The court confirmed that, under French law, a legally binding sale may be concluded upon the seller's unconditional acceptance of an offer that clearly identifies the property and specifies the purchase price.
The fact that no sale and purchase contract (compromis de vente) has yet been signed does not, by itself, allow the seller to withdraw.
The Facts
The dispute concerned the sale of a 142m² apartment together with two parking spaces.
A prospective purchaser, through an estate agent, submitted a written offer to buy the property for €830,000. The offer clearly identified the apartment, the parking spaces and the agreed purchase price.
The seller responded by email stating "I confirm that I accept X's offer for the amount of €830,000..."
The acceptance was expressed in clear and unconditional terms.
However, before the transaction progressed any further the seller decided not to proceed with the sale.
The purchaser brought legal proceedings, arguing that the parties had already reached a binding agreement.
The seller relied upon an apparent discrepancy between the purchaser's offer and the estate agent's mandate.
Although the purchaser's offer referred to both the apartment and the two parking spaces, the mandate given by the seller to the estate agent did not expressly include the parking spaces.
The Court of Appeal considered that this difference meant there had not been a true meeting of minds. It therefore concluded that no binding contract had been formed.
Supreme Court
The Cour de cassation overturned that decision.
It held that the seller had accepted, firmly and without reservation, an offer specifying both the property being sold and the agreed price.
The court considered it irrelevant that the description contained in the accepted offer did not exactly match the description appearing in the estate agent's mandate. The mandate regulates the relationship between the seller and the estate agent; i`t does not determine whether the seller and purchaser have themselves entered into a binding agreement.
Having accepted the purchaser's offer unequivocally, the seller could not simply decide not to proceed.
The decision reflects one of the fundamental principles of French contract law.
Article 1583 of the French Civil Code provides that a sale is perfected as soon as the parties have agreed on the thing being sold and the price, even if the property has not yet been delivered and the purchase price has not yet been paid.
This does not mean that every accepted offer automatically creates a binding contract. Much depends upon the wording of the offer and the acceptance, which may mean the parties are not legally committed.
However, where the acceptance is unconditional and identifies both the property and the agreed price, French courts may conclude that the essential elements of the sale have already been agreed.
The case also illustrates an important difference in the law for buyers and sellers in French residential conveyancing.
Once a compromis de vente has been signed and formally notified, an individual purchaser generally benefits from a statutory ten-day cooling-off period during which they may withdraw without giving any reason.
This right of withdrawal granted to a buyer does not exist for the seller, who is bound by the contract.
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