Business Contracts

Under Article 1217 of the Civil Code, the party against whom the commitment has not been fulfilled, or has been only partially fulfilled, may therefore seek forced performance in kind of the obligation, or apply for rescission of the sales contract and/or compensation for the consequences of non-performance.
When the promisor refuses to sell to the promisor, despite the exercise of the option, the …

Breach of promise

Under Article 1217 of the Civil Code, the party against whom the commitment has not been fulfilled, or has been only partially fulfilled, may therefore seek forced performance in kind of the obligation, or apply for rescission of the sales contract and/or compensation for the consequences of non-performance.

When the promisor refuses to sell to the promisor, despite the exercise of the option, the sanction for breach of his obligation will often be the forced implementation of the sale. Thus, according to the Court of Cassation, the sale is deemed to be completed upon expiry of the time-limit contractually fixed for the promisor to implement the unilateral promise of sale he has granted on his business, once the beneficiary has exercised the option . Moreover, unless a penalty clause or a right of withdrawal has been provided for in the unilateral promise of sale, the promisor who fails to comply with the consequences of the exercise of the option commits a contractual fault, so that the beneficiary, who becomes the buyer by exercising the option, may claim, on the basis of Article 1217 of the Civil Code, in addition to specific performance of the sale, damages for the loss suffered .

Although the situation is less common in practice, failure to comply with the stipulations of the unilateral promise to sell may also be attributable to the beneficiary. To justify the award of damages to a promisor where the beneficiary had concealed information likely to significantly increase the value of the property sold, the Court of Cassation has stated that the deed of sale which follows a unilateral promise to sell is not a reiteration of the sale, but its completion, and that it is therefore at the date of completion of the sale that the loyalty, good faith and sincerity of the contracting parties should be assessed. Thus, since on such date, as evidenced by the signing of the notarized deed under the terms of the unilateral promise to sell, the meeting of the minds of the seller/promoter and the buyer/beneficiary took place on an occupied property, sold as such, for the price of EUR 1,100,000, whereas between the acceptance of the promise and the exercise of the option, the beneficiary had obtained an undertaking from the tenant in place to return the apartment in return for an indemnity of EUR 100,000, the Court of Cassation considered that the concealment of the vacating of the premises, likely to significantly increase the value of the property, demonstrated a lack of fairness, good faith and sincerity on the part of the beneficiary, thus entitling the promisor to an award of damages .

Cass. com. 14 June 1982, LawLex202200002085JBJ, adding that the promisor cannot simply state that he cannot sign the deed of sale because no inventory has been taken, when he never declared that he wished to make use of the right of withdrawal, nor clearly expressed his intention to refuse to sign.

CA Angers, 2 April 2024, LawLex202400002932JBJ.

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

Business Contracts

81. Breach of promise

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

81. Breach of promise

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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