Business Contracts

If the buyer defaults on payment of the purchase price by the due date stipulated in the contract, the seller has a number of options.
Firstly, when the price is due and the buyer has not yet acquired possession of the item, the seller can refuse to deliver it. Article 1612 of the Civil Code states in effect that the seller is not obliged to deliver the thing if the buyer fails to pay the price, e …

Sanction for non-performance

If the buyer defaults on payment of the purchase price by the due date stipulated in the contract, the seller has a number of options.

Firstly, when the price is due and the buyer has not yet acquired possession of the item, the seller can refuse to deliver it. Article 1612 of the Civil Code states in effect that the seller is not obliged to deliver the thing if the buyer fails to pay the price, even though the seller has not given him any specific time-limit for payment. Under Article 2286 of the Civil Code, the seller therefore has retention of title  a right in respect of the unpaid price claim. Retention of title can be exercised over the item itself, or over accessories essential to its use. For example, the seller of a vehicle has a retention of title right on administrative documents, an accessory to the thing sold, the price of which has not been paid by the buyer . Furthermore, as retention of title right, is a right in rem, enforceable against all parties, including third parties not liable for the debt, it is enforceable against sub-purchasers, since the good faith of the sub-purchasers and the insolvency of the purchaser cannot render abusive the exercise of this right by the seller, who could legitimately claim payment of the price .

The seller may then, on the basis of Article 1654 of the Civil Code , request rescission of the sale, which sanctions the buyer's failure to pay the price. Non-performance of the buyer's principal obligation is sufficiently serious to justify judicial rescission . The fact that the deed of sale stipulates that the price will be paid as the work progresses, and specifies the payment guarantees, does not justify deducing from the delivery of the lots prior to full payment of the purchase price, and from the fact that the seller's lien has not been registered, an unequivocal waiver by the seller to bring an action for rescission in the event of non-payment of the price . On the other hand, failure to pay all or part of the purchase price, the amount of which has yet to be determined, does not constitute a fault liable to result in rescission of the contract . Similarly, the buyer's delay in offering to pay the sale price does not justify judicial rescission, given that the seller brought the judicial rescission proceedings for non-payment of the price at a time when the urban pre-emptive rights had not yet been exhausted, and that he had refused to cash the check for payment of the price .

In the case of a sale of real estate, Article 1655 of the Civil Code allows the seller to have the sale rescinded as soon as he is in danger of losing the property and the payment. Where this is not the case, the court may grant the buyer a time-limit which may be shorter or longer, depending on the circumstances. If, after this period, the buyer has still not paid, the sale is rescinded. Furthermore, if the contract for the sale of real estate includes a resolutory clause for non-payment of the price within the agreed time, the sale is cancelled ipso jure, although the purchaser may still pay after expiry of the time-limit, as long as he has not been served with a summons. However, after this summons, the court cannot grant the buyer this same time-limit (Art. 1656).

Cass. com. 31 May 1994, LawLex202200003242JBJ.

Cass. 1re civ, 24 September 2009, LawLex202200000202JBJ.

Article 2403 of the Civil Code, resulting from Ordinance No 2021-1192 of 15 September 2021, specifies that: “The rescission action established by Article 1654 may not be exercised after the extinction of the seller's special mortgage, or in the absence of registration of this mortgage, to the detriment of third parties who have acquired rights to the property on behalf of the purchaser and who have published them”.

CA Toulouse, 3 December 2007, LawLex202300008946JBJ.

Cass. 3e civ, 13 July 2016, LawLex202200000342JBJ.

Cass. com, 12 November 1996, LawLex202300008982JBJ.

Cass. 3e civ, 13 October 2016, LawLex202300008981JBJ.

Business Contracts

156. Sanction for non-performance

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

156. Sanction for non-performance

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise