Business Contracts

Like all contracts, the unilateral promise to sell is formed, under the terms of Article 1113 of the Civil Code, by the meeting of an offer and an acceptance. However, according to the Court of Cassation , unlike a simple offer to sell, a unilateral promise to sell is a pre-contract which contains the essential elements of the final agreement that will serve to exercise the option of the beneficia …

Substantive conditions

Like all contracts, the unilateral promise to sell is formed, under the terms of Article 1113 of the Civil Code, by the meeting of an offer and an acceptance. However, according to the Court of Cassation , unlike a simple offer to sell, a unilateral promise to sell is a pre-contract which contains the essential elements of the final agreement that will serve to exercise the option of the beneficiary, and at the date on which the conditions of validity of the sale are assessed, as well as the consent and capacity of the promisor to contract and to dispose of his property.

At the time of conclusion of the promise, the parties' consent must therefore be free and informed. Pursuant to Article 1112-1 of the Civil Code, “the party who is aware of information whose significance is decisive for the consent of the other party must inform the latter of this fact, if the latter is legitimately unaware of this information or has confidence in the other party”. A breach of the duty to provide pre-contractual information is punishable by the liability of the party who is bound by it, but it may also lead to the annulment of the promise, if it is the cause of a defect in consent, in particular if it has led to a mistake in accordance with Articles 1132  to 1136 , or if it constitutes fraudulent concealment within the meaning of Article 1137 . According to the Versailles Court of Appeal, a breach of the duty to provide pre-contractual information, which would justify the annulment of the unilateral promise to sell under the terms of Articles 1130  et seq. of the Civil Code, is not substantiated insofar as the concealment of information for which the promisors are accused, and its intentional nature, are negated by the fact that the promisors authorized the beneficiary to live in the premises before signing the deed of sale, and more importantly, without any financial consideration, which was the surest way of discovering the allegedly concealed defects . On the other hand, fraudulent concealment on the part of the promisor means that the beneficiary's mistake is always excusable if it was a decisive factor in the beneficiary's decision to sign the unilateral promise to sell. Thus, the beneficiary of a unilateral promise to sell a business is entitled to have the promise annulled if he relied on the promisors' statements in the promise to the effect that, to their knowledge, there was no imminent opening of a business similar to that covered by the promise, whereas this was not true . In addition, the beneficiary and purchaser of a property who, after signing the unilateral promise to sell, concludes an agreement with the occupier for the latter to vacate the premises, without informing the seller at the time of signing the deed of sale, commits a breach of his obligation of loyalty, good faith and sincerity towards the latter, entitling him to damages, insofar as the concealment of the vacating of the premises was such as to significantly increase the value of the property .

As the unilateral promise precedes the contract of sale, it must contain the essential elements of the final agreement, i.e. the parties' agreement on the subject matter and the price . The result, conversely, is that in order to declare a sale complete, a court of appeal cannot consider that the beneficiary has exercised the option by compelling the promisor to implement the sale, and thus give effect to the latter's consent expressed after expiry of the option deadline, whereas a promise to sell only constitutes a sale when there is mutual agreement between the two parties on the thing and the price . While disputes concerning the determination of the subject-matter of the promise are relatively rare, this is not the case for the determination of the price. According to the Court of Cassation, a unilateral promise to sell shares is valid if the price can be determined solely by reference to the amount of shareholders' equity at an exactly specified date, to the exclusion of any other additional element of valuation . Similarly, under Articles 1591 and 1592 of the Civil Code, a unilateral promise of sale is not null and void if it stipulates that the transfer price of the shares corresponds to the market value, taking into account the group's consolidated debt, but excluding the proportion of shareholders' equity corresponding to the capital increase subscribed by the transferee, but that in the absence of agreement on this market value, the parties will defer to a third-party appraiser, who will set the sale price, since recourse to a third-party appraiser, under these conditions, is sufficient to make the price of the promised shares capable of determination . Such a unilateral promise is enforceable as soon as the option is exercised, even if the price has not yet been definitively fixed, provided that the mechanism for determining the price by a third party has been agreed by the parties .

Lastly, a promisor who undertakes to sell on conclusion of the promise must have the capacity and authority to dispose of his property. A unilateral promise of sale relating to property of which the promisor is not the owner and over which he has only a contingent right, so that he cannot confer on the beneficiary a present right over it, must therefore be annulled as it is a prohibited agreement as to future succession (pacte sur succession future) .

Cass. 3e civ, 23 June 2021, LawLex202100006113JBJ; Cass. com, 15 March 2023, LawLex202300004003JBJ. See in addition CA Rennes, 31 January 2023, LawLex202300002154JBJ.

Art. 1132, Civil Code: “An error of law or of fact, unless inexcusable, is a cause of invalidity of the agreement when it relates to the material qualities of the performance due or of the other contracting party”.

Cass. com. 3 February 2015, LawLex202300000260JBJ.

CA Paris, 27 October 2015, LawLex202300000365JBJ. See Cass. com, 30 November 2004, LawLex202300000752JBJ, stating that when the parties to a unilateral promise to sell have referred, in the event of disagreement, to the estimate of an expert with the powers provided for in Article 1843-4 of the Civil Code, the determination of the transfer price does not require a new agreement on their part, so that the transfer is completed on the day the option is exercised.

Cass. com., 28 May 2025, LawLex202500004445JBJ.

Cass. 1re civ., 7 January 1992, LawLex202300005115JBJ.

Art. 1136, Civil Code: “ A mistake as to value by which, without being wrong about the essential qualities of the performance, a contracting party merely makes an inaccurate economic assessment of it, is not a cause of invalidity”.

Art. 1137, Civil Code: "Fraud is the act by a contracting party of obtaining the consent of the other by deceit or falsehood.

The intentional concealment by one of the contracting parties of information which he knows to be decisive for the other party also constitutes fraud.

Nevertheless, it does not constitute fraud for one party not to reveal to the other his estimate of the value of the performance".

Art. 1130, Civil Code: " Mistake, fraud and duress vitiate consent when they are of such a nature that, without them, one of the parties would not have contracted or would have contracted under substantially different conditions.

Their decisive character is assessed with regard to the persons and circumstances in which consent was given".

CA Versailles, 6 January 2022, LawLex202200003403JBJ.

Cass. com, 13 February 2007, LawLex200700000757JBJ.

Cass. 3e civ, 19 January 2022, LawLex202300002048JBJ.

Art. 1583 Civil Code: “[the sale] is completed between the parties, and ownership is automatically acquired by the buyer from the seller, as soon as the thing and the price have been agreed, even though the thing has not yet been delivered or the price paid”.

Cass. 3e civ, 9 December 1992, LawLex202300004406JBJ.-

Business Contracts

70. Substantive conditions

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

70. Substantive conditions

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise