Court of Cassation Ruling on Pre-contractual Negotiations

Extract

[...] It is a judgment of cassation relating to the lifting of the option right during a reflection period in the context of a promise of sale. In this case, two spouses entered into a promise of sale signed in private handwriting on 21 May 1987 and left the buyer until 31 May 1991 to decide on the purchase of the house or not. The husband died in 1989 and the buyer decided to buy in 1990 and exercised the option on 1er November 1991. [...]

[...] However, these rules are only valid if the contract is signed. In our case, no contract had been signed, we were only at the negotiations, therefore the Court of Appeal cannot apply the rules related to contracts when no contract has been signed. Today, the new Article 1102 of the Civil Code states that 'each person is free to contract or not to contract', this article is a result of the 2016 ordinance reforming contract law and was therefore not in force at the time of the facts of the dispute under our analysis. [...]

[...] Therefore, it will be necessary to analyze the lighter legal framework set for pre-contractual negotiations rather than for the contract itself but we will also see that this legal framework allows for a greater extent of contractual freedom especially since the reform A. A lighter legal framework set for pre-contractual negotiations rather than for the contract The term 'pre-contractual negotiation' does not refer at all to the same notion as the 'contract'. These two notions refer to two different stages and two different regimes of law of obligations. By negotiations, one understands a period during which the parties begin to discuss the possibility of a future contract, a kind of bargaining phase where the parties do not intend to encircle themselves. [...]

[...] It is a judgment of cassation relating to the principle of free withdrawal of the offer. In this case, the applicant signed a purchase proposal through an intermediary and then decided to retract. She therefore sent a registered letter on 26 June 2000. However, the spouses (sellers of the building) had signed the proposal so that the building would be sold and sent this decision by registered letter on 27 June 2000. The dispute arose and the Court of Appeal of Pau was seized by the applicant. [...]

[...] First, they claim the principle of contractual freedom, which would imply the freedom to break off the negotiations, and since no fault is characterized, the Court of Appeal would have deprived its decision of a legal basis. Then they argue that their fellow negotiator cannot reproach them a fault, since it is he who had to ensure the smooth running of the negotiations and the respect of the conditions. It then falls to the commercial chamber of the Court of Cassation to determine whether the rupture of negotiations without informing the potential co-contractors constitutes a fault or an abusive rupture? [...]