Unilateral Promise to Sell: When Failure to Register Renders It Void (Cass. 1972)

Imagine: you own a bar-tobacco shop in Biarritz, and a buyer appears. You sign a "compromis" which provides that the sale is subject to the buyer obtaining a loan. The buyer pays a sum to your notary. But the loan does not come through, and the sale falls through. Who keeps the money? The answer depends on a technical detail: the qualification of the contract. Was it a unilateral promise to sell or a synallagmatic promise? The difference? The former must be registered within ten days on pain of nullity. The latter, not. A question every owner should ask before signing.

In this case, the judges ruled: it was a unilateral promise, and failing registration, it was void. The buyer therefore recovered his deposit. But it is not always so simple. This ruling, handed down by the Court of Cassation on 24 April 1972, sets out the criteria for distinguishing between the two types of promises. And whether you are in Oloron-Sainte-Marie or elsewhere, the lesson is the same: a simple drafting detail can cost you dearly.

So, how to avoid the trap? Should a promise to sell always be registered? This article dissects the decision and gives you the keys to avoid being caught out.

The facts: a story that happens every day

Mr. X, owner of a business in Biarritz, signs with Mr. Y a deed entitled "compromis de vente". The deed provides that the sale is conditional upon the buyer obtaining a loan, and that if one of the parties does not complete the sale, they must pay a penalty of 30,000 francs (about €45,000 today). The buyer pays a sum to an intermediary (the notary). But the loan is not obtained, and the sale fails. The seller wants to keep the deposit, the buyer claims it back.

Before the court, the central question is: what is the legal nature of the deed? If it is a unilateral promise to sell (the seller undertakes to sell, but the buyer has the choice to buy or not), it must be registered within ten days, otherwise it is void. If it is a synallagmatic promise (both parties mutually undertake), registration is not mandatory. The buyer argues that it is a unilateral promise (therefore void), while the seller argues that it is a valid compromis.

The Court of Appeal of Pau (whose jurisdiction covers Biarritz and Oloron-Sainte-Marie) rules in favour of the buyer: the deed is a unilateral promise, not registered, therefore void. The seller appeals to the Court of Cassation. He argues that the deed contained strictly symmetrical alternative obligations (the penalty), which would make it a synallagmatic promise. But the Court of Cassation dismisses the appeal: the lower judges had sovereignly found that the buyer had merely reserved the right to acquire, and that the payment of funds was merely an acknowledgement of the offer. No symmetry, therefore unilateral promise.

The reasoning of the court — dissected

The Court of Cassation relies on Article 1840-A of the General Tax Code (CGI) — now Article 1589-2 of the Civil Code — which requires registration of unilateral promises to sell within ten days of their signature, on pain of nullity. But the deed must first be characterised. The judges recall that qualification depends on the intention of the parties, which they assess sovereignly (without review by the Court of Cassation).

In this case, the promise was conditional upon the buyer obtaining a loan. However, a suspensive condition does not prevent qualification as a unilateral promise if the buyer retains the freedom not to acquire. Here, the judges found that the buyer had "reserved the right to acquire" — this is the key criterion. The payment of funds to an intermediary was not considered an undertaking to buy, but merely an acknowledgement of the seller's offer. And above all, the alternative obligations (pay a penalty or complete the sale) were not "strictly symmetrical": the seller was obliged to sell, but the buyer could choose not to buy by paying the penalty. No perfect reciprocity.

The decision confirms consistent case law: for a promise to be synallagmatic, both parties must be symmetrically bound. If one retains an option, it is a unilateral promise, with the registration requirement. Here, the Court of Cassation validates the lower judges' analysis: it is a question of fact, left to their assessment. In practice, this means that the seller cannot circumvent the rule by adding a penalty clause — it all depends on the balance of obligations.

What this means for you — practically

For the seller of a business: If you sign a unilateral promise without registering it within ten days, it is void. You cannot keep the deposit if the sale fails. Example: in Oloron-Sainte-Marie, a seller receives a €10,000 deposit. If the buyer's loan is refused and the promise is not registered, the buyer gets it all back. To be protected, insist on a synallagmatic deed (compromis) or register the promise.

For the buyer: You have every interest in checking that the promise is registered. If it is not, and you wish to withdraw, you can invoke nullity. Caution: if you pay a deposit and the promise is void, you can recover it, but the seller may claim damages if he proves abuse. In practice, have the deed registered as soon as it is signed.

For the real estate professional (notary, agent): This decision reminds you of your duty to advise. If you draft a unilateral promise, you must inform the parties of the registration requirement and the consequences of failure. A breach may render you professionally liable. In Biarritz, a notary was held liable for failing to register a promise — the seller lost €50,000.

Time limit to remember: 10 clear days from signature. Amount: registration fee is about €125 (fixed rate). Do not neglect this formality.

Four tips to avoid this type of dispute

• 1. Have the deed qualified by a professional before signing. A notary or lawyer will tell you whether it is a unilateral or synallagmatic promise. Do not rely on the title "compromis" — only the content matters.
• 2. Systematically register any unilateral promise within 10 days. Even if you think it is a compromis, it is better to register as a precaution. The cost is minimal (€125) and avoids nullity.
• 3. Check the symmetry of obligations. If one party has an option (for example, to pay a penalty to withdraw), the deed is probably unilateral. For a reciprocal undertaking, obligations must be perfectly symmetrical.
• 4. Keep proof of registration. Request a receipt from the tax office. In case of dispute, you can prove that you complied with the formality.

Further reading: related case law and developments

This 1972 decision is part of a consistent line. An earlier decision (Cass. civ. 3e, 15 February 1971) had already held that a promise to sell subject to a suspensive condition of obtaining a loan was unilateral if the buyer was not obliged to acquire. More recently, the Court of Cassation (3e civ., 20 May 2014, No. 13-16.820) clarified that a penalty clause does not transform a unilateral promise into a synallagmatic promise if it does not create a reciprocal obligation to buy and sell.

The trend is towards strictness: judges examine the economic substance of the contract. If one party retains the freedom not to contract, it is a unilateral promise, with the registration requirement. Since 1972, the law has not changed on this point (Article 1589-2 of the Civil Code replaces former Article 1840-A of the CGI). However, the Court of Cassation has relaxed the sanction: nullity is not automatic if the buyer has already exercised the option (Cass. 3e civ., 13 July 2016, No. 15-17.880). But for promises not exercised, registration remains mandatory.

Key points to remember

FAQ:

• What is a unilateral promise to sell? It is a contract by which the seller undertakes to sell, but the buyer has the choice to buy or not (cooling-off period).
• Why must it be registered within 10 days? For tax reasons: to allow the authorities to tax any capital gain. Failure to register renders the promise void.
• What if I have signed an unregistered promise? If you are the buyer and wish to withdraw, you can invoke nullity to recover your deposit. If you are the seller, you can attempt to register the deed late (with penalties), but nullity is likely.
• Is a "compromis de vente" always synallagmatic? No, the name given to the deed does not determine its nature. Only the content of the obligations matters. A "compromis" may be a unilateral promise if the buyer is not bound.
• Can I recover my deposit if the promise is void? Yes, in principle. But the seller may claim damages if he proves that you abused the nullity (for example, if you withdrew in bad faith).

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