Promise of sale: when a buyer can sue a third party in good faith

Imagine: you are a property owner in Uzès, you sign a unilateral promise of sale for your mas. A potential buyer pays you a deposit. But before the option is exercised, another buyer appears, offers a higher price, and you sell. The first beneficiary learns of the sale. Can he take action against the second buyer, who is a stranger to the promise? This is exactly the question decided by the Court of Cassation on 8 July 1975.

The answer is yes, subject to conditions: the beneficiary can rely either on fraud or on the fault of the third party who agreed to acquire a property he knew was the subject of a promise. In other words, if the third party knew of the existence of the promise, he commits a fault by buying anyway. And this fault gives rise to civil liability under Article 1382 of the Civil Code (now Article 1240).

What few people know is that this decision, rendered nearly 50 years ago, remains a reference for property professionals and individuals. It enshrines a principle of loyalty in transactions. Let us dissect it together.

The facts: a story that happens every day

In September 1969, the company Copropriété et Réalisations Immobilières (CRI) granted a unilateral promise of sale to the company Pravat for a building. The promise was valid until a certain date, with a deposit. Pravat had an option to purchase. But before the option was exercised, the company Servim intervened: it acquired the same building from CRI, fully knowing of the existing promise. Pravat, seeing itself deprived of its right, sued CRI and Servim.

The beneficiary of the promise (Pravat) sought the annulment of the sale to Servim and damages. It argued that Servim, by buying while knowing that the building had been promised to Pravat, had committed a fault. The first instance court ruled in favour of Pravat. The Court of Appeal affirmed. Servim appealed to the Court of Cassation, but the Court of Cassation dismissed the appeal.

The twist? The Court of Cassation did not merely validate the decision: it laid down a general principle. The beneficiary of a unilateral promise can sue a third party, even if not a party to the promise, if that third party committed a fault with knowledge. This is an extension of tort liability.

The reasoning of the court — analysed

The Court of Cassation relied on Article 1382 of the Civil Code (now Article 1240 since the 2016 reform): "Any act of a person which causes damage to another obliges the person by whose fault the damage occurred to make reparation." In short, if you cause harm to someone by your fault, you must compensate them.

But what is the reasoning? The Court distinguishes two situations. First, fraud: the third party participates in a fraudulent scheme to dispossess the beneficiary. Second, simple fault: the third party knew that the property was promised, and still bought it. In the latter case, there is no necessary intention to harm, but negligence or imprudence. The Court considers that this fault is sufficient to give rise to liability.

However, note: the fault must be proved. The beneficiary must show that the third party had knowledge of the promise. This proof can be provided by any means: witness statements, correspondence, advertising, etc. In the case, Servim could not ignore the promise because it had been informed by notarial deeds and letters.

What is remarkable is that the Court of Cassation does not question the validity of the sale between the owner and the third party. It merely opens the way to damages for the injured beneficiary. This is a pragmatic solution: the third party keeps the property but must compensate the evicted promisee.

undefined, I have encountered cases where owners in Pont-Saint-Esprit sold their house to a third party while a promise was pending. The beneficiaries were able to obtain compensation, but not the annulment of the sale. This is an essential nuance.

What this means for you — practically

For a landlord owner in Uzès who signs a promise: you must honour your commitment. If you sell to someone else, you will be ordered to pay damages to the first beneficiary. These damages may include loss of chance to make a profit, costs incurred, etc.

For a buyer: if you benefit from a promise, you can take action against a third-party buyer who knew of the existence of your promise. You can claim compensation. But you cannot obtain the annulment of the sale, except in cases of proven fraud.

For a co-owner: if your co-ownership signs a promise of sale for a common part, and a co-owner sells to a third party with knowledge, the co-ownership can take action.

Example with figures: Mr Martin, in Pont-Saint-Esprit, signs a promise of sale for his house at €200,000. The buyer pays a €10,000 deposit. Before the option is exercised, a neighbour offers €220,000. Mr Martin sells to the neighbour. The first buyer can sue the neighbour for fault. The court could order the neighbour to pay €20,000 in damages (the price difference) plus costs.

If you are in this situation, you must act quickly. The limitation period is 5 years from the discovery of the damage. Gather evidence of the third party's knowledge.

Four tips to avoid this type of dispute

• Register your promise at the land registry. This makes it enforceable against third parties and prevents an ignorant buyer from being caught. The cost is modest (a few hundred euros) and the deterrent effect is significant.
• Include a penalty clause in the promise. Provide for fixed damages in case of breach by the owner. For example, double the deposit. This discourages temptation.
• Systematically inform any subsequent potential buyers. If you are an owner and receive another offer, mention the existence of the promise in writing. This will prevent the third party from being in good faith and limit your liability.
• Keep all evidence of the third party's knowledge. Letters, emails, witness statements. This is key to establishing liability.

Further analysis: related case law and developments

This 1975 decision is part of a broader movement to protect the rights of the beneficiary of a promise. Before 1975, the Court of Cassation often required proven fraud. With this ruling, it admits simple fault. This is a notable evolution.

Since then, other decisions have clarified the scope. For example, the ruling of the 3rd Civil Chamber of 15 December 2010 (No. 09-70.359) held that a bad faith third party can be ordered to pay damages equivalent to the loss of chance. The trend is therefore towards increased protection of the promisee.

However, note: recent case law requires that the promise be sufficiently certain (price, time limit, conditions). A too vague promise will not allow liability of the third party to be established. So check the validity of your promise.

What you absolutely must remember

FAQ:

• Can I obtain annulment of the sale if the third party knew? No, unless fraud. You will only obtain damages.
• What proof must I bring against the third party? Knowledge of the promise by the third party at the time of purchase.
• What damages can I claim? Loss of chance to make a profit, costs incurred, moral prejudice.
• Is there a time limit to act? Yes, 5 years from the discovery of the damage.
• What if I am the third-party buyer in good faith? You are protected. But if you have been informed, you must withdraw or negotiate with the beneficiary.

Are you 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 →