Suspensive Condition: Who Must Prove That the Bank Loan Was Prevented?

Imagine yourself in Capbreton, facing the ocean, ready to sell your family home. You have found enthusiastic purchasers, Mr and Mrs Martin, who want to settle in the Landes. The preliminary sale agreement is signed, with an essential clause: the sale is subject to them obtaining their bank loan. But weeks go by, the loan does not come through, and the sale risks falling through. Who is responsible? Who must prove that the loan was prevented?

This situation is one I encounter regularly in my practice in Mont-de-Marsan, whether for sales in Dax, Capbreton, or in the villages of the Landes. Both owners and purchasers ask the same question: when a suspensive condition (a condition that suspends the effects of the contract until its fulfilment) is not met, who must provide proof of fault?

The urbanisme-voisin-prefond-personnel" class="internal-link" title="Violation du PLU : quand un voisin peut-il vous attaquer pour non-respect des règles d'urbanisme ?">Cour de cassation answered clearly in 1992 in a ruling that remains authoritative today. This decision, technical in appearance, has very concrete consequences for all those who sell or purchase a property. But what exactly does it change for your daily life?

The Facts: A Story That Happens Every Day

Let's go back to 1992. Mr and Mrs Y..., a couple of purchasers, wish to purchase a property. As is often the case, they do not have all the funds and must obtain a bank loan. The preliminary sale agreement they sign with the seller therefore contains two suspensive conditions: first, obtaining a bank loan; second, a condition relating to the property's compliance with certain technical specifications.

Time passes. The bank loan does not come through. The seller, impatient to conclude the sale, decides to serve formal notice on the purchasers. According to him, it is Mr and Mrs Y... who have not taken the necessary steps to obtain their loan. In other words, they would have prevented the fulfilment of the suspensive condition. The purchasers, for their part, claim to have done everything to obtain the loan, but that the bank refused their application.

The dispute goes all the way to the courts. The court of appeal, seized of the matter, will render a decision that will be challenged before the highest French court: the Cour de cassation. The central question is simple: who must prove that the suspensive condition was not fulfilled because of the other party? The seller who claims that the purchasers did not take the necessary steps? Or the purchasers who claim to have tried everything?

undefined, I have encountered cases where this situation repeats: an owner in Dax accusing the purchaser of not having seriously sought a loan, an investor in Mont-de-Marsan believing that the seller concealed defects affecting the suspensive condition. Each time, the same question arises: where does the burden of proof lie?

The Court's Reasoning — Analysed

The Cour de cassation, in its ruling of 15 December 1992, will decide clearly and definitively. The judges recall a fundamental principle of the law of obligations: when an obligation is entered into under a suspensive condition, it is up to the creditor (the one entitled to performance of the obligation) to prove that the debtor (the one who must perform the obligation) prevented the fulfilment of this condition.

Concretely, in our case: the seller is the creditor of the obligation to purchase (he is entitled to have the purchasers buy his property). The purchasers are the debtors of this obligation (they must buy the property). The suspensive condition is obtaining the bank loan. Therefore, according to the Cour de cassation, it is up to the seller to prove that the purchasers prevented the obtaining of the loan.

The court of appeal had made an error by reversing this burden of proof. It had required the purchasers to prove that they had taken the necessary steps to obtain the loan. However, the Cour de cassation recalls that it is the opposite: it is up to the seller, in his capacity as creditor, to provide proof that the purchasers did not do what was necessary.

This reasoning is based on general principles of the Civil Code, particularly on the distribution of the burden of proof. In short, the one who alleges a fact (here, the seller who claims that the purchasers prevented the condition) must prove it. However, be careful: this does not mean that the purchasers have no obligation. They must act in good faith and take the necessary steps. But it is up to the seller to prove that they did not do so.

The Cour de cassation goes further: it also examines the second suspensive condition, relating to the property's compliance. Here again, it criticises the court of appeal for not having sufficiently justified its reasoning. What few people know is that this decision confirms a consistent line of case law: the burden of proof always lies with the one who invokes the bad faith or fault of the other party.

What This Changes for You — Concretely

If you are a property owner selling in Capbreton or elsewhere in the Landes, this decision has direct consequences. Imagine: you are selling your flat in Dax for €200,000, with a suspensive condition for a loan. The purchaser fails to obtain their financing. You think they have not seriously sought it. Before acting, remember: it is up to YOU to prove that they prevented the obtaining of the loan. How? By gathering concrete evidence: witness statements, letters, proof that they did not submit a complete application, that they refused reasonable loan offers.

If you are a purchaser, this decision protects you. You do not have to prove that you tried everything to obtain the loan (even if, in practice, it is prudent to keep records of all your steps). It is up to the seller to demonstrate your bad faith. undefined, I always advise my purchaser clients to keep written records of all their banking steps: loan applications, refusals, counter-offers. This can be useful if the seller challenges your good faith.

For property professionals (estate agents, developers), this decision requires increased vigilance in drafting preliminary agreements. A poorly drafted suspensive clause can create costly disputes. I regularly see cases where the suspensive condition is formulated too vaguely, which complicates proof. A concrete example: in Mont-de-Marsan, a developer had inserted a suspensive condition on "obtaining a loan on reasonable terms". Too vague! The seller could not prove that the purchaser had refused a reasonable offer.

Time limits are also to be considered. If you are a seller and suspect the purchaser of bad faith, act quickly. In a recent case in Capbreton, a seller waited 4 months before challenging. Result: proof was more difficult to provide, and he lost his case. Generally count 1 to 2 years of proceedings in case of dispute, with legal fees that can reach €3,000 to €6,000 depending on complexity.

Four Tips to Avoid This Type of Dispute

• Draft precise and measurable suspensive conditions: Instead of "obtaining a loan", specify "obtaining a loan of an amount of X €, over a term of Y years, with a maximum rate of Z%". This facilitates proof in case of dispute.
• Keep all written evidence of your steps: Whether you are a seller or purchaser, keep emails, registered letters, bank receipts. In a case in Dax, a purchaser was able to prove his good faith thanks to his 5 documented loan applications.
• Set clear and realistic time limits: Indicate in the preliminary agreement a precise deadline for obtaining the loan (for example, 45 days). This avoids situations where one party unduly delays.
• Consult a specialised lawyer before signing: One hour of consultation (about €150) can save you thousands of euros in dispute. I see too many standard preliminary agreements that do not sufficiently protect the parties.

Besoin d'un conseil personnalisé ? Contactez Maître Zakine — première consultation 30 min à 45€.

Further Analysis: Related Case Law and Developments

The 1992 ruling fits into a consistent line of case law of the Cour de cassation. Already in 1985, in a famous ruling, the Court had affirmed that "the one who relies on the bad faith of their contracting party must provide proof of it". This position has been confirmed many times, notably in decisions concerning property sales with complex suspensive conditions.

More recently, in 2015, the Cour de cassation recalled this principle in a case where a purchaser was accused of having deliberately caused a suspensive condition relating to obtaining a building permit to fail. The judges required the seller to prove the purchaser's bad faith, which he could not do.

The trend of the courts is clear: they protect the security of transactions by requiring solid evidence before declaring a contract null for non-fulfilment of a suspensive condition. What this means for the future? Parties must increasingly anticipate and document their steps. Judges are demanding regarding proof, especially in regions like the Landes where the property market is dynamic.

undefined in Mont-de-Marsan, I observe that the tribunaux de grande instance of Dax and Mont-de-Marsan apply this case law strictly. They reject sellers' claims that do not present concrete evidence of purchasers' bad faith.

Checklist Before Acting

You are a seller and the purchaser has not obtained their loan? Ask yourself these questions:

1. Do you have written proof that the purchaser refused a reasonable loan offer? (An email, a letter, a bank witness statement)
2. Can you demonstrate that the purchaser did not submit a complete application to the banks? (List of banks contacted, dates of steps)
3. Was the suspensive condition sufficiently precise in the preliminary agreement? (Amount, term, maximum rate clearly indicated)
4. Did you respect the time limits for challenging? (Generally, you must act quickly after the condition's deadline)
5. Did you consult a specialised lawyer before initiating proceedings? (A preliminary analysis can save you a lost case in advance)

If you answer "no" to most of these questions, your chance of success in court is low. It is better to negotiate an amicable resolution or a new preliminary agreement with another purchaser.

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