As it is well known, a contract for the sale of any good/service is built upon the will of two or more parties, and must include general requirements applicable to the place in which the contract will be executed, in addition to clear offer, acceptance and consideration from the parties therein, and must be devoid of ‘defects of the will' such as fraud, and legal error. 

Generally, a Sale Contract is often preceded by an agreement between the parties on the terms and conditions of the upcoming sale, and this is called a Promise of Sale Agreement.

According to the law, a promise of sale is an expression of free will that creates an obligation on the promisor, and a right for the promise. Furthermore, the sale must occur on a specific date agreed between the two parties, Through this promise, the seller undertakes to complete the sale at a certain price and with certain conditions, if the promisee expresses his desire/desire to purchase within a specified time frame.

Once the promisor and the promisee have agreed on all of the fundamental matters regarding the sale, namely the determination of the sale item, the price, the manner and deadlines for contractual performance, and the specified period permitted for the promisee to indicate his desire to purchase, the Promise of Sale Agreement would be legally enforceable in favor of the promisee, and would effectuate the sale, as a standard Sale Agreement would.

Additionally, the below should be taken into consideration:

– The promisee's desire must be clearly shown at a particular point in time for the reasons stated below

-Before desire is shown: this promise could create an obligation on the promisor to execute the Promise of Sale Agreement, however, this obligation is generally forfeited if the promisee does not expressly show his desire to purchase within the time frame specified in the Promise of Sale Agreement

After desire is shown: a Promise of Sale Agreement alone would be legally binding and enforceable without the need for additional consent from the promisor.

-In case the promisor breaches any of his obligations, and refrains from concluding the final Sale Contract, the promisee may have the right to resort to courts requesting performance of the Promise of Sale Agreement. If the court responds to the claimant's requests, the judgment would likely effectuate this preliminary sale agreement, and give it the same validity as any (final) Standard Sale Contract.

-We refer here to one of the cases initiated by our office, wherein a promise of sale was concluded for a number of villas in one of Egypt's most popular resorts. It was found that the promisee had clearly shown their desire to purchase, however, the promisor refrained from signing the (final) sale contract despite both agreements having the same terms and conditions regarding the price and performance time, and instead insisted on issuing a sale contract with new and different terms and conditions.

Subsequently, our office filed a lawsuit requiring performance of Promise of Sale Agreement, with the terms and conditions of the promise of sale contract, the court has accepted this request and ruled that the promise of sale be legally effective, and whenever the judgment is final, the terms therein, will have the same legal enforceability of a standard sale contract.

Link to case

The purpose of this article is to highlight that being a signatory to a Promise of Sale contract has serious effects, since the promisor shall not have the power to later modify the terms and conditions of the contract once the promisee has declared his desire to purchase and that he shall uphold these terms and conditions in the sale contract without modification or alteration.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.