Business Contracts

Article 1650 of the Civil Code primarily requires the buyer to pay the price , at the time of delivery if the price has not been paid at the time of sale (Art. 1651 Civil Code) . Payment of the price is therefore due on delivery, which, under Article 1604 of the Civil Code, is understood to be the “conveyance of the thing sold into the authority and possession of the buyer”, an obligation which th …

Principle

Article 1650 of the Civil Code primarily requires the buyer to pay the price , at the time of delivery if the price has not been paid at the time of sale (Art. 1651 Civil Code) . Payment of the price is therefore due on delivery, which, under Article 1604 of the Civil Code, is understood to be the “conveyance of the thing sold into the authority and possession of the buyer”, an obligation which the seller may avoid if the buyer has not paid the price, without having been granted a payment term (Art. 1612) . Loss of the thing which cannot be attributed to the seller does not exempt the buyer from paying the agreed price .  The purchaser may claim force majeure, which is characterized by the occurrence of an external, unforeseeable, and unavoidable event, but only if they can prove that they were unable to perform their obligation, and not merely that the circumstances made the obligation more onerous or difficult .

Article 1651 stipulates that payment of the price and delivery must in principle be simultaneous. In effect, the obligations arising from the sale, i.e. delivery of the thing by the seller and payment of the price by the buyer, are mutual and interdependent, so that payment is inconceivable without delivery, and vice versa . Consequently, in the absence of a specific agreement, the buyer's obligation to pay the sale price arises from the seller's full performance of his obligation to deliver .

However, if the seller has not fulfilled his obligation to deliver, the purchaser who has not yet paid the full price is entitled, in view of the bilateral nature of the sale, to invoke the plea of non-performance and retain part of the price . In effect, the concept of the unity of the contract and the independence of the obligations arising from it authorizes the buyer to suspend the obligation to pay when the obligation to deliver, which is the primary and principal obligation, has not been fulfilled by the seller . Consequently, if an inseparable component necessary for the operation of a computer system has not been delivered, the buyer cannot be forced to pay the full price . Nor can a court of appeal order the buyer of a garment with a defect that could not be detected on delivery to pay the seller all the sums claimed, without investigating whether the seller has fulfilled his obligations and, if not, whether the non-performance was sufficiently serious to release the buyer from his corresponding obligations .

The buyer may also, in accordance with Article 1653 of the Civil Code, suspend payment if he fears he will be or has reason to fear he will be affected by a claim, either as a result of a mortgage or for ownership , until such time as the seller has put an end to the situation, unless it is stipulated that, notwithstanding the situation, the buyer will pay. Thus, in the absence of such a stipulation, a court of appeal may not, in order to declare the sale of an immovable property rescinded for non-payment of the selling price, hold that it is up to the buyer to pay off the mortgage creditors or, if he prefers, to follow the procedure for discharge of the mortgage . However, in application of Article 1653 of the Civil Code, the purchaser may not exercise his right to suspend payment of the price without giving the seller the opportunity to exercise his right, as recognized by this article, to compel the purchaser to make payment by putting an end to the claim or providing a warranty .

In the absence of any stipulations to the contrary, payment of the price is, in principle, to be made in full, as it must be made at the same time as the delivery of the goods, which must take place when the sale is concluded. However, the seller may grant the buyer a deadline for payment, as provided for in Article 1612 of the Civil Code. Such deadlines are common practice in commercial matters, with Article L. 441-10 et seq. of the Commercial Code setting maximum payment deadlines which may not be exceeded.

Finally, the parties may agree that the price is to be paid in advance, in whole or in part, on conclusion of the contract. When the parties agree on the downpayment  the sums advanced are in execution of a completed sale in accordance with the provisions of Article 1583 of the Civil Code. They constitute partial and advance payment of the price agreed between the parties, who cannot withdraw from the sale . A down-payment (or “acompte” in French) differs from a deposit (or "arrhes"), which, as stipulated in Article 1590 of the Civil Code, allows either party to withdraw from the sale .

See for a recent illustration: CA Poitiers, April 4, 2023, LawLex202300008937JBJ and Cass. 3e civ, 9 December 1986, LawLex202200001371JBJ, which holds that the sale of a thing may be carried out in return for a consideration other than the payment of a sum of money - in this case, the obligation to build on the land covered by the agreement.

See in this respect: CA Toulouse, 3 December 2007, LawLex202300008946JBJ, holding that the day on which the payment of the price must be made, in the absence of any precision in the deed of sale, in application of Article 1651 of the aforementioned Code, is the day on which delivery must take place.

Cass. com. 16 July 1980, LawLex202200003252JBJ.

Cass. 3e civ, 7 November 1978, LawLex202300008928JBJ.

Cass. 3e civ, 26 May 1992, LawLex202300003833JBJ.

CA Aix-en-Provence, 20 January 2012, LawLex202300008936JBJ.

For an example, see CA Rennes, 12 January 2021, LawLex202300008938JBJ.

Cass. com, 7 December 1993, LawLex202300008577JBJ.

CA Rennes, 6 February 2024, LawLex202400001443JBJ.

Cass. 3e civ, 26 November 2020, LawLex202300008927JBJ.

Cass. 3e civ, 7 September 2022, LawLex202300008828JBJ; Cass. 1re civ, 15 May 2015, LawLex201500001803JBJ, censuring a court of appeal which ordered the buyer to pay the full price of a set of computer hardware of which an inseparable element, as it was necessary to ensure one of the functions of the system, had not been delivered, since, in the absence of a specific agreement, the buyer's obligation to pay the price results from the seller's complete performance of its obligation to deliver; See for a recent illustration: CA Rennes, 12 January 2021, LawLex202300008938JBJ; CA Toulouse, 27 February 2024, LawLex202400002009JBJ.

CA Douai, 16 February 2023, LawLex202300008976JBJ.

CA Lyon, 9 July 1987, LawLex202300008944JBJ.

Cass. 1re civ, 19 November 1996, LawLex200500008706JBJ.

Business Contracts

153. Principle

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153. Principle

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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