Business Contracts

In some cases, the promisor, although irrevocably bound by the unilateral promise of sale granted to the beneficiary, breaches the promise by selling the same property, the subject matter of the promise, to a third party. Article 1124, paragraph 3, of the Civil Code, a codification of case law resulting from the reform of contract law, stipulates that: “An agreement entered into in breach of a uni …

Penalty for breach

In some cases, the promisor, although irrevocably bound by the unilateral promise of sale granted to the beneficiary, breaches the promise by selling the same property, the subject matter of the promise, to a third party. Article 1124, paragraph 3, of the Civil Code, a codification of case law resulting from the reform of contract law, stipulates that: “An agreement entered into in breach of a unilateral promise with a third party who was aware of its existence is null and void”.

Thus, the sale of an apartment that is implemented by the exercise of an option by the beneficiary of a unilateral promise of sale is null and void where,  even though the beneficiary has received notification of the promisor's writ of specific performance for a promise previously granted to another person for the same property, he or she nevertheless exercises the option to acquire the disputed apartment, in fraud of the latter's rights, acting in bad faith and colluding with the promisor's fraudulent acts . When the promisor sells to a third party the property that is the subject of a unilateral promise to sell that he had previously granted, he is in breach of his promise to the beneficiary and must compensate him for the loss of opportunity to acquire the disputed property . In addition, the beneficiary is entitled to invoke against the third party to the promise, either the fault with which the latter was associated, or the fault of which he was guilty in agreeing to acquire the property he knew to be the subject of a unilateral promise of sale previously granted . On the other hand, a third party acting in good faith, i.e. who was unaware of the existence of a prior promise, cannot be held liable for compensation. In addition, the treatment of a sale concluded by a third party in good faith has given rise to debate.

Cass. 3e civ., 20 February 1979, LawLex202300003070JBJ.

Cass. 3e civ, July 8, 1975, LawLex202200001071JBJ, censuring an appeal decision, which, in order to dismiss the beneficiary of a unilateral promise of sale of his claim for damages against the third party purchaser of the property to which the said promise related, had held that, although this third party had been informed of the existence of the promise of sale, the promisor had told him that he was free of any liability towards the beneficiary, and had declared to him that he would deal with it personally, and that, as no proof of fraudulent collusion between the third party and the promisor had been provided, the third party's liability could not be incurred, even though the said third party had been aware of the promise to sell, had been informed by a letter from the notary of the difficulties that could arise due to the existence of such a promise, and had himself indicated to the notary that he was discharging him from any liability, thus meeting all the elements constituting a fault.

Business Contracts

86. Penalty for breach

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86. Penalty for breach

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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