardens", which the developer was to build. The buyer paid the sum described in the document as an "option" or "reservation fee" on the day he signed.
The option was to remain open for 15 days from the date the seller told the buyer that the architectural plans and technical terms were complete. Within that period the buyer was to exercise it, and the contract of sale would then be signed within a further 30 days, with the method of payment fixed at that stage. The exact price was to be worked out from the square metres of the house once the architectural plans were available and complete. December 2009 was named as the completion date for the development, but the exact date was to be confirmed on completion of the plans and the issue of the planning permit.
The document also provided for its own undoing in two cases. If the plans were not ready in time, or the technical terms did not satisfy the buyer, he could cancel the option and the seller's only obligation was to repay CY£2,600. If the bank financing the project did not approve the buyers' loans, the seller would repay the full CY£3,000 and the agreement would be treated as void.
Why the house was never built
The Planning Authority was slow to issue the permit, and when it came it approved 25 residential units instead of the 38 the application had sought. The land belonged to a separate company, which had contracted with the developer for the project to be built on it. Faced with the planning restrictions, the landowner no longer wished to proceed and ended its agreement with the developer. The developer told the buyer the project would not go ahead and offered to return what he had paid.
The buyer wanted more. He claimed damages for breach of the option, on the footing that the developer had no right to walk away from it. The Larnaca District Court dismissed the damages claim, and the Supreme Court, sitting as a bench of three and giving a unanimous judgment, upheld that result.
The test the document failed
Section 29 of the Contracts Law, Cap. 149, provides that agreements whose meaning is not certain, or capable of being made certain, are void. The court explained that where an alleged agreement is so vague or uncertain that the court cannot interpret or apply it, there is no contract. The validity of an agreement depends on its essential terms being precisely fixed, so that the court construes the bargain rather than writing it.
Drawing on English authority, the court noted that an agreement to agree on an essential term is likely to prevent any contract from coming into existence. It also noted the distinction drawn in Jet2.com Ltd v Blackpool Airport Ltd between a term too uncertain to bind anyone and a term whose core is clear, which will be applied however hard its exact extent is to pin down.
Where the document itself contemplates further negotiation on significant matters before a contract is concluded, there is no legally binding contract.
This document fell on the wrong side of that line. At signature there were no completed architectural plans and no exact dimensions. The plans were open to change at the Planning Authority's discretion, and no permit had been obtained. The price was indicative, and the completion date depended on when the permit would issue. The court held that each of these was an essential matter, and none was fixed.
The buyer argued that the price had been set at CY£1,600 per square metre, and that the plans would at most change the area by a few square metres. That did not help him. The price per square metre was only as certain as the area it multiplied, and the area could not be known without approved plans. The trial court pointed to what happened next: the application sought 38 units and the permit approved 25.
Why contra proferentem did not rescue the buyer
The buyer's last argument was that any unclear term should be read against the developer, which had drafted the document. The court accepted that under the contra proferentem rule an ambiguity in wording proposed by one party, especially a standard form, is resolved against that party, typically where a party with bargaining power has put forward unclear terms that the other side had to accept.
It did not apply here. This document was prepared at a stage when the plans and technical terms were not complete, the area was unknown and the prices were indicative. Its terms were unclear and incomplete, so no completed contract came into being, and there was nothing for the rule to construe. The same point arose, in a different setting, when a fee clause with two bases was held void earlier this month: see our note on the uncertain fee clause. The difference is that the fee clause said too much, and this option said too little.
What the buyer recovered
The trial court awarded the buyer the CY£3,000, which the developer had paid into court, as money paid under a preliminary and non-binding arrangement. It also found that the buyer had not produced the evidence needed to prove his loss, and that the arrangement was conditional on the planning permit, but the Supreme Court did not examine those findings: once the first ground failed, the others were of theoretical significance only. The appeal was dismissed with 1,500 euro plus VAT in costs against the buyer.
What this means in practice
For buyers reserving off plan, a reservation or option document signed before the planning permit may be exactly what this one was: an exclusive right to buy on terms that do not yet exist, not a purchase. It protects the money, if the refund terms are clear, and very little else. When this project collapsed, what the buyer recovered was the fee. Our note on reservation agreements sets out the terms worth settling before you pay.
For buyers who want the unit itself, the protection comes from a contract of sale with the essential terms fixed: the unit identified on approved plans, its area, a price that is a figure and not an estimate, and a completion date that does not float with the permit. Until those exist, the document you hold is unlikely to support a claim for damages or for the unit. We review off-plan contracts before signature through our contract review service.
For developers, the judgment shows that a document drafted as "indicative" and "to be confirmed" did not bind this developer to deliver or to pay damages. It also shows what the developer did: it offered the fee back when it told the buyer the project would not proceed, the sum was paid into court, and the buyer was awarded the full amount. A developer that tried to keep the money would be arguing a different case, which this judgment does not decide.
The trap is the word "option". Both parties called this an option, and the buyer's whole case rested on the developer being bound by it. A right to buy is only as good as the terms on which it can be exercised, and where those terms are left to be worked out later, the court will not supply them.
Questions we are asked
What is an option or reservation document for an off-plan property?
As the Supreme Court described it, a document that gives the buyer the exclusive right to buy a chosen unit in a development. The buyer may exercise the right but is not obliged to. The seller, for its part, must offer the property to the buyer if the buyer does decide to exercise it. Whether the document is also a binding contract depends on whether its essential terms are fixed.
Why was the document in this case void?
Because, when it was signed in July 2007, the essential matters were not settled. The architectural plans were preliminary, carried no dimensions and were open to change by the Planning Authority, from which no permit had yet been obtained. The area of the unit was not known, the prices were stated to be indicative, and the completion date was to be confirmed once the plans were finished and the planning permit issued. Section 29 of the Contracts Law, Cap. 149, makes void an agreement whose meaning is not certain or capable of being made certain.
Was a price per square metre not enough to fix the price?
Not here. The buyer argued that the price had been set at CY£1,600 per square metre and that only a few square metres might change. The trial court held that the price was not binding, because it depended on the area of the house, which could not be fixed until approved plans and a permit existed. The Supreme Court agreed that the sale price was indicative, as the document itself described it.
Does an unclear document drafted by the developer not get read against the developer?
Not where the problem is that terms are missing. The contra proferentem rule resolves an ambiguity against the party that proposed the wording, typically a party with bargaining power whose unclear terms the other side had to accept. The court held that it did not apply on these facts, because the terms were not merely unclear but incomplete, and so there was no completed contract to construe.
What did the buyer recover?
The fee he had paid, 5,125.80 euro (CY£3,000). The developer had paid that sum into court and the trial court awarded it to him, on the basis that it had been paid under a preliminary, non-binding arrangement. His claim for damages failed, and his appeal was dismissed with 1,500 euro plus VAT in costs against him.
Did the Supreme Court decide whether the arrangement was conditional on the planning permit?
No. The trial court had also held that the arrangement was subject to the issue of a planning permit and that the buyer had not proved his loss. The Supreme Court decided the appeal on the first ground alone, uncertainty, and said that examining the other grounds would be of theoretical significance only.
Sources
- Fariboz Askari v. Iacovou Brothers (Development) Ltd, Civil Appeal 347/2016 (with 406/2016 and 407/2016), Supreme Court of Cyprus, 16 June 2026
- Contracts Law, Cap. 149, consolidated text, CyLaw
This article is provided for general information purposes only and does not constitute legal advice.
Klitos Platis
Advocate, Partner
Kleanthous & Platis LLC, Nicosia · Published 26 September 2026
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