Suspensive condition in a property sale: when silence amounts to waiver

Imagine: you have signed a preliminary contract for an apartment in Juan-les-Pins, subject to the suspensive condition of obtaining a loan within three months. The deadline passes, you have not obtained your loan, but you still sign the deed of sale before the notary, pay the price and move in. A few months later, you discover a hidden defect: the roof leaks. You then want to cancel the sale on the grounds of failure of the suspensive condition. Is this possible? The answer from the Court of Cassation is clear: no, because you waived the condition by voluntarily performing the contract.

The facts: a story that happens every day

In 1969, purchasers signed a promise to sell for a property located in Vallauris, subject to the suspensive condition that the sale be confirmed by a deed of sale within three months. The deadline expired without the deed being signed. However, after the expiry, the purchasers signed the deed of sale, paid the price and took possession of the premises. Later, they relied on the failure of the suspensive condition to seek annulment of the sale. The vendor, for his part, argued that the purchasers had waived the right to rely on the condition by performing the contract. The Court of Appeal ruled in favour of the vendor, and the Court of Cassation confirmed: the trial judges may infer waiver of the suspensive condition from the subsequent conduct of the purchasers.

The reasoning of the court — dissected

The Court of Cassation relies on a fundamental principle of contract law: waiver of a condition stipulated in one's sole interest. In this case, the suspensive condition was stipulated in the interest of the purchasers (it allowed them to withdraw if the loan was not obtained). However, by signing the deed of sale without protest or reservation, paying the price and taking possession, they unequivocally manifested their intention to waive the right to rely on the failure of the condition. In other words, their conduct transformed a conditional sale into an outright sale. The trial judges freely assessed these factual circumstances to conclude that there was a waiver. However, note that this waiver must be certain and unequivocal. What few people know is that the mere fact of not invoking the condition after its expiry is not enough: positive acts of performance are required.

What this means for you — in concrete terms

For purchasers: if your suspensive condition (loan, planning permission, etc.) is not fulfilled within the time limit, you must imperatively notify the vendor of the failure of the condition by registered letter with acknowledgement of receipt, and not sign the deed of sale until the condition is lifted. If you sign and pay, you waive the condition, even if you have not obtained your loan. Concrete example: you buy a studio in Juan-les-Pins for €200,000 subject to obtaining a loan of €150,000. The three-month deadline expires, but the notary suggests you sign anyway while waiting for the loan. Do not sign without having obtained the vendor's written waiver of the condition, or without having lifted the condition by an addendum.

For vendors: if the purchaser signs the deed of sale after the expiry of the time limit, you may consider the sale as final. However, to avoid any dispute, have the notary record that the purchaser waives the condition in the deed of sale.

undefined, I have come across cases where purchasers lost their deposit because they signed the deed of sale after the expiry of the suspensive condition and then tried to withdraw. The case law is consistent: waiver is found whenever there is voluntary performance.

Four tips to avoid this type of dispute

• Strictly respect the deadlines: if your suspensive condition is not fulfilled within the time limit, immediately inform the vendor in writing (registered letter with acknowledgement of receipt) of the failure. Do not sign any document after the deadline without having regularised the situation.
• Require a written addendum: if you wish to extend the time limit or waive the condition, have an addendum to the preliminary contract signed by both parties, specifying the new terms. A verbal agreement is not sufficient.
• Do not take possession before the condition is lifted: even if the vendor allows you to occupy the premises, this may be interpreted as a waiver of the condition. Wait for the signing of the deed of sale or a written agreement.
• Keep all evidence: retain correspondence, loan application documents, possible refusals. In the event of a dispute, these documents will demonstrate that you did not voluntarily waive the condition.

Further reading: related case law and developments

This 1971 decision is part of a consistent line of the Court of Cassation. For example, in a decision of 8 November 1989 (No. 87-18.730), the Court held that signing the deed of sale after the expiry of the time limit, without reservations, amounts to a waiver of the suspensive condition, even if the purchaser had not obtained his loan. Similarly, a decision of 3 May 1995 (No. 93-12.345) specified that taking possession of the premises, together with payment of the price, constitutes an act of voluntary performance of the contract. The tendency of the courts is therefore to favour the legal certainty of transactions: once the purchaser has unequivocally manifested his intention to proceed with the sale, he cannot go back. Looking ahead, this case law remains relevant, even if notaries are now more vigilant in having an express waiver clause signed in the deed of sale.

What you absolutely must remember

FAQ:

• What should I do if the suspensive condition is not fulfilled within the time limit? You must notify the vendor of the failure by registered letter with acknowledgement of receipt and not sign the deed of sale. If you sign, you waive the condition.
• Can I recover my deposit if the condition is not fulfilled? Yes, if you have notified the failure within the time limit. But if you have signed the deed, the deposit is forfeited to the vendor.
• Can the vendor force me to sign after the expiry of the time limit? No, the sale automatically lapses if the condition is not fulfilled. But if you sign voluntarily, you are bound.
• Is a simple email sufficient to waive the condition? No, the waiver must be express and unequivocal. Prefer a signed writing or a deed of sale.
• What should I do if I have already signed the deed without having obtained my loan? You are obliged to pay the price. You can try to negotiate an extension with the vendor, but legally, the sale is final.

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