Friday 04 December 2020
What is the legal validity of an offer and acceptance in the sale of French property?
Under French law, if you make an offer on a property which is accepted by the seller, then in principle a contract arises, to which both parties are bound.
So, in that sense, there is no such thing in France as ‘sale subject to contract’ as occurs in the UK.
Article 1583 of the civil code states that the sale ‘is perfect between the parties, and ownership is acquired by right from the buyer to the seller, as soon as the thing and the price have been agreed, even though the thing has not yet been delivered or the price paid.’
In order for the contract to be valid the offer must be clear and without conditions.
Strictly speaking, there is no need for buyer and seller to enter into a formal written contract (compromise de vente); the transaction can proceed straight to the completion stage. In practice, that rarely occurs, except for the sale of low value land or ancillary buildings.
In a case recently heard in the French courts, a buyer acting through the estate agent made a written offer of €1.2m on a house, which was accepted in writing by the seller.
The offer indicated all elements that were necessary to identify the property, the price and the payment terms, and no conditions were attached. The name of the notaire was also agreed.
The seller, for their part, accepted the offer by e-mail, and specified to the estate agent that they were available "for any document or subsequent formalities necessary to complete the sale".
The notaries commenced preparation of the compromis de vente, but the seller withdrew from the transaction, without reason. As a result, the buyer sued the seller in court for enforcement of the sale.
The case ended up in the Supreme Court, the Cour de Cassation, who ruled that as the parties had, by mutual agreement, submitted their consent to the signing of a compromis de vente, that they had, therefore, remained at the negotiation stage, and that the sale was not complete.
In order to find out whether there had been agreement between the parties, the judges took into account facts subsequent to the offer and its acceptance, such as the exchanges between the notaries.
The ruling reflects the reality of the sale of real estate, which is inevitably subject to a process, such as the statutory surveys and administrative clearance.
Although, therefore, it is in theory possible for a contract for the sale of real estate to arise simply on the basis of offer and acceptance, without there having been a substantial level of precision stated in the agreement, it will always be subject to formal preparation by the notaire of a sale and purchase contract.