4.7 / 5 ( 23 votes ) How long does a commercial agreement last?
A buyer is charmed by your property, and you want to sell it as soon as possible. But before you can sign the authentic deed of sale, you will have to wait a little longer. But how long does a commercial agreement last? PropriLib explains it to you.
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What is a commercial agreement?
Before signing the authentic deed with the notary, the buyer and seller agree on a sales contract. This document is often referred to as a pre-sale contract since it precedes the signing of the authentic deed. This bilateral promise of sale corresponds to an agreement on the object and the price between the parties involved in the sale of real estate (articles 1583 and 1589, paragraph 1 of the Civil Code):
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“The sales contract is valid as long as there is agreement on the object and the price.”
This agreement constitutes a sale as it represents a firm and definitive commitment from both the buyer and the seller. Thus, the sales agreement differs from the promise of sale, which, on the other hand, commits the seller to sell at a fixed price.
To formalize a sales contract, you have two options:
— The first is to create a private deed, which is a document established and signed by the parties.
— The second option is to create an authentic deed (optional unlike the authentic deed of real estate sale), which is a document established and signed by the parties through a notary’s intermediary.
The sales contract must be created in as many signed originals with identical content as there are parties to the contract.
It is becoming increasingly common to be offered an electronic signature when concluding a sales contract.
In principle, it is customary to pay a deposit called a security deposit on the sale when signing a preliminary agreement. This amount, deducted from the sale price at the time of signing the final deed, is generally between 5 and 10% of the sale price of the property.
How long is a commercial agreement valid?
After this description and to confirm your understanding of the sales agreement, we arrive at what interests you… the duration! In general, the maximum duration of the sales contract is 3 months. However, this duration may be
extended when the buyer does not need to resort to credit. Thus, we can say that the duration of a sales contract ranges from 2 to 3 months.
The maximum duration of the sales contract is set by the buyer and the seller and mentioned in the latter under the deadline of the title. This timeframe takes into account the various clauses inserted in the agreement. It is possible to extend the duration of a sales contract or modify it by mutual agreement between both parties to the contract.
After this deadline, if the deed of sale is not signed by one of the parties and no modification provides for an extension of the contract, the notary initiates legal action for breach. Conversely, they are allowed to sign the authentic deed upon the expiration of this deadline if there are no objections. An exception exists when the stipulated deadline does not allow for the fulfillment of all the clauses of the agreement; in this case, the notary may choose to move the date of signing the deed of sale.
Can one withdraw from a sales contract?
Since August 8, 2015, and the Macron law of August 6, 2016, the buyer’s withdrawal period within the framework of a sales contract has been extended from 7 to 10 days. The tenth day may not be a Saturday, Sunday, or public holiday, so the period extends until the next business day. The buyer, in case of withdrawal within this period, is not required to compensate the seller. Nevertheless, the deposit paid at the time of signing the agreement is refunded to the buyer. The seller, on the other hand, does not benefit from this right of withdrawal.
Suspensive and resolutory clauses:
Once the withdrawal period has been respected, the suspensive and resolutory clauses attached to the sales contract can slow down the procedure. Among these clauses, we find:
— the loan acquisition clause for which a minimum period of one month after the signing of the sales contract must be respected. A period of two months is often observed for this clause, allowing one month for loan applications with banks and one month for the release of funds.
— the preemption clause of a local authority involving a period of three months during which the community can assert its right of preemption, thus allowing it to recover the property.
— the clause related to the sale of real estate making the validity of the sales contract contingent upon the buyer’s sale of their property.
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