Territorial Jurisdiction in Real Estate Sales: When to Sue the Promisor at the Property's Location?

You signed a preliminary contract (promesse de vente) for a flat in Annecy, but the buyer backs out at the last minute. You want to sue them for damages. Where do you file your claim? At the court of your home, the buyer's home, or the property's location? The question seems trivial, but it can determine the outcome of your proceedings — and their cost.

This crucial issue was settled by a decision of the French Supreme Court (Cour de cassation) of 8 July 1992 (No. 90-17.319). The case involved a seller who had promised to sell a property in Strasbourg. The buyers, domiciled in the Paris region, refused to sign the notarial deed. The seller sued them before the Strasbourg court, being the location of the property. The buyers raised a plea of lack of jurisdiction: they wanted to be sued in Paris, their domicile. The Court of Appeal (cour d'appel) ruled in their favour, holding that the place of performance of the contract (Strasbourg) was competent. But the Supreme Court (Cour de cassation) quashed this reasoning: in the absence of actual delivery or performance of a service, the mere location of the property is insufficient to establish jurisdiction.

Why is this decision still relevant? Because it reminds us of a simple but often overlooked rule: in contractual matters, the claimant may choose between the court of the defendant's domicile and the court of the place of delivery or performance of the service. But if the contract has not been performed, this second criterion falls away. A property that has not been sold is not "delivered". So, what should you do if you are in this situation? Follow the guide.

The Facts: A Common Story

Mr. Dupont (fictitious name), a property owner in Saint-Julien-en-Genevois, had entered into a preliminary contract (promesse de vente) for a property located in Strasbourg. The buyers, a couple domiciled in Paris, had undertaken to purchase. But on the day of signing the notarial deed, they withdrew, citing a change in professional circumstances. Mr. Dupont, furious, lost several months of negotiations and had to put the property back on the market. He therefore sued the buyers before the Tribunal de grande instance (now Tribunal judiciaire) of Strasbourg, considering that the dispute should be judged where the property was located.

The buyers immediately raised a plea of lack of jurisdiction (a defence challenging the court's competence). Their argument: according to Article 46 of the new Code of Civil Procedure (now Article 42 of the Code of Civil Procedure), in contractual matters, the claimant may bring the case either before the court of the defendant's domicile (Paris) or before the court of the place of actual delivery of the goods or performance of the service. However, according to them, the preliminary contract had not been followed by delivery or performance of a service: the mere fact that the property was in Strasbourg was not enough to make that court competent.

The Paris Court of Appeal (cour d'appel de Paris), seised of the dispute, rejected the plea of lack of jurisdiction. It considered that the claim for payment based on the refusal to sign the notarial deed was a contractual claim, and that the place of performance of the contract was Strasbourg (location of the property). The buyers appealed to the Supreme Court (Cour de cassation). The Supreme Court ruled in favour of the buyers: the Court of Appeal had violated Article 46, paragraph 2, of the new Code of Civil Procedure, because there had been neither actual delivery of a thing nor performance of a service. The mere connection to the property was insufficient. The case was remitted to the Versailles Court of Appeal (cour d'appel de Versailles).

The Court's Reasoning — Analysed

To understand this decision, we must go back to the text of Article 46 of the new Code of Civil Procedure (NCPC), in the version then in force. This article provides that the claimant may, at his choice, bring the case before the court of the place where the defendant resides, or:

• in contractual matters, the court of the place of actual delivery of the goods or the place of performance of the service;
• in tort matters, the court of the place of the harmful event or the court within whose jurisdiction the damage was suffered;
• in mixed matters (actions relating to both contract and property), the court of the location of the property.

The issue was to characterise the nature of the claim. Is a claim for payment based on a refusal to sign a notarial deed contractual? Yes, because it arises from a preliminary contract (promesse de vente), which is a contract. But since the contract had not been performed (no delivery, no service), the alternative criterion (place of delivery or performance) could not apply. The Court of Appeal had erred by considering that the place of performance was Strasbourg, whereas no performance had taken place. The Supreme Court (Cour de cassation) recalled that the mere location of the property is not sufficient to characterise a delivery or a service. In other words, the claimant cannot "invent" a fictitious place of performance to circumvent the general rule of jurisdiction (the defendant's domicile).

This decision is in line with consistent case law: the Supreme Court (Cour de cassation) is very protective of the defendant, who must not be brought before a distant court without valid reason. Here, the buyers were domiciled in Paris: they should have been sued before the Paris court, unless the claimant could demonstrate actual delivery or performance of a service in Strasbourg. However, the refusal to sign the notarial deed had precisely prevented any delivery. The Supreme Court (Cour de cassation) therefore logically quashed the decision.

Note that the solution would be different if the contract had been partially performed: for example, if the buyer had taken possession of the premises or paid a deposit. In that case, it could be considered that there was actual delivery or commencement of performance. But in this case, nothing of the sort.

What This Means for You — Concretely

For sellers: if you sign a preliminary contract (promesse de vente) and the buyer fails to appear before the notary, you cannot sue them before the court of the property's location if that is different from their domicile. You must sue them before their court (the court of their domicile) or, if you can demonstrate partial performance, before the court of the place of that performance. For example, if the buyer had already moved in or paid part of the price, you could try the court of the property's location. But without this, it is the court of the buyer's domicile.

For buyers: this decision protects you. If you are sued for refusing to sign a notarial deed, you can challenge the jurisdiction of the court of the property's location if you have never set foot there and no service has been performed there. You will be judged before your domicile court, which saves you travel costs and potential bias.

Example with figures: imagine a property in Annemasse, worth €300,000. The seller, domiciled in Lyon, sues the buyer, domiciled in Marseille, before the Annemasse court. The buyer raises a plea of lack of jurisdiction: there was no delivery or service. The Annemasse court declares itself incompetent. The seller must then re-sue in Marseille, costing him time and additional fees. To avoid this, the seller should have sued directly in Marseille. Moral: before acting, check the other party's domicile and the existence of performance.

Four Tips to Avoid This Type of Dispute

• Check jurisdiction before suing. Consult a lawyer to determine the competent court. A mistake in jurisdiction can lead to a dismissal of your claim and additional costs. In Saint-Julien-en-Genevois, many sellers mistakenly believe that the court of the property's location is always competent.
• Include a jurisdiction clause in the preliminary contract. You can agree in writing that any dispute will be brought before a specific court (e.g., the court of the property's location). This clause must be very clear and accepted by both parties.
• Keep all evidence of partial performance. If the buyer paid a deposit, took possession of the premises, or started works, these elements may justify the jurisdiction of the court of the property's location. Gather the evidence from the outset.
• When in doubt, opt for the court of the defendant's domicile. This is the safest solution. Admittedly, it may require you to plead far from home, but you will avoid a plea of lack of jurisdiction that would delay the proceedings.

Further Analysis: Related Case Law and Developments

This 1992 decision is part of a line of strict interpretations of Article 46. For example, in a decision of 15 February 2001 (No. 99-10.001), the Supreme Court (Cour de cassation) held that the place of delivery of a property is the place where the property was physically handed over to the buyer, not its location. Similarly, for a service, the place of performance is where the service was actually rendered, not where the contract was concluded.

More recently, the Supreme Court (Cour de cassation) clarified that a jurisdiction clause must be stipulated in a very prominent manner and accepted by both parties (Civ. 1re, 12 July 2012, No. 11-18.538). If it is buried in general terms and conditions, it may be deemed unwritten.

The trend is therefore towards protecting the defendant: the competent court must be the one with a real connection to the dispute. The mere fact that a property is located within a jurisdiction is insufficient if no service has been performed there. For real estate professionals, this means drafting precise jurisdiction clauses and advising clients on which court to sue in.

Checklist Before Taking Action

1. Identify the defendant's domicile. This is the primary criterion. If in doubt, request a K-bis extract (for a company) or a certificate of accommodation.
2. Check whether there has been actual delivery of the goods or performance of a service. Examples: handing over keys, moving in, payment of a deposit, carrying out diagnostics. If so, note the precise place of that performance.
3. Review the preliminary contract (promesse de vente) or contract. Is there a jurisdiction clause? If so, is it clear and prominent?
4. Choose the competent court. In the absence of a clause, you have a choice between the court of the defendant's domicile and the court of the place of performance. If in doubt, prioritise the former.
5. Sue within the time limit. In real estate sales, the limitation period is 5 years (Article 2224 of the Civil Code). Do not delay.

Are you in a similar situation? A 30-minute initial consultation with Maître Zakine (€45) can save you months of proceedings — and often much more. Book an appointment →