Business Contracts

In the case of a promise to sell, unless otherwise stipulated, the expiry of the period fixed for the confirmation of the sale by notarial deed entitles each of the parties  either to take action for the specific performance of the sale, or to seek its rescission and compensation for the harm caused, on the understanding that the event which justifies the exercise of this right can only consist in …

Breach of promise of sale

In the case of a promise to sell, unless otherwise stipulated, the expiry of the period fixed for the confirmation of the sale by notarial deed entitles each of the parties  either to take action for the specific performance of the sale, or to seek its rescission and compensation for the harm caused, on the understanding that the event which justifies the exercise of this right can only consist in the knowledge, by the party entitled to this right, of the refusal of the other party to perform its principal obligation to sign the notarial deed of sale . 

According to the Court of Cassation, an action seeking performance of a bilateral promise of sale brought by the purchaser against a seller who has not fulfilled his commitment to transfer shares is not an action in rem  which presupposes that the party bringing the action has title to the property and as such is not subject to any limitation period, but an action in peronam relating to a personal claim subject to the five-year limitation period provided for in Article 2224 of the Civil Code, insofar as ownership of the transferred shares has not been transferred to the purchaser by the promise .

In cases of failure to confirm, the Court of Cassation also accepts that the sellers of a building having refused to sign the deed of sale on the date stipulated in the bilateral promise to purchase must pay damages to the undertaking which was due to locate its head office in the building in question, as a third party to an agreement is entitled to sue in tort for breach of contract which has caused loss, and the undertaking in question had to register and transfer its registered office to a provisional address as a result of the seller's refusal to sign the deed .

On the other hand, where the promise of sale was concluded subject to the proviso of obtaining a loan, which was not implemented, the beneficiary does not commit a breach in the performance of any contractual obligations by allowing the final time-limit for confirmation to pass without notifying the promisor . The Court of Cassation has specified that a claim by the beneficiary of a promise subject to a condition precedent that has not been fulfilled, when it concerns the restitution of the immobilization indemnity, constitutes a purely personal and property-related claim, the resolution of which in no way implies the application of the rules relating to the transfer of real property or the constitution of real property rights . Conversely, the beneficiary of the promise cannot, in order to avoid paying the contractually agreed indemnities, rely on the non-fulfillment of a particular condition which not only cannot be classified as suspensive - since it is subject to no specific period and no sanction is attached to its non-fulfillment - but was also stipulated solely for his benefit and the performance of which is his personal responsibility, unless he seeks to rely on his own wrongdoing .

In this vein, see Cass. 3e civ. 29 May 2013, LawLex202100006416JBJ, stating that when the sale has not been confirmed by an authenticated deed, the beneficiary of a bilateral promise of sale has sole standing to sue for the return of the security deposit paid in fulfilment of the contract, even if the sum was paid by a third party.

Cass. 3e civ, 1 October 2020, LawLex202300004799JBJ1, stating that a court of appeal may not declare an action for rescission of the sale by an undertaking having granted a bilateral promise of sale to be time-barred, pursuant to Article 2224 of the Civil Code, on the grounds that, from the day after the date set for the signature of the deed of sale, the company knew that the promise had not been confirmed and that it could take action, without demonstrating actual knowledge at that date of the beneficiary's refusal to implement the sale.

Cass. 3e civ, 8 July 2021, LawLex202300004866JBJ.

Cass. 3e civ. 4 July 2007, LawLex202100006442JBJ.

Cass. 3e civ, 11 May 2006, LawLex202200000554JBJ.

Cass. 2e civ, 13 October 2016, LawLex202100006417JBJ.

CA Grenoble, 3 February 2024, LawLex202400001766JBJ.

Business Contracts

96. Breach of promise of sale

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96. Breach of promise of sale

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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