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Does the invalidity of a preliminary reservation agreement affect the sale agreement?

26/08/2017

In its decision of 27 April 2017, the Cour de cassation continues to define the relationships between preliminary “reservation” agreements and final agreements for the sale of a building upon completion. A couple, who had been canvassed at home to acquire properties sold upon completion, had in this respect executed a reservation agreement covering several plots, and then had signed several months later the notarized deed of sale.

The buyers noted that the agreement did not satisfy any of the public policy requirements applicable to doorstep selling (French Consumption Code, Articles L.121-21 et seq. as drafted after the passing of Act No. 93-949 of 27 July 1993) and invoked the invalidity of the reservation agreement and the invalidity (which they deemed correlative) of the final deed of sale. The third civil chamber of the Cour de cassation upheld the decision entered by the court of appeal, which had considered that, as reservation agreements are optional, their invalidity is of no consequence as regards the validity of the subsequent final deed of sale.

The Cour de cassation thus clearly affirmed the independence of the two agreements. It is necessary to recall that, in such cases, the prospective buyer who made a reservation retains the right to file a criminal suit because of the violation of the rules related to canvassing (French Consumption Code, Art. L.121-23)

Cass. 3rd Civ., 27 April 2017, No.16-15.519

Authors

Picture of Jean Luc Tixier
Jean-Luc Tixier
Partner
Paris