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:
(a) State the legal issues involved in this dispute; (3 marks)
