Business Contracts

Under Article 1123, paragraph 1, of the Civil Code: “A pre-emption agreement is an agreement by which a party undertakes to offer its beneficiary priority to transact business with it in the event that it decides to enter into a contract”. The promisor, when deciding to sell, must therefore necessarily make an offer of sale to the beneficiary of the pre-emption agreement. The offer must be made in good faith, with no dishonest intention of evading the pre-emption agreement . Whether the promisor has fulfilled his obligation to notify the offer is assessed on the day he decides to sell . The beneficiary is free to accept or refuse the offer to sell made in execution of a pre-emption agreement, but his acceptance is deemed to be a binding sale .

According to the Court of Cassation, the application of a pre-emption agreement, incorporated into a commercial lease for premises forming part of a building, cannot result in the owner being required to divide his property with a view to selling it to separate parties . The owner of a house and a meadow, leased together, therefore respects the pre-emption agreement entered into with the lessee in the event of the sale of the meadow alone, when he offers the lessee preference for the whole of his property under the same conditions as those granted to a third party . However, when the pre-emption agreement does not distinguish between the sale of the entire property and the sale of the leased premises only, the promisor is not relieved from notifying the proposed sale of the entire property.

In the event of refusal by the beneficiary, which may be explicit or implicit , the promisor is released from his obligation to the beneficiary. Thus, if, under the terms of the offer made by the promisor, his intention was to implement his sale project within a short period of time, if necessary by finding other buyers, and if the beneficiary of the pre-emption agreement did not reply within a reasonable time or did not respond to the letter from the promisor's son, who reiterated the offer but at a higher price, the beneficiary can no longer claim to have a general right of preference . 

Cass. 3e civ., 10 July 1969, LawLex202300006439JBJ, quashing, on the basis of former Article 1134 of the Civil Code, a judgment by a court of appeal declaring a pre-emption agreement null and void, without establishing that the promisor had actually drawn up and notified the beneficiary of the pre-emption right of the proposed deed of sale.

Cass. com. 16 February 2022, LawLex202300006333JBJ.

Cass. 3e civ, 22 September 2004, LawLex202200001074JBJ.

Cass. 3e civ. 9 April 2014, LawLex202200000613JB.

Cass. 3e civ., 15 December 1971, LawLex202300006440JBJ, specifying that the right of the tenant, beneficiary of a pre-emption agreement, can only be exercised on the transfer made during his lease agreement and within the limits of the terms of the transfer, so that the lessee of a meadow cannot reproach the owner for offering him the pre-emption right to acquire the whole of his property, including the dwelling, when the pre-emption clause in the lease agreement only concerned the meadow.

Article 1123, paragraphs 3 and 4, confirms the possibility of the beneficiary implicitly refusing to exercise the pre-emption agreement, when it provides that the third party, initiating the interrogatory action, “may ask the beneficiary in writing to confirm , within a time-limit set by the third party, which must be reasonable”, it being understood that “failing a reply within this period, the beneficiary of the agreement may no longer invoke his or her substitution for the agreement concluded with the third party, or the invalidity of the agreement”.

Cass. 3e civ, 20 May 1992, LawLex202200000612JBJ

104. Implementation of the pre-emption agreement