Business Contracts

Pursuant to Article 1172 of the Civil Code , which was enacted as part of the reform of contract law and which enshrines the principle of consensuality, a unilateral promise to sell is in principle consensual, like the agreement it precedes, i.e. the exchange of consent is sufficient to constitute the conclusion of the promise . The acceptance of a unilateral promise of sale by the beneficiary  ma …

Formal requirements

Pursuant to Article 1172 of the Civil Code , which was enacted as part of the reform of contract law and which enshrines the principle of consensuality, a unilateral promise to sell is in principle consensual, like the agreement it precedes, i.e. the exchange of consent is sufficient to constitute the conclusion of the promise . The acceptance of a unilateral promise of sale by the beneficiary  may be inferred from the circumstances of the case, such as oral information given to the promisor by his notary and payment of the price .

The law does, however, provide for two cases where, by way of exception, the solemnity of the act is necessary for the formation of the unilateral promise. Article 1589-2 of the Civil Code  states: “Any unilateral promise to sell relating to an immovable , a right in rem in immovable property , a business , a right to a lease relating to all or part of an immovable property or to the shares of undertakings referred to in Articles 728 and 1655 ter of the General Tax Code, is null and void in effect if it is not recorded in a notarial deed or in a private deed registered within a ten-day period from the date of its acceptance by the beneficiary. The same applies to any transfer relating to such promises which has not been the subject of a notarial deed or a private deed registered within ten days of its date”.

This provision has given rise, and continues to give rise, to an abundance of litigation, most of which pits the promisor against the beneficiary, who wishes to implement the sale, and who seeks to revoke his commitment to sell by arguing that the promise is invalid due to non-compliance with the registration formalities. In order to “punish the fickleness” of the promisor, trial courts tended to uphold the validity of the promise, often in a questionable manner. The Court of Cassation thus censured a Court of Appeal judgment which had held that private deeds, even when unregistered, remain valid as far as the parties' commitments are concerned, and that the seller and buyer were in agreement as to the property and the price in order to confirm the completion of the sale . Similarly, in quashing the judgment of a court of appeal which, in recognizing the validity of a unilateral promise to sell, subject to a suspensive condition even though it did not meet the conditions for application of Article 1589-2 of the Civil Code, had declared that the starting point of the time-limit for registration was the implementation of the suspensive condition by which the agreement became final, the Court of Cassation pointed out that any unilateral promise of sale is null and void if it has not been registered within a time-limit of ten days from its acceptance, the effect of implementing the suspensive condition being to make the agreement retroactive to the date of acceptance .

The Court has also set certain limits for trial courts, which were inclined to reclassify unilateral promises to sell - the only promises covered by Article 1589-2 - as bilateral promises, in order to avoid the formalities required by that article . According to the Court of Cassation, a unilateral promise to sell, subject to the provisions of Article 1589-2 of the Civil Code, is null and void if it is not registered within ten days of acceptance, even if the beneficiary avails himself of the existence of concurrent unilateral promises to sell and to purchase, since such a circumstance only confers a bilateral character to such promises if they cover the same subject-matter and are stipulated under the same conditions . Similarly, it overturned a ruling which reclassified a unilateral promise to sell as a bilateral promise, and declared the latter null and void for lack of registration, since the conclusion by the parties of a bilateral promise to sell after agreeing on the subject-matter and the price, cannot be construed from their correspondence, which can only be assessed by reference to the invalid promise and necessarily reflects the consent already given by the beneficiary .

Apart from possible reclassification, the Court of Cassation recognizes the validity of a unilateral promise to sell, even in the event of failure to comply with the formalities laid down in Article 1589-2, when it is included in an agreement comprising a set of reciprocal contractual obligations provided that the necessary connections exist between those various obligations, which could amend the characteristics of the promise . In a ruling from 24 February 2006 in the same case, the plenary assembly of the Court of Cassation held that a promise to sell included in a transaction is not subject to the provisions of Article 1589-2 of the Civil Code, since it is only one element of the transaction, which itself is an agreement stipulating interdependent reciprocal undertakings, and has the authority of res judicata between the parties . More recently, the Court has accepted that a unilateral promise to sell, amended by a contract amendment, which forms part of a more comprehensive transaction, is not subject to the provisions of Article 1589-2 of the Civil Code, provided that there is a relationship of dependence between the reciprocal obligations of the parties, such as to amend the characteristics of the promise .

As regards the conditions of application of Article 1589-2, the courts consider that it is not apparent from this provision that acceptance of a unilateral promise to sell must be made in writing . In addition, a unilateral promise to sell in the form of a bailiff's report is null and void, since it does not constitute an authentic deed and is only valid for information purposes . In addition, the invalidity resulting from non-compliance with the public policy rule laid down in Article 1589-2 of the Civil Code cannot be counteracted by a waiver, even if express, by the parties .

The Construction and Housing Code also provides for another exception to the consensual nature of unilateral promises to sell. Article L. 290-1 states: “Any promise to sell for the purpose of transferring a building or a right in rem in immovable property, the validity of which exceeds eighteen months, or any extension of such a promise bringing its total duration to more than eighteen months, is null and void if it is not recorded in an authenticated deed, when it is granted by a natural person”. As long as these conditions are met, the Court of Cassation considers that this provision is applicable to any promise to sell, whether it is classified as a unilateral or bilateral promise to sell . The Court recently specified that the formalities set out in Article L. 290-1 of the Construction and Housing Code apply on penalty of relative nullity of the promise to sell, insofar as they are designed solely to protect the promisor who ties up his property for a long period of time .

Art. 1172 Civil Code: "In principle, agreements are consensual.

By exception, the validity of solemn agreements is subject to the observance of requirements of form determined by law, failing which the agreement is null and void, unless it can be rectified.

In addition, the law subordinates the formation of certain agreements to the delivery of a thing".

In the same sense: Cass. 3e civ, January 19 2022, LawLex202300002048JBJ, noting that in the case of a unilateral promise to sell, only the promisor undertakes to sell, while the beneficiary does not contract an obligation to buy, so that the deed of sale following a unilateral promise to sell is not a reiteration of the sale, but the implementation of the latter.

Cass. 3e civ. 26 June 2002, LawLex202100006450JBJ.

Cass. 3e civ. 3 February 1993, LawLex202100006131JBJ.

Cass. com, 15 February 2002, LawLex202100006132JBJ.

Cass. com. 24 February 2006, LawLex202300002521JBJ; See, in the same vein, Cass. 3e civ. 26 March 2003, LawLex202300002646JBJ.

Cass. com. 16 October 2019, LawLex202200002091JBJ.

Cass. 3e civ. 24 February 1976, LawLex202100006118JBJ, holding that a real estate agent who is the beneficiary of a unilateral promise of sale on a building and who advertises it extensively in the press thereby manifests his acceptance of the promise, which, not having been registered within ten days of acceptance, is null and void, by application of Article [1589-2 of the Civil Code].

Cass. 1re civ., 19 February 1991, LawLex202200002026JBJ.

CA Paris, 3 February 2005, LawLex202200002403JBJ.

Cass. 3e civ, 18 February 2015, LawLex202100005975JBJ.

Cass. 3e civ. 26 November 2020, LawLex202300005301JBJ.

CA Paris, 31 May 2024, LawLex202400004266JBJ.

This rule, originating in tax law, was previously set out in article 1840-A of the General Tax Code.

For an example of a unilateral promise to sell a building, null and void for lack of registration, See CA Paris, 3 February 2005, LawLex202200002403JBJ.

Cass. 3e civ, 1 July 1998, LawLex202300002652JBJ, for a unilateral promise to transfer real estate rights to the French State, declared null and void for failure to register.

Cass. com. 16 October 2019, LawLex202200002091JBJE, for a unilateral promise to sell a business, null and void for failure to register.

Cass. 3e civ, 14 December 1994, LawLex202300003468JBJ.

Cass. com, 15 December 1987, LawLex202100006137JBJ. See Cass. 3e civ. 7 July 1982, LawLex202300005991JBJ.

CA Montpellier, 4 April 2024, LawLex202400003106JBJ.

Business Contracts

71. Formal requirements

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71. Formal requirements

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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