Suspensive Condition of Planning Permission: The Purchaser May Waive It

Imagine: you own a plot of land in Saint-Paul-lès-Dax, and you sign a promise of sale with a purchaser. The sale is conditional upon obtaining planning permission. But the permission is refused. Does the sale fall through? Not necessarily. If the clause was drafted in the exclusive interest of the purchaser, he may decide to proceed and buy the land anyway. This is what the Court of Cassation ruled in 1976. This decision, little known to the general public, has concrete consequences for all real estate professionals.

Who ultimately decides whether a suspensive condition is triggered or not? Can the seller require the condition to be fulfilled if the purchaser wishes to waive it? These are questions that arise daily in notarial offices and law firms.

In this article, we decipher this landmark case law and give you the keys to understanding your rights and avoiding disputes.

The facts: a story that happens every day

In 1976, the company Cogeprim, a property developer, signed a promise of sale with sellers, Mr. and Mrs. X. The deed provided that the sale was subject to a suspensive condition: obtaining planning permission for the land. The clause stated that it was stipulated in the interest of the sellers. However, the planning permission was refused by the authorities.

Cogeprim, nevertheless, still wanted to buy the land. It decided to waive the suspensive condition and requested the completion of the sale. The sellers refused, arguing that the condition was intended to protect them and that they no longer wished to sell without permission.

The dispute came before the Paris Court of Appeal. The trial judges analysed the intention of the parties, beyond the terms of the deed. They considered that, despite the mention in the interest of the sellers, the condition had in fact been stipulated solely in the interest of the purchaser. Why? Because the sale price was partly paid by the transfer of a flat to be built, secured by guarantees. Obtaining permission was therefore crucial for the purchaser, not for the sellers who were receiving an already built property.

The Court of Appeal allowed Cogeprim to waive the condition and ordered the forced sale. The sellers appealed to the Court of Cassation.

The reasoning of the court — dissected

The Court of Cassation dismissed the appeal. It approved the Court of Appeal's sovereign assessment of the parties' intention. The reasoning is as follows: a suspensive condition may be stipulated in the exclusive interest of one party. If it is in the interest of the purchaser, he may waive it unilaterally, even if the seller objects. Conversely, if the condition is in the interest of both parties or solely the seller, unilateral waiver is not possible without the seller's consent.

The legal basis is Article 1174 of the Civil Code (old), which provides that any obligation is void if contracted under a potestative condition on the part of the obligor. But here, the condition is not potestative: it depends on an external event (the granting of permission). The waiver, however, is a voluntary act of the purchaser, which is perfectly valid.

This decision is neither a reversal nor an evolution: it is part of consistent case law. It confirms that trial judges have sovereign power to interpret the common intention of the parties, beyond the literal terms of the deed. Thus, a clause may be recharacterised if its actual purpose differs from what it states.

The sellers' arguments were simple: the clause says it is in our interest, therefore we alone can decide. But the Court of Appeal considered that the true interest was that of the purchaser, given the financial structure. The judges therefore gave precedence to the economic reality over the letter of the contract.

What this means for you — concretely

For a purchaser: you sign a promise of sale with a suspensive condition of obtaining planning permission. If the permission is refused, you are not obliged to abandon the project. Check the wording of the clause: if it is in your interest (which is often the case), you can waive it and require the sale. However, be sure to notify your waiver in writing, preferably by registered letter with acknowledgement of receipt, before the deadline for fulfilment of the condition.

For a seller: you cannot oppose the waiver if the clause is in the purchaser's interest. You are then obliged to sell. To avoid surprises, you must require that the clause be drafted to specify that it is stipulated in the interest of both parties, or exclusively in yours. Example: this condition is stipulated in the interest of the seller and the purchaser, so that neither party may waive it without the other's consent.

For a notary or lawyer: the drafting of suspensive conditions must be precise. Ambiguous wording can lead to litigation. Remember to explicitly state in whose interest the clause is stipulated. If the interest is shared, say so. If the purchaser is to be able to waive, provide for it.

Numerical example: in Saint-Vincent-de-Tyrosse, a plot of land is sold for €200,000 subject to obtaining planning permission for a house. The permission is refused. The purchaser, who has already sold his house, still wants to buy. He may waive the condition and compel the seller to sell. Without this case law, the seller could block the sale and the purchaser would lose his purchase.

Four tips to avoid this type of dispute

• Clearly draft the interest of the suspensive condition: in the deed, specify whether the condition is stipulated in the exclusive interest of the purchaser, the seller, or both. Avoid vague phrases like in the interest of the parties.
• Anticipate the possibility of waiver: if you are a seller and you want the condition to be irrevocable, include a clause prohibiting unilateral waiver. If you are a purchaser, ensure you can waive.
• Keep all correspondence: in case of dispute, judges look for the true intention of the parties. Emails, letters, and meeting minutes can be decisive in proving the interest of the clause.
• Have the deed reviewed by a professional: a notary or lawyer specialising in property law can detect ambiguities and advise you on the appropriate drafting for your situation.

Further reading: related case law and developments

The Court of Cassation has reaffirmed this principle on several occasions. For example, in a judgment of 14 November 2001 (n° 99-18.406), it held that the suspensive condition of obtaining a loan was stipulated in the exclusive interest of the purchaser, who could waive it. Similarly, for a condition of obtaining planning permission, the solution is consistent.

Conversely, if the condition is in the common interest, unilateral waiver is not permitted. For example, in a judgment of 20 March 2002 (n° 00-14.739), the Court of Cassation refused the purchaser's waiver of a suspensive condition of obtaining planning permission when that condition had been stipulated in the interest of both parties, in particular to guarantee the buildability of the land.

Thus, the tendency of the courts is to adhere to the letter of the deed, unless external elements demonstrate a contrary intention. For the future, it is advisable to draft with the greatest precision to avoid any risky interpretation.

What you absolutely must remember

FAQ:

• Can I waive a suspensive condition of planning permission? Yes, if the clause is stipulated in your exclusive interest as purchaser. Check the deed.
• Can the seller oppose my waiver? No, if the condition is in your interest. He must sell.
• What if the deed does not specify the interest of the clause? Judges will look for the intention of the parties. It is better to clarify by an addendum.
• What are the risks if I waive without precautions? You could be sued for non-compliance with the condition if the seller contests. It is better to notify in writing.
• Does this case law apply to other suspensive conditions? Yes, the principle is general: obtaining a loan, permission, etc.

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 →