Forfeiture of Deposit Upon Failed Sale Contract Execution
France (FR)
Synthèse Legislator
Généré par l'IAA plaintiff, having agreed to sell property to a purchaser under a contract that stipulated a deposit paid by the purchaser would be forfeited if the final sale deed was not executed by a specific date, sought to recover the deposit after the deadline passed without the sale closing, arguing that the clause imposing forfeiture was a penalty clause rather than a true penalty, which under relevant civil code provisions allowed for judicial mitigation; however, the court ruled against the plaintiff, reasoning that the stipulation constituted a liquidated damages clause—a genuine pre-assessment of damages for non-performance—and that such an agreed-upon indemnity, being a valid contractual commitment, could not be modified by the judge, thereby upholding the forfeiture of the deposit.
Regeste Legislator
Généré par l'IAForfeiture of Deposit Upon Failed Sale Contract Execution: A plaintiff, having agreed to sell property to a purchaser under a contract that stipulated a deposit paid by the purchaser would be forfeited if the final sale deed was not executed by a specific date, sought to recover the deposit after the deadline passed without the sale closing, arguing that the clause imposing forfeiture was a penalty clause rather than a true penalty, which under relevant civil code provisions allowed for judicial mitigation; however, the court ruled against the plaintiff, reasoning that the stipulation constituted a liquidated damages clause—a genuine pre-assessment of damages for non-performance—and that such an agreed-upon indemnity, being a valid contractual commitment, could not be modified by the judge, thereby upholding the forfeiture of the deposit.