SAFER: annulment of a substitution does not extinguish the promise to sell

Since the Agricultural Orientation Act of 1999, Article L. 141-1 of the French Rural and Maritime Fishing Code allows SAFER agencies to enter into promises to sell with a right to substitute a third party. A single notarised instrument then replaces acquisition by SAFER followed by resale. The seller protects against pre-emption, the buyer avoids some costs, and SAFER need not finance ownership of the property.

Selection of the recipient follows the same procedure as a resale: a call for applications, the technical committee’s opinion and government commissioners’ approval. Substitution is retroactive: the recipient is deemed to have replaced SAFER in its rights and obligations from the promise’s conclusion.

An owner granted SAFER a unilateral promise to sell a leased plot, with substitution rights, the option to be exercised before 31 December 2019. In November 2019, SAFER wrote to the notary expressing its intention to buy while maintaining its wish to substitute a buyer. The sale was then concluded directly between the owner and the buyer selected by SAFER.

An unsuccessful applicant obtained annulment of the allocation decision and then the sale deed. The Court of Appeal ordered the owner to continue performing her commitments to SAFER under the promise.

The Court of Cassation dismissed the appeal. It first approved the lower court’s assessment of the November 2019 letter: SAFER had indeed exercised the option within the agreed period, allowing it to substitute any buyer.

It then held that where SAFER, as beneficiary of a unilateral promise to sell with substitution rights, exercises the purchase option within the agreed period before substituting a buyer, annulment of the substitution does not cause the promise to lapse.

For the owner, the lesson is clear: SAFER’s timely exercise of the option forms the sale. Subsequent annulment of the selected buyer does not restore the owner’s freedom. SAFER may conduct a new allocation procedure or acquire for its own account. Before signing a promise with SAFER, it is useful to assess its effects in this scenario.

For the unsuccessful applicant, the ruling shows that a successful challenge may lead to a new allocation rather than destruction of the entire transaction. For SAFER, it highlights the importance of formally exercising the option on time, even when it intends to substitute a third party.