Promise of sale or unilateral pre-contract?
Some Sentences assimilate the Option Agreement to the Purchase Promise under the Spanish Law. In this sense, the Sentence 607/2009 of September 22, following that of February 9 2009, states that:
“The purchase option essentially constitutes a pre-contract or unilateral promise of contract by the seller, so that it is the option holder who acquires only the power to decide on the requirement of performance of the projected sale, and it is that consent of the option holder which is decisive for the contract to be perfected, albeit subject to the agreed exercise period, so that, once that period has elapsed, the option is extinguished and the buyer loses his right.”
Differences with the agreement to contract
To differentiate it from the “Purchase Promise”, some judgment determines the option contract as a “unilateral pre-contract”, as for example the one of June 17 2008 stating that:
“In the unilateral pre-contract only one party is obliged to bring the contract into force and the other has the right to demand this from him, as occurs in the purchase option contract. In the option, one party attributes to another a right that allows the latter to decide, within a given period of time and unilaterally, the bringing into force of the contract. Therefore, if the purchase option is exercised, the sale and purchase appears; but it does not arise if, by not exercising the option within the prescribed period, it lapses.”
(In this regard, the judgments of March 17 1993; June 18 1993; May 24 1994; June 30 1994, among others.)
Recognition in mortgage regulations
Although these classifications focus on the preparatory economic function of the option, they do not distort its nature as an atypical contract without specific regulation in positive law.
Article 14 of the Mortgage Law (RCL 1947, 476, 642) does recognise the purchase option, even bilateral, when a payment or price for the option is involved, as:
“An agreement whereby one party grants another the exclusive power to decide whether or not to enter into another principal sale and purchase contract, which must be carried out within a certain period and under certain conditions, and may also be accompanied by the payment of a premium by the option holder.”
Key elements of the purchase option
Judgment no. 638/2008 of 2 July lists its essential elements:
- Granting to the option holder of the right to decide unilaterally on the sale and purchase
- Determination of the object
- Indication of the price
- Specification of the exercise period
- (Accessory element: payment of the premium)
Public deed and contractual perfection
“The obligation to execute a public deed does not change regardless of whether Article 1451 of the Civil Code or the general rules on contracting apply…”
In the option, it refers to the execution of the perfected sale and purchase. By contrast, in the purchase promise, it applies to the perfection of a preparatory transaction.
Unilateral receptive declaration
Case law is unanimous in classifying the act of exercising the option right as a unilateral receptive declaration:
“It must be issued within the limitation period and reach its addressee within the same.”
(See judgments: 4/1992 of 4 January; 949/1993 of 8 October; 347/1994 of 25 April.)
Obstacles to notification and legal solution
If the granting party hinders receipt, the doctrine of Article 1119 of the Civil Code applies:
“The condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfilment.”
(See judgments: 162 of May 28 1976; December 10 1982; 1166/1992 of December 22)
Important: acceptance by the offeror is not required; notification of the option holder’s will is sufficient.
Catalan law: regulation in the Civil Code
The Civil Code of Catalonia regulates the right of option in Articles 568-1 et seq.
Maximum period: 10 years.
