Unilateral Promise to Sell: Option Exercise Period Begins After Fulfilment of Suspensive Conditions

You have signed a unilateral promise to sell for a flat in Sète, with a stunning view of the port. The developer granted you one month to exercise the option after the fulfilment of the suspensive conditions: obtaining a building permit, a loan, and no pre-emption. But when exactly does this period begin? A question every owner asks, and which the Court of Cassation decided in 1999.

The judgment of 24 February 1999 (No. 97-15.683) is a reference for all property professionals. It reminds that the option exercise period only runs from the effective fulfilment of the suspensive conditions (i.e., the future and uncertain events on which the sale depends), unless the beneficiary waives them. Without this rule, disputes would be commonplace, especially in high-demand areas like Lunel or Montpellier.

This decision protects both sellers and purchasers. But beware: if you do not respect the period, you risk losing the sale. So, how can you be sure to do it right? Let us decipher this case law together.

The Facts: A Story Like Any Other

Imagine Mr and Mrs Dupont, owners of a plot of land in Sète, who sign on 10 January 1986 a unilateral promise to sell in favour of the SCI Méditerranée. The price is set at €150,000, and the promise is subject to three suspensive conditions: obtaining a building permit, obtaining a loan, and no pre-emption by the municipality. The promise stipulates that the exercise of the option must occur "within one month of the fulfilment of the suspensive conditions, unless the beneficiary waives their benefit." An addendum of 24 November 1986 modifies certain deadlines, but not the key clause.

The suspensive conditions are fulfilled progressively: the building permit is issued in September 1987, the loan is granted on 15 October 1987, and the municipality does not pre-empt. On 20 October 1987, the SCI exercises the option. But the sellers refuse to sign the deed, arguing that the period had not yet started. In their view, the suspensive conditions were only all fulfilled at the end of October 1987, and the exercise of the option on 20 October was therefore premature. The SCI then takes the matter to court.

The Montpellier Court of Appeal rules in favour of the sellers: it finds that the suspensive conditions were only fulfilled during October 1987, and that the SCI did not waive their benefit. Consequently, the exercise of the option on 20 October 1987 is void because it occurs before the starting point of the period. The SCI appeals to the Court of Cassation, but the Court dismisses the appeal on 24 February 1999. In other words, the Court of Appeal's decision is upheld: the option exercise period only runs from the date of fulfilment of the last suspensive condition, unless there is an express waiver.

The Reasoning of the Court — Analysed

The Court of Cassation relies on Article 1134 of the Civil Code (now Article 1103, which sets out the principle of the binding force of contracts). In essence: what is written in the promise is conclusive. Here, the promise stipulated that the exercise of the option must be carried out "within one month of the fulfilment of the suspensive conditions, unless the beneficiary waives their benefit." The judges deduce that the period can only start to run from the moment all suspensive conditions are fulfilled.

In clear terms, if the promise provides that the exercise of the option must occur within a specified period after the fulfilment of the suspensive conditions, that period only begins on the date of fulfilment of the last condition. The judges specify that the waiver of the benefit of the suspensive conditions must be express (in writing and unambiguous). In this case, the SCI had not waived, so the exercise of the option before all conditions were fulfilled was invalid.

What few people know is that this solution is consistent in case law. The Court of Cassation has already ruled similarly in earlier decisions (e.g., Civ. 3e, 12 February 1992, No. 90-15.683). But here, it specifies that the starting point of the period is the date of fulfilment of the last condition, not the date on which the beneficiary becomes aware of it. However, note: if the beneficiary waives the suspensive conditions, they can exercise the option immediately, even before their fulfilment. But this waiver must be clear and unambiguous.

What This Means for You — Practically

For a seller owner: you must be vigilant about the date of fulfilment of the suspensive conditions. If the purchaser exercises the option too early, you can refuse the sale. For example, if you sell a house in Lunel with a suspensive condition of obtaining a loan, and the purchaser exercises the option before the loan is granted, you are entitled not to sign. undefined, I have come across cases where sellers lost sales because they accepted a premature exercise of the option without realising it.

For a purchaser: you must imperatively check the date of fulfilment of each suspensive condition. If you exercise the option too late (after the one-month period), you lose the opportunity to buy. For example, if the last condition is fulfilled on 1 November, you have until 30 November to exercise the option. If you do so on 2 December, the seller can oppose the lapse of the promise.

For property professionals (agents, notaries): this case law requires you to draft promises with a clear clause on the starting point of the period. You must also inform the parties of the date of fulfilment of the suspensive conditions. An oversight can give rise to professional liability.

Four Tips to Avoid This Type of Dispute

• Record in writing the date of fulfilment of each suspensive condition. Keep a tracking table with dates (building permit, loan, pre-emption, etc.). If in doubt, ask your notary to confirm the date.
• Include an express waiver clause in the promise. If you want to be able to exercise the option before all conditions are fulfilled, have a clause drafted allowing you to waive them in writing, by registered letter with acknowledgement of receipt.
• Never exercise the option without being certain that all suspensive conditions are fulfilled. Check with each body (bank, town hall, etc.). Anticipation can be fatal.
• Engage a lawyer specialised in property law. Professional oversight of the drafting of the promise and the monitoring of deadlines can save you years of litigation. In Sète or Lunel, I note that many disputes arise from a poor understanding of the clauses.

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Further Reading: Related Case Law and Developments

This decision is part of a consistent line of the Court of Cassation. For example, in a judgment of 12 February 1992 (No. 90-15.683), the Court had already ruled that the option exercise period only runs from the fulfilment of the suspensive conditions. Similarly, in a judgment of 8 July 1998 (No. 96-18.234), it specified that the waiver of suspensive conditions must be certain and unambiguous. The trend of the courts is therefore to protect legal certainty in contracts: one cannot exercise an option before the conditions justifying it are fulfilled. For the future, it is likely that the case law will remain stable, but beware of legislative developments: the 2016 reform of contract law incorporated these principles into the Civil Code (Articles 1304-4 et seq.).

Summary and Next Steps

What to do if you are the beneficiary of a promise:

1. Identify all the suspensive conditions mentioned in the deed.
2. Monitor their fulfilment and note the date of the last condition fulfilled.
3. If you wish to exercise the option before that date, request an express waiver from the seller, in writing.
4. Exercise the option within the stipulated period (one month, unless otherwise indicated) from the date of fulfilment of the last condition.
5. Keep all supporting documents (letters, certificates, acknowledgements of receipt).

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