In the context of commercial transactions and property transfers, the preliminary sales contract stands out as a pillar of negotiations, but also as an area of interpretations and legal complexity. In this article, we aim to thoroughly analyze the significance and implications of the preliminary sales contract in light of the relevant legislation and case law.
Contents
What Does the Preliminary Sales Contract Mean?
The preliminary sales contract (bilateral promise of sale and purchase) is defined as a contract in which both parties, called the promising seller and promising buyer, agree to conclude, in the future and at a fixed price, the sale and purchase contract concerning the good that is the subject of the agreement.
Purpose and Importance of the Bilateral Promise of Sale and Purchase
The parties enter into the preliminary contract with the aim of entering into a future contractual relationship, specifically to sell/purchase a good.
However, there are numerous practical situations in which the conclusion of the sale and purchase contract can no longer occur because one of the parties fails to fulfill its obligations. Most preliminary sales contracts contain clauses regarding the refund of the price advance or the payment of damages in case one of the parties fails to comply with the obligations undertaken in the preliminary contract.
Legal Implications in Case of Non-Performance of Obligations
In this regard, we aim to analyze whether the preliminary sales contract constitutes an enforceable title for the recovery of the price advance paid by the promising buyer, or to oblige the other party to pay the damages pre-established by the preliminary sales contract (penalty clause). Specifically, the issue is whether the signatory of a preliminary sales contract can directly address a bailiff to recover the price advance paid or obtain the financial compensation stipulated in the preliminary sales contract.
Does the Preliminary Sales Contract Have an Enforceable Character for Refund of the Price Advance or Payment of Damages?
In our opinion, the answer to this issue is negative, as the preliminary sales contract cannot be enforced without a court decision, for the refund of the price or any other sum established through a penalty clause. The creditor’s right cannot be directly enforced based on the preliminary sales contract, but only through the liability arising from the non-culpable non-performance of the assumed obligations.
More specifically, if one of the parties does not respect and fulfill its obligations under the preliminary contract, the other party must address a court to request the resolution of the preliminary contract (cancellation of the preliminary contract), and only after the resolution can the right to request the refund of the price or related damages arise.
Legal Arguments Supporting Our Opinion
We will explain the reasons why we support this opinion:
- The preliminary sales contract does not have its own regulation as an enforceable title, as is the case with other contracts provided by civil legislation.
The law expressly provides cases in which contracts can be directly enforced, but in the case of the preliminary sales contract, it does not provide for this possibility.
2. According to Article 632 of the Civil Procedure Code:
(1) Enforcement can only be carried out based on an enforceable title.
(2) Enforceable titles are the executive decisions mentioned in Article 633, provisional enforcement decisions, final decisions, and any other judgments or documents that, according to the law, can be enforced.
According to Article 638 of the Civil Procedure Code:
(1) The following are also enforceable titles and may be enforced: (…) 2. authentic documents;
According to article 639 of the Civil Procedure Code: “(1) A notarized document that establishes a certain, liquid, and due claim constitutes an enforceable title. In the absence of the original, the enforceable title may be the duplicate or certified copy from the notary’s archive.”
According to article 101(1) of Law 36/1995 on Notaries and Notarial Activities: “(1) The notarized document that establishes a certain and liquid claim has the power of an enforceable title upon its due date.”
From the above legal texts, it follows that the notarization of the preliminary sales contract does not automatically allow its enforcement. The notarized preliminary contract is an enforceable title only if it establishes a certain, liquid, and due claim and only from the due date of the claim.
3. According to article 1516 of the Civil Code:
(2) When, without justification, the debtor fails to perform the obligation and is in delay, the creditor may, at their choice, and without losing the right to damages if owed:
1. request or, as the case may be, proceed with the forced execution of the obligation;
2. obtain, if the obligation is contractual, the resolution or termination of the contract, or, as the case may be, the reduction of their own corresponding obligation;
Therefore, if one of the parties does not respect and fulfill the obligations assumed in the preliminary contract, according to article 1516 of the Civil Code, the other party may request the resolution of the contract.
4. In relation to the above, the claim regarding the refund of the price advance or the damages pre-established in the preliminary contract becomes certain, liquid, and due only after the resolution of the preliminary sales contract.
The preliminary sales contract does not constitute a certain, liquid, and due claim because this claim is conditioned by the resolution of the contract.
Therefore, the interested party will request the resolution of the contract, proving that the other party has culpably failed to fulfill its obligations, and only after the resolution of the contract and the determination of the other party’s culpable non-performance will the claim for the refund of the price or damages pre-established in the preliminary contract arise.
The creditor’s claim regarding the refund of the price and the penalty clause compensation does not arise based on the preliminary contract, but based on contractual liability for the culpable non-performance of the agreement in the resolution action. This claim cannot be directly enforced based on the preliminary sales contract through forced execution.
The judicial executor does not have the competence to establish fault for non-performance of a contract, nor does it have the authority to order the resolution of the contract. Therefore, until the contract is resolved judicially, the sale-purchase antecontract cannot be enforced for the claim involving the refund of the price or for any claim regarding contractual damages.
In conclusion, if you are being subject to forced execution based on a sale-purchase antecontract that has not been resolved and without fault for non-fulfillment of obligations being established, the execution is unlawful, and you have the option to file an objection to the execution, requesting the annulment of the enforcement and all acts performed under the enforcement case.
Court Rulings Supporting Our Opinion
In line with our opinion, there are several court rulings that have established that the sale-purchase antecontract does not have executive character for the refund of the price advance or for the payment of damages, such as:
1. Civil Decision No. 1617R/2009 from 16.10.2009, issued by the Bucharest Tribunal:
“According to the provisions of art. 379 para. (1) of the Civil Procedure Code, no enforcement can take place unless the claim is certain, liquid, and due, and according to paragraph (3) of the same article, a certain claim is one whose existence results from the very act of claim or from other acts, even non-authentic, issued or recognized by the debtor. Based on the legal provisions mentioned above, it is concluded that the sale-purchase antecontract signed by the parties cannot constitute an enforceable title for the requested claim, as the antecontract does not establish the culpable non-performance of the obligations assumed by the parties, and this requires the engagement of contractual liability through judicial action for the resolution of the antecontract, along with the obligation to return the performed payments and pay any damages.
Therefore, the claim for the refund of the price advance cannot be directly enforced based on the sale-purchase antecontract through forced execution, as it can only arise through contractual liability for the culpable non-performance of the agreement, within the resolution action, and thus the legal condition for starting the forced execution—i.e., the certainty of the claim—has not been met.”
2. Civil Ruling No. 2476/2021 from 13.04.2021, issued by the Cluj-Napoca Court:
“The court notes that, according to art. 638 CPC, authentic documents are enforceable titles and can be enforced, and the act authenticated by the notary public, which acknowledges a certain, liquid, and due claim, constitutes an enforceable title, according to art. 639 CPC. The same regulation is included in art. 101 para. 1 of Law 36/1995. As emphasized in the motivation for the objection to enforcement, the authenticity of the document does not automatically confer executory power. While the sale-purchase antecontract was authenticated by a notary, it does not establish a certain, liquid, and due claim to be considered an enforceable title based on the aforementioned legal texts. Even though the antecontract is a notarial act, it cannot be enforced without a court decision for the refund of the price or any other sum established by the penalty clause. The claim cannot be directly enforced based on the antecontract, but only through the engagement of contractual responsibility for the culpable non-performance of the obligations assumed. If the defendant claims that the promisor-sellers did not fulfill their obligations, according to art. 1516 of the Civil Code, they may request either the enforcement of the obligation or the resolution or termination of the contract. Only after the termination of the contract does the right to claim the refund of the price or the related damages arise.”
3. Civil Decision No. 2673/2019 from 10.10.2019, issued by the Iași Tribunal:
“In order to enforce the sale-purchase antecontract authenticated under no. 1620/07.07.2017, with the amendment signed under no. 2745/05.10.2017, against the promisor-seller, for compensation of 5000 euros and for the refund of the paid price and the penalty fees calculated according to the antecontract provisions, it is necessary to establish that the sale-purchase contract was not concluded due to the fault of the promisor-seller. Such an establishment can only be done through a lawsuit under common law, not through the forced execution procedure. Only in this case does the claim become certain, liquid, and due, and currently, the conditions set forth in art. 663 para. 1 of the Civil Procedure Code are not met, according to which “forced execution can only be carried out if the claim is certain, liquid, and due.” Since it requires verification under common law, in contradiction with all contract parties regarding the claim and an analysis of its certainty, liquidity, and due status, the court concludes that the sale-purchase antecontract does not meet the requirements of art. 639 para. 1 of the Civil Procedure Code, which states that “an act authenticated by a notary public that acknowledges a certain and liquid claim constitutes an enforceable title” to be enforceable.”
4. Civil Decision No. 1333/2011 from 11.05.2011, issued by the Iași Tribunal:
“The antecontract creates an obligation to act and is an enforceable title only concerning this obligation to act. In the case of an antecontract, the obligations of the parties are interdependent, each having the dual role of debtor and creditor, and the legal obligation of one party is the legal cause of the other party’s obligation. In the event of non-performance of the obligation to act, it can be converted into an obligation to give, based on a court decision. Therefore, the enforcement of the penalty clause could only be requested by the creditor if a court rules on the debtor’s fault for failing to conclude the sale-purchase contract, thus making the claim certain, liquid, and due, giving rise to the obligation to pay, because the creditor’s right to claim the penalty under the antecontract does not arise from the antecontract itself but from the engagement of contractual liability for the culpable non-performance of the agreement within the court action. (…) Therefore, based on Article 312 paragraph 1 of the Civil Procedure Code, the appeal filed by P_____ V_____ against Civil Sentence No. 7324 of 05.05.2010 issued by the Iași Court in file number XXXXXXXXXXXXX will be admitted, and the sentence will be modified in the sense that: The objection filed by the appellant P_____ V_____ in contradiction with the defendant _(…) will be admitted.”
5. Râmnicu-Vâlcea Court, Civil Sentence No. 3437/2016:
“The sale-purchase antecontract signed by the parties cannot constitute an enforceable title for the claim of 100,000 euros, representing double the agreed price for the sale of land, as the antecontract does not establish the culpable non-performance of the obligations assumed by the co-contractors. This requires the engagement of contractual responsibility through judicial action for the resolution of the antecontract and the obligation to pay damages, evaluated in advance through the penalty clause. Therefore, the claim – the subject of the present dispute – cannot be directly enforced based on the sale-purchase antecontract, as claimed by the respondent, because it does not arise from the penalty clause in the antecontract (which only serves to assess in advance the damages to be paid if judicial resolution is ordered for non-performance), but from the engagement of contractual responsibility for the culpable non-performance within the resolution action.”
In light of our analysis, it is clear that the sale-purchase antecontract does not automatically have executive character. Its interpretation and practical application require judicial validation to obtain enforceability.
