THE RELEVANCE OF THE CASE
Regarding the remedies of the parties in case of culpable non-execution of sale and purchase promises, the law establish that, when the promisor refuse to conclude the promised contract at the request of the party that fulfilled its own obligations, the court has the possibility to substitute the consent of the party that refuses, by pronouncing a decision that substitutes the agreement.
Submitting such a court claim is conditioned by the existence of an unjustified refusal from the promissory party and also by observing the legal time limitation of six months from the deadline agreed. In this regard, it will become relevant to define the situations when the refusal of the other party may be considered unjustified and the cases of interruption of the limitation period by acts of express or tacit recognition of the claim.
THE SYNTHESIS OF THE FACTUAL SITUATION
In fact, by means of the bilateral promise to sell the defendant company, as a promissory seller, has obliged itself to sell to the plaintiff, as an individual promissory buyer, an apartment and two parking lots.
The parties has signed in this way a protocol and according to this, the possession and the use of the apartment that formed the object of the promise to sell has been handed over to the plaintiff. The price has been partially paid, the amount paid being an earnest payment and the rest of the price was agreed to be paid on the date when the parties would have signed the final agreement based on the issuance of the land register of the individual apartment. In this regards, it was established a maximum term for signing that has not been respected by the defendant company.
The plaintiff summoned the defendant company in order to present itself to the notary for the execution of the sale agreement in authentic form but the selling company did not comply with the request. Subsequently, the plaintiff initiated a litigation through which he requested the termination of the pre-sale-purchase contract and the obligation of the defendant to return double the amount paid as earnest payment.
After the registrations of the court claim, the defendant notified the plaintiff in order to conclude the authentic sale agreement using a request sent through e-mail and which was accompanied by the land register extracts of the apartment and the two parking spaces, as well as a proposal for a court transaction. The plaintiff did not respond to that late invitation, as the dispute was already before the court at that time, and, moreover, the settlement proposal did not mention the parking spaces which were also subject of the initial pre-sale agreement.
Following the exhaustion of the appeal, the Cluj Court of Appeal decided that the defendant’s non-performance of the contract was not significant and therefore the pre-sale agreement cannot be terminated. The rejection of this first legal claim was based on the plaintiff’s right to obtain the authentic conclusion of the sales contract, also taking into account the defendant’s availability to conclude the contract, expressly stated this first trial.
In this context, the plaintiff-buyer proceeded to notify once again the defendant through the bailiff to present himself before the public notary in order to have the contract executed, but the defendant did not comply with the request either.
In view of this sequence of facts, the plaintiff has decided to initiate the following legal proceedings, the purpose of which is for the court to give a judgment which will replace the defendant’s consent to the conclusion of the contract of sale in respect of the property which is the subject of the promissory contract, in view of the defendant’s unjustified refusal to appear before the notary.
PROCEDURE BEFORE THE CLUJ SPECIALIZED COURT
The Brisc Legal team of lawyers assisted and represented the plaintiff – buyer in this case, the purpose of which was to order the defendant company to conclude the sale-purchase agreement concerning the apartment building and the two parking lots, within the meaning of Article 1669 of the Civil Code.
Thus, it was stressed before the court that the promissory sale fully meets the essential conditions laid down by law for its validity and, therefore, the refusal to conclude the sale contract is unjustified. It should be noted that, in order to pay the difference in price, during the proceedings, the plaintiff made use of the offer to pay procedure and the consignment procedure.
The unjustified nature of the refusal emerged from the defendant’s uncooperative attitude throughout the execution of the contract. The refusal was all the more unjustified because the position constantly expressed during the first court file and outlined in the defense put forward by the seller was for the rejection of the request for termination of the contract, based on its willingness to conclude the contract in authentic form. However, the defendant unequivocally expressed its refusal to conclude the contract by failing to attend the notary’s office following its second notification by the bailiff. The position of refusal was also expressed within the answers submitted following the written interrogation.
In accordance with the arguments prepared by our real estate lawyers in Cluj-Napoca, the Cluj Specialized Court ruled that according to the provisions of Article 1669 of the Civil Code, when one of the parties who concluded a promise of sale-purchase refuses, without justification, to conclude the final contract, the other party may request the pronouncement of a judgment in lieu of the contract, if all other conditions of validity are met, within a limitation period of 6 months.
As regards the limitation period for the right to seek such type of court judgement, the plaintiff assisted by the Brisc Legal lawyers invoked the interruption of the limitation period by acts of recognition from the defendant, namely the handing over of the possession and his willingness to conclude the contract in authentic form expressed in the original dispute, the arguments being validated by the court. The limitation period is interrupted by a voluntary act of execution or by recognition, in any way, of the right for which the limitation period is running. In that regard, the court held that the transfer of possession was a voluntary act of execution on the part of the defendant, and that two of the attributes of the right of ownership, namely possession and use, were in fact transferred.
The existence of the defendant’s consent to the plaintiff exercising these attributes of ownership also constitutes recognition of the right claimed by the plaintiff. The fact that the minutes of the transfer of the apartment had been concluded before the limitation period began to run was held by the court to be irrelevant, since that act continued to have effect after that time, and the defendant had accepted that the plaintiff had in fact exercised possession and use of the apartment and the parking lots, which constitutes tacit recognition of his right. In addition, the court held that the defendant’s procedural position during the proceedings for termination of the contract, in the sense of its willingness to conclude the contract, clearly indicated the recognition of the right claimed by the plaintiff.
With regard to the defendant’s plea of non-execution, the court held that the plaintiff’s refusal to participate in the defendant’s proposed settlement was justified. The Court held that the proposal to enter into a settlement occurred after the date on which the plaintiff agreed to initiate the legal proceedings to terminate the promise to sale and that the party’s procedural right of disposal could not be censored. Given that the evidence in the case did not show that the refusal was justified, the court held that the requirements of Article 1669 of the Civil Code had been met and that the plaintiff was entitled to apply for a court judgment in lieu of the authentic contract.
PROCEEDINGS BEFORE THE CLUJ COURT OF APPEAL
The defendant company has appealed against the decision of the court of first instance. By the Civil Decision of the Court of Appeal of Cluj, in accordance with the arguments developed by the team of lawyers Brisc Legal, the appeal filed by the defendant-appellant against the Civil Judgment of the Specialised Court of Cluj was rejected and the appeal was maintained in its entirety.
With regard to the solution given to the limitation procedural plea, the Court of Appeal of Cluj pointed out that the court of first instance had ruled that the limitation period of 6 months is interrupted.
In that regard, the defendant-appellant argued that the attitude adopted after the civil claim for termination of the contract, in the sense of not taking legal measures to remove the applicant from the property, can be characterized at most as a toleration of the applicant in the premises and not as an acknowledgement, even tacit, of the right which is subject to limitation. With regard to the position adopted by the appellant during the course of the dispute concerning the termination of the contract, the appellant submitted that it did not take a procedural position in favour of the enforcement of the contract, but referred to doctrinal opinions merely to show that enforcement could have taken place during the proceedings. Similarly, the appellant company further argued that the refusal to sign in authentic form was justified, and that the plaintiff’s action in bringing an action for termination of the contract would have unequivocally repudiated the contract.
In defense of the respondent, Brisc Legal lawyers pointed out before the Court of Appeal of Cluj that, according to the provisions of the Civil Code, the limitation is interrupted by a voluntary act of execution or by recognition, in any other way, of the right whose action is prescribed, made by the person in whose favor the prescription is running, and although the defendant appellant considered that the surrender of possession may amount to at most an act of tolerance on its part, it did not correlate the legal significance of such behavior of tolerance with the attributes of the right of ownership. With regard to the willingness constantly iterated by the defendant-appellant in the course of the proceedings to conclude the contract in authentic form, it was established that this represented unilateral and express recognition of the respondent’s right to seek a court judgment in lieu of an authentic contract.