Promise to Procure and Guarantee: When Your Personal Undertaking is Autonomous and Irrevocable

Imagine: you are selling your flat in Saint-Jean-de-Luz. The buyer, a company, promises you that its bank will grant it a loan. To reassure you, the director of that company signs a "promise to procure" undertaking: he promises that the company will guarantee the loan. Except that the company never gives the guarantee, and the director takes refuge in the nullity of the guarantee. Can you take recourse against him? Yes, answers the Court of Cassation: his personal promise to procure is autonomous, independent of the fate of the guarantee. A lesson for all those who receive or give such promises.

The facts: a story that happens every day

It all starts in the …... group, under judicial reorganisation. The company Interdefi takes over, within the framework of a transfer plan, a SCI called ASSE Durance. The shares of this SCI are held by a SARL and certain individuals. During the transfer of these shares to Messrs. tre, a problem arises: the loans granted to the SCI must be repaid. To secure the transaction, the transferors require that the SCI Y... guarantee the loans. But the SCI Y... hesitates. Then, a protagonist – let us call him Mr X – undertakes personally: he promises to procure the undertaking of the SCI Y... to make the repayments. In clear terms, he promises that the SCI Y... will sign a guarantee. The transfer takes place, but the SCI Y... never gives a guarantee. The creditors turn against Mr X, who invokes the nullity of the guarantee for lack of form. The Court of Appeal nonetheless condemns him. Why? Because his promise to procure is separate, autonomous. Mr X appeals to the Court of Cassation, but the Court dismisses his appeal: it does not matter whether the guarantee is valid or not, the promisor personally promised to obtain that undertaking, and he did not do so. He must therefore compensate the loss.

Reasoning of the court — analysed

The Court of Cassation relies on Article 1203 of the Civil Code (former Article 1119): "One cannot, in general, undertake or stipulate in one's own name except for oneself." But it creates an exception: the promise to procure is a personal autonomous undertaking, distinct from the guarantee it promises to obtain. Concretely, when you say "I promise that my neighbour will sign a guarantee", you are not guaranteeing yourself: you promise to ensure that the neighbour undertakes. If the neighbour does not undertake, you are liable on your personal assets, independently of the validity of the final guarantee. The Court specifies that this undertaking is not subject to the formalities of a guarantee (handwritten mention, proportionality, etc.). This is a confirmation of previous case law, but with a clear affirmation of autonomy. The lower courts had held that Mr X had committed a fault by not doing everything possible to obtain the undertaking of the SCI Y..., and that this fault had caused loss to the creditors. The Court of Cassation validates this reasoning. Caution: if the promisor had obtained the undertaking, but that undertaking was void for lack of form, would the promisor be discharged? The decision does not answer directly, but suggests yes, because he would then have performed his promise.

What this changes for you — concretely

For a landlord owner in Bayonne: if you sell a property and the buyer promises you that a bank will finance it, but the bank withdraws, you can sue the buyer on his promise to procure, even if the loan is not formalised. Example in figures: sale at €300,000, personal contribution of €30,000, promised loan of €270,000. If the loan does not materialise, the seller can claim €270,000 in damages from the person who made the promise.

For a buyer: if you are the one making the promise, know that your undertaking is heavy. You must do everything possible to ensure that the third party undertakes. If you fail, you are liable on your personal assets.

For a co-owner: at a meeting, a member promises that an absent co-owner will sign a guarantee for works. If the co-owner does not sign, the promisor is liable.

In all cases, keep proof of your efforts to obtain the third party's undertaking. Limitation period: the action for contractual liability is 5 years (Article 2224 of the Civil Code) from the date on which the creditor became aware of the breach.

Four tips to avoid this type of dispute

• Require a written and precise undertaking: if you benefit from a promise to procure, have it drafted by a separate deed, with the express mention that the promisor personally obliges himself to obtain the third party's undertaking. Avoid verbal promises.
• Set a deadline: stipulate a final date for the performance of the third party's undertaking. After this deadline, the promisor is automatically in default.
• Provide for a penalty clause: to facilitate compensation, agree in advance on a fixed amount of damages in case of non-performance.
• Check the solvency of the promisor: the undertaking is only valuable if the promisor has the means to pay. Ask for ancillary guarantees (real guarantee, pledge).

Further analysis: related case law and developments

This decision is part of a consistent line: Cass. com., 19 March 1991, n° 89-17.592, which had already held that the promise to procure is a separate personal undertaking. More recently, Cass. 1re civ., 13 December 2017, n° 16-26.747, clarified that the promise to procure is not subject to the validity rules of a guarantee. The trend is therefore towards reinforced autonomy. In the future, courts may extend this logic to other promises (promise to obtain an administrative authorisation, for example). Caution: if the promisor is a legal entity, its directors may be personally liable if they make the promise in their own name.

Frequently asked questions

1. What is the difference between a guarantee and a promise to procure? The guarantor undertakes to pay if the debtor does not pay. The promisor promises that a third party will undertake (guarantee or otherwise). The promisor is not a guarantor; he is liable for his own promise.
2. Can I withdraw after signing a promise to procure? No, the undertaking is irrevocable once accepted by the beneficiary. You must do everything to obtain the third party's undertaking.
3. What loss can I claim if the promisor does not keep his promise? You can claim damages corresponding to the loss of chance of obtaining the third party's undertaking, or the direct loss suffered (example: sale cancelled, expenses incurred).
4. Must the promisor comply with the formalities of a guarantee (handwritten mention)? No, the Court of Cassation exempts him from these formalities. But for evidential purposes, a clear written document is better.
5. What if the third party undertakes but his undertaking is void? Has the promisor performed his promise? Yes, if he obtained an undertaking, even a void one. But caution: case law has not yet decided this precise point. Prefer a valid undertaking.

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