Suspensive Condition in Exclusive Interest of a Party

Extract

[...] The suspensive condition of obtaining a loan has been the subject of a lot of jurisprudence. Thus, this jurisprudence on the ability to rely on the failure of the condition applies in the case of the condition of obtaining a loan. The application of this jurisprudence in the case of the condition of obtaining a loan When a synallagmatic promise of real estate sale is concluded under the condition of obtaining a loan that must be realized before a certain date, the question arises of the ability of the parties to rely on the failure of the condition to produce effect on the contract. [...]

[...] The judges of the law have thus deduced from this observation that the unilateral renunciation of the buyers could only occur within the contractual deadline, the seller being entitled to rely on the exceeding of this deadline to justify that 'the perfection of the sale could not be pronounced ». Thus, allowing the unilateral renunciation of the assignee only before the deadline set by the parties allows for reducing the period of uncertainty. Consequently, the seller does not remain in a waiting situation. Thus, the term of the condition, i.e. the deadline before which the condition must be fulfilled, allows for determining the moment of the default, but also to know when it is possible for the parties to renounce the condition. [...]

[...] Thus, the seller cannot demand any performance if the condition has not been fulfilled. However, after the deadline set to limit the period during which the condition has been fulfilled, the seller can invoke the default of the condition to demonstrate that the obligation is null. In fact, it is logical that in the event of a default of the suspensive condition, the parties are not obliged, as provided for in Article 1304-6 of the Civil Code. Thus, the default of a suspensive condition leads to the caducity of the contract. [...]

[...] Thus, in a judgment of the third civil chamber of the Court of Cassation dated September the Court of Cassation states thatWhen a suspensive condition is stipulated in the exclusive interest of one party to the contract, only that party can renounce it. This is particularly the case with thecondition suspensive of obtaining a loan falling within the provisions of Article L. 312-16 of the Consumer Code ». This jurisprudence is old. In fact, in a judgment of the third civil chamber of the Court of Cassation, dated May the judges noted thatthe suspensive condition inserted in the promise of sale had been stipulated, quite clearly, in the sole interest of the buyer who could renounce it to request the realization of the convention. [...]

[...] The buyers therefore argue that they can validly renounce the suspensive condition, that is to say, the obtaining of the loan. On the other hand, based on the same articles, the applicants argue that if the condition is stipulated solely in their interest, then only they can rely on the consequences of the failure of this condition. They criticize the judgment of the Court of Appeal which allows the sellers to rely on the non-obtaining of the loan. While the suspensive condition is stipulated in the exclusive interest of the buyers, the Court of Cassation had to consider whether the beneficiaries could rely on the consequences of the failure of the condition, following the expiration of the deadline set by the parties. [...]