Promise to Sell: An Overly High Payment Can Transform the Agreement into a Firm Sale

You sign a preliminary contract (compromis de vente) for a house in Cernay. The seller gives you a few days to think. To show your good faith, you pay a large sum of money, well beyond the agreed withdrawal penalty (indemnité d'immobilisation). What if, overnight, you are considered definitively bound? That is precisely what the Cour de cassation ruled in 1970: an overly high payment can transform a simple promise into a firm sale.

This question, every owner or buyer asks themselves one day: have I signed a simple promise or a real contract of sale? The answer sometimes turns on a detail, an amount, a gesture. The decision we will analyse will shed light on this crucial point.

The judgment of 9 June 1970 (no. 68-13.616) teaches us that the payment of a sum on account of the sale, the day after the promise, and largely exceeding the amount of the withdrawal penalty, is not a simple exercise of the option. It is a formal acceptance of the entire purchase. The unilateral promise then becomes synallagmatic, i.e., it binds both parties. Consequence: it escapes Article 7 of the Law of 19 December 1963 (now Article 1840 A of the General Tax Code) which imposed certain formalities on pain of nullity. But beware, this rule has its nuances.

The facts: a story like those that happen every day

Imagine a butcher's shop in Cernay, with its business and premises. On 2 December 1964, a document entitled "compromis" was signed. By this deed, the seller promised to sell the building and the business to a buyer. On the same day or the next day, the buyer paid a sum of 120,000 francs on account of the sale price. However, the compromis provided for a withdrawal penalty (dédit) of a much lower amount. By paying such a high sum, the buyer clearly manifested his intention to buy.

Later, the buyer changes his mind and wants his money back. He invokes the nullity of the unilateral promise to sell, on the ground that it was not registered within ten days, as required by Article 7 of the 1963 Law. But the Court of Appeal, upheld by the Cour de cassation, dismisses his claim. For the judges, the payment of 120,000 francs, far exceeding the withdrawal penalty, constitutes a firm acceptance and not a simple exercise of an option. The promise has become synallagmatic: it binds both parties like a definitive sale.

The seller, for his part, argued that the deed was a perfect sale from the outset. The buyer, on the other hand, pleaded the nullity of the unilateral promise. The Court decided in favour of the seller, but on a different basis: it recharacterised the deed as a synallagmatic contract, thus escaping the form requirements of the unilateral promise.

The court's reasoning — dissected

The Cour de cassation relies on the interpretation of the parties' intention. It recalls that the payment of a sum on account of the price, the day after the promise, and for an amount "largely exceeding the amount of the agreed withdrawal penalty", cannot be analysed as a simple exercise of an option. Indeed, in a unilateral promise to sell, the beneficiary has a period to exercise the option. If he pays a sum, it is generally the amount of the withdrawal penalty (indemnité d'immobilisation). But here, the amount paid is much higher: this demonstrates a firm intention to buy, not a mere option.

The implicit legal basis is Article 1101 of the Civil Code (old), which defines a contract as an agreement by which one or more persons bind themselves towards one or more others to give, to do, or not to do something. By transforming the unilateral promise into a synallagmatic contract (which creates reciprocal obligations), the Court makes the deed escape Article 7 of the Law of 19 December 1963. This article required, on pain of nullity, that unilateral promises to sell be registered within ten days of their date. However, a synallagmatic contract is not subject to this formality.

The decision is therefore a confirmation of previous case law: the judge seeks the common intention of the parties beyond the terms of the deed. There is no reversal or notable evolution, but a classic application of contract law. The parties' arguments were clear-cut: the buyer wanted nullity, the seller wanted specific performance. The Court chose a middle path by recharacterising the deed, but the result is favourable to the seller: the sale is perfect.

What this changes for you — concretely

For sellers: if you receive a substantial payment from the buyer shortly after the promise, you can consider the sale firm. You are no longer bound by the withdrawal periods of the unilateral promise. For example, if you sell a flat in Rixheim for €200,000 and the buyer pays you €30,000 the day after the compromis, whereas the withdrawal penalty is only €5,000, you are entitled to require the signing of the notarial deed.

For buyers: be careful with your actions. An overly high payment can bind you definitively. If you pay a sum of money, even as a deposit (acompte), make sure its amount corresponds exactly to the withdrawal penalty provided in the promise. Otherwise, you risk no longer being able to withdraw without losing the entire sum paid.

For real estate professionals: this decision reminds you of the importance of drafting clear deeds. If you wish to leave an option to the buyer, the amount of the withdrawal penalty must be precise and respected. Any additional payment, even if described as a deposit, may be interpreted as an acceptance. Specify in the deed that any payment beyond the withdrawal penalty is considered an irrevocable exercise of the option.

A worked example: in Mulhouse, a promise to sell a business provides for a withdrawal penalty of €10,000. The buyer pays €50,000 "on account". According to this judgment, the sale is perfect. If the buyer withdraws, he loses the €50,000, and the seller can require the signing.

Four tips to avoid this type of dispute

• Never pay a sum greater than the withdrawal penalty before signing the notarial deed. If you want to show your seriousness, pay exactly the amount provided in the promise. Any excess may be interpreted as a firm acceptance.
• Have the promise drafted by a notary or a specialised lawyer. A professional will be able to specify the consequences of any payment and avoid ambiguities. In Cernay, as elsewhere, a well-drafted deed protects you.
• Require a precise written statement of the nature of the sums paid. In the compromis, clearly state that any payment made before the exercise of the option is a withdrawal penalty, and that beyond this amount, it is a deposit on the price constituting a firm sale.
• In case of doubt, consult a lawyer before paying or accepting a sum. A 30-minute consultation can save you months of proceedings. For example, if you are a property owner in Rixheim and your buyer insists on paying a deposit, ask for advice.

Further reading: related case law and developments

The Cour de cassation has maintained this position in subsequent judgments. For example, in a judgment of 28 November 1968 (no. 67-11.968), it had already ruled that the payment of a substantial deposit transformed the promise into a sale. The 1970 decision is in line with this. Courts always seek the real intention of the parties, beyond the terms used.

Since then, the Law of 19 December 1963 was repealed and replaced by Article 1840 A of the General Tax Code, then by current legislation on promises to sell (Alur law, etc.). But the principle remains: a firm commitment can arise from circumstances extrinsic to the written deed. The trial judges have sovereign power to assess the common intention of the parties.

For the future, this case law reminds us to be cautious in real estate transactions. Unilateral promises are common, but a simple gesture can transform them into a definitive sale. Professionals must therefore be vigilant in drafting deeds and in collecting sums.

Frequently asked questions

• Can I get my deposit back if I withdraw after paying a sum greater than the withdrawal penalty? No, according to this case law, the payment of a sum greater than the withdrawal penalty constitutes acceptance of the sale. You are definitively bound. You lose the sum paid and you must sign the notarial deed.
• What should I do if I am a seller and the buyer pays an overly high sum? You can consider the sale firm. Keep evidence of the payment (bank statement, receipt) and require the signing of the notarial deed. In case of refusal, you can take the matter to court.
• Does this decision apply to sales of businesses as well as real estate sales? Yes, the judgment concerns both a building and a business. The reasoning is the same for any type of asset.
• What are the time limits for taking action? If you are a seller and the buyer does not sign, you have 5 years from the date of the perfect sale to take legal action. If you are a buyer and want to annul, you must act quickly, ideally within 5 years.

Are you in a similar situation? A first 30-minute consultation with Maître Zakine (€45) can save you months of proceedings — and often more. Book an appointment →