Preliminary sales agreement | 500 Questions - Business Law (Chapter 2.4.3) • Livv

412. What is a unilateral promise of sale?

Article 1124, para. 1, of the Civil Code defines the unilateral promise of sale as “the contract by which one party, the promisor, grants the other, the beneficiary, the right to opt for the conclusion of a contract whose essential elements are …

413. What are the substantive requirements for the validity of a unilateral promise to sell?

Like any contract, a unilateral promise to sell is formed, under the terms of Article 1113 of the Civil Code, by the meeting of an offer and an acceptance . At the time of the conclusion of the promise, the consent of the parties must be free and …

414. What are the formal requirements for making a unilateral promise to sell?

Pursuant to Article 1172 of the Civil Code, stemming from the reform of contract law, which enshrines the principle of consensualism, the unilateral promise to sell is in principle consensual, like the sales contract it precedes, meaning that the …

415. What effects does the conclusion of a unilateral promise to sell entail?

The conclusion of a unilateral promise to sell first irrevocably binds the promisor. In accordance with the provisions of Article 1124 of the Civil Code, resulting from the reform of contract law, the unilaterally binding promise contract, once …

416. How can the beneficiary of a unilateral promise of sale exercise their option right?

Unless otherwise stipulated, the exercise of the option is in principle not subject to any particular form or modality . Therefore, the promisor who has been orally informed by the notary of the exercise of the option cannot contest the completion …

417. What are the effects of the exercise of the option by the beneficiary of a unilateral promise to sell?

By exercising the option, the beneficiary of the unilateral promise agrees to conclude the sale . By the unilateral promise to sell, the promisor grants the beneficiary the right to opt for the conclusion of the sales contract whose essential …

418. What are the consequences of the beneficiary's waiver of the right to exercise an option in a unilateral promise to sell?

The beneficiary of the unilateral promise of sale is free to give or withhold consent to the sale by exercising the option. Therefore, the abandonment of their option right cannot be reproached, nor can it establish a right to compensation for the …

419. When is the beneficiary of a unilateral promise of sale deprived of their option right?

If the beneficiary can freely waive the option, they may, in certain circumstances, be deprived of the ability to exercise their right, either due to the lapse of the promise, because a third party has been substituted, or because the promisor has …

420. What is a bilateral promise to sell?

According to Article 1589 of the Civil Code: “A promise to sell is equivalent to a sale when there is mutual consent of both parties on the item and the price.” Unlike the mechanism of a unilateral promise, the conclusion of a preliminary bilateral …

421. What are the substantive validity conditions of a bilateral promise to sell?

The bilateral promise to sell (promesse synallagmatique de vente), which contains the essential elements of the sale, is formed by the meeting of an offer and an acceptance through which the promisor and the beneficiary express their intention to …

422. What are the formal requirements for a bilateral promise to sell to be valid?

Consensualism is the principle in matters of sale pursuant to the supplementary provisions of Article 1583 of the Civil Code. The mere exchange of consents between the parties to the bilateral promise regarding the item and the price is generally …

423. What are the consequences of a failure to perform a bilateral promise to sell?

In terms of a promise to sell, unless otherwise stipulated, the expiration of the period set for the reiteration of the sale by authentic deed grants each party the right either to seek specific performance of the sale or to request rescission …

424. What are the consequences of a sale carried out in breach of the bilateral promise to sell?

According to case law, the promisor who sells to a third party the property that is the subject of a bilateral promise of sale fails to fulfill their commitments to the beneficiary, to whom they owe compensation . Regarding the third-party …

425. When does a bilateral promise to sell lapse?

Since the reform of contract law, Article 1186 of the Civil Code provides that the disappearance of one of the essential elements of the contract, subsequent to its formation, is sanctioned by its lapse. According to Article 1187 of the Civil Code, …

426. What is a pre-emption agreement (pacte de préférence )?

The pre-emption agreement is a preliminary contract by which the promisor undertakes to grant a right of preference to the beneficiary, in the event that they decide to sell their property, but remains free not to sell. Article 1123 of the Civil …

427. What conditions must be met for a pre-emption agreement to be valid?

The pre-emption agreement (pacte de préférence) as a preliminary contract, must meet certain conditions to be valid. Like any contract, it arises from the meeting of an offer and an acceptance. The consent of the parties must therefore be free and …

428. What effects does the conclusion of a pre-emption agreement produce?

By concluding a pre-emption agreement, the promisor undertakes to first approach the beneficiary in the event of a sale, but remains free not to sell. As long as there is no intention to sell, the promisor's inaction is not wrongful towards the …

429. What are the consequences of the non-performance of a pre-emption agreement?

The non-compliance with a pre-emption right imposes an obligation to act on the promisor. Therefore, it cannot be sanctioned by specific performance, but only by damages . Apart from the scenario where the promisor blatantly violates the agreement …

430. What are the consequences of a sale made in breach of a pre-emption agreement?

Article 1123, para. 2, of the Civil Code sets out the various sanctions applicable in the event of a breach of the pre-emption agreement in favor of a third party: “When a contract is concluded with a third party in violation of a right of first …

431. When does the pre-emption agreement come to an end?

The preferential agreement may end through its performance or, conversely, because the beneficiary has explicitly , as well as implicitly , refused to invoke it. When the pre-emption agreement does not specify a time limit for accepting the offer …