Suspensive term: expiry suffices, no need for a condition

Imagine: you are selling your house in Roye, in the Somme. The deed provides that the price will be paid in two instalments: €500,000 on signing, and the balance of €500,000 “as soon as the building permit is obtained” for a project on the second phase of works. Months pass, the permit does not arrive. You wait, you chase, but nothing. After a year, you decide to demand full payment. The buyer argues that the permit has not been obtained, so the term has not expired. But you believe he is deliberately delaying. What can you do? This question, faced by every property owner confronted with a dragging deadline, found a clear answer in a judgment of the Court of Cassation of 1 July 1971. Without waiting, the High Court ruled: when the term is stipulated to defer the performance of an obligation (referred to as a suspensive term), the judge who finds that the term has expired does not have to check whether the conditions of Article 1188 of the Civil Code (which allows forfeiture of the term in case of reduction of guarantees or bankruptcy) are met. In short, the mere passage of time is enough to make the obligation enforceable.

The facts: a story like many others

In this case, a property owner, Mr X, had granted a company permission to build over his land. In return, the company had to pay one million old francs. The first 500,000 francs were payable in cash, and the last 500,000 “as soon as the building permit relating to the second phase of works is obtained”. The building permit for this second phase was never issued. The company argued that the term had not expired, and therefore it did not have to pay. Mr X, for his part, considered that the company had delayed obtaining the permit, and that the term should be deemed to have expired. The case went to court. The Court of Appeal ruled in favour of Mr X, holding that the term had expired and the company had to pay. The company appealed to the Court of Cassation, arguing that the judges should have considered whether one of the conditions of Article 1188 of the Civil Code (forfeiture of the term) was met, for example whether the company had reduced its guarantees or was bankrupt. The Court of Cassation dismissed the appeal, stating that when the term is stipulated to defer the performance of an obligation (suspensive term), its expiry is sufficient to make the obligation enforceable, without needing to consider the conditions of Article 1188.

The court's reasoning — dissected

The judges’ reasoning is inexorable. It is based on a fundamental distinction between two legal concepts: term and condition. A term (Article 1185 of the Civil Code) is a future and certain event (a date, a deadline). A condition (Article 1168 of the Civil Code) is a future and uncertain event (obtaining a permit, completing a project). In our case, the clause “as soon as the building permit is obtained” is a suspensive term: the permit will eventually be obtained (or not), but the date is uncertain. However, the Court of Cassation considered that the trial judges could find that the term had expired, without applying Article 1188. Why? Because Article 1188 concerns forfeiture of the term, i.e., loss of the benefit of the term by the debtor due to his fault (for example, if he reduces his guarantees). But here, it was not a matter of forfeiture of the term: the term had simply expired, because a reasonable time to obtain the permit had passed. The Court therefore held that Mr X’s claim was not a claim for forfeiture of the term, but a claim for performance of the obligation at its normal maturity. In other words, the judge does not have to consider whether the debtor was at fault: it is sufficient that the term has arrived for the creditor to demand payment. This solution is a confirmation of previous case law: it is neither a reversal nor an evolution, but a simple application of classic principles. The company’s arguments (need to prove fault) were dismissed on the ground that the judge did not have to consider the conditions of Article 1188.

What this means for you — in practice

In practice, this decision has practical implications for various profiles. If you are a landlord in Doullens, and you have provided in a commercial lease that the rent will be revised “as soon as the building permit is obtained” for works, you can demand the revision as soon as a reasonable time has passed, without having to prove that your tenant delayed matters. If you are a purchaser of a building plot in Roye, and the seller has stipulated that the price will be paid “upon obtaining the building permit”, you will have to pay as soon as the permit is obtained, even if you believe the seller delayed. If you are a co-owner, and the by-laws provide for a contribution to charges “as soon as the works are completed”, you can demand payment as soon as the works are finished, without debate about delays. Let's take a numerical example: a seller in Doullens transfers a plot for €200,000, with €100,000 payable “as soon as the building permit is obtained”. If the permit is obtained after 18 months, the purchaser must pay, even if he disputes the date. If you are in this situation, you must check whether the clause is a term (certain event) or a condition (uncertain event). If it is a term, the mere passage of time suffices. Be careful: if the term is not specified (for example “within a reasonable time”), the judge will have discretion. In our example, if the permit is never obtained, the term cannot expire, and the obligation does not become enforceable. But if the permit is obtained, payment is due immediately.

Four tips to avoid this type of dispute

• Draft the type of clause clearly: Distinguish in your contracts between a suspensive term (certain event) and a suspensive condition (uncertain event). Use phrases like “payable on the date of...” for a term, and “payable subject to...” for a condition.
• Set a maximum deadline: If you use a suspensive term, add a cut-off date: “payable no later than 31 December 2025” or “within 12 months of signing”. This avoids interpretations of what is a reasonable time.
• Include a forfeiture clause: If you fear the debtor will delay the event, insert a clause providing that the term will be deemed to have expired if the debtor does not take all necessary steps. For example: “the term shall be deemed to have expired if the purchaser has not filed the permit application within 3 months”.
• Document the steps: Keep a written record of all steps (letters, emails, reminders). In case of dispute, you will be able to prove that the time was reasonable or that the debtor acted in bad faith.

Further reading: related case law and developments

This decision is part of a consistent line of the Court of Cassation. For example, a judgment of 15 May 1973 (No. 72-10.123) held that the judge does not have to consider whether the debtor committed a fault to find that a suspensive term has expired. On the other hand, for suspensive conditions, case law is more nuanced: the judge can assess whether the condition is fulfilled, and delay in its fulfilment may be sanctioned on the basis of good faith (Article 1104 of the Civil Code). The current trend is towards protecting the creditor: judges do not require proof of fault for the term to be considered expired. In the future, this solution should be maintained, as it simplifies disputes and avoids costly debates on the conditions of Article 1188.

Frequently asked questions

1. What is the difference between a suspensive term and a suspensive condition? A term is a future and certain event (e.g., a date), a condition is a future and uncertain event (e.g., obtaining a permit). A term makes the obligation enforceable at its expiry, without additional condition.
2. Can I demand payment if the term is not specified? Yes, if the judge considers that a reasonable time has elapsed. But it is better to set a date in the contract.
3. What if the debtor deliberately delays the event? You can invoke bad faith (Article 1104 of the Civil Code) and claim damages, but this requires proof.
4. Does this decision apply to leases? Yes, to any suspensive clause in a contract (sale, lease, loan).
5. What is the time limit to act? For payment, the limitation period is 5 years (general rule). Act as soon as the term seems to have expired.

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