Judgement On The Right To Enforce A Promise Of Sale Agreement

In a judgement delivered on the 5^th December 2025 having application number 1187/2023(HM), the Civil Court, First Hall affirmed that for a contracting party to enforce a promise of sale agreement and invoke the right of action as contemplated under the Civil Code, Chapter 16 of the Laws of Malta, that party must be in a position to appear on the final deed of sale.

The right of action for the enforcement of a promise of sale agreement features in Article 1357(2) of the Civil Code, which provides that, "The effect of such promise shall cease on the lapse of the time agreed between the parties for the purpose or, failing any such agreement, on the lapse of three months from the day on which the sale could be carried out, unless the promisee calls upon the promisor, by means of a judicial intimation filed before the expiration of the period applicable as aforesaid, to carry out the same, and unless, in the event that the promisor fails to do so, the demand by sworn application for the carrying out of the promise is filed within thirty days from the expiration of the period aforesaid."

In this case, the plaintiff requested that the Court orders the defendant to appear on the final deed of sale to purchase her property in accordance with the promise of sale agreement concluded between the plaintiff and her husband on the one part and the defendant on the other part. The promise of sale was conditional upon the defendant "being granted a banking facility from a local bank". During the term of the promise of sale agreement, the plaintiff's husband passed away and the notary who was engaged to publish the final deed of sale, asked the plaintiff for the necessary testamentary searches and the declaration causa mortis, which documents were also required by the bank that was granting a loan to the defendant to finance the acquisition of the property. Although the plaintiff agreed and assured the defendant that her personal notary was going to publish the declaration causa mortis before the expiration of the promise of sale, said causa mortis was not published by the time the promise of sale expired.

Four days prior to the expiration of the promise of sale agreement, the plaintiff presented a judicial letter in terms of Article 1357(2) calling the defendant to appear on the final deed of sale, and completed the declaration causa mortis the day after the promise of sale had expired.

The Court held that the mechanism provided for in Article 1357(2) is not intended to allow a contracting party to unilaterally extend, whether explicitly or implicitly, the term agreed upon in the promise of sale agreement, in order to satisfy the conditions of the promise of sale agreement and the obligations of said party. On the contrary, this procedure is designed to provide a contracting party with a right of action against the other party who, for reasons not considered valid under the law or the promise of sale agreement, refuses to appear on the final deed of sale. The judicial intimation serves to place the defaulting party in mora and to afford him the opportunity to comply with his obligations.

However, for a contracting party to avail of this mechanism, s/he must first be in a position to appear on the final deed of sale before the expiration of the promise of sale agreement, and must have already satisfied all his/her obligations both at law and in terms of the promise of sale by not later than the expiration date of the promise of sale agreement. In this case, the Court found that the plaintiff was not in such a position, neither at the date of the filing of the judicial letter nor at the date of the expiry of the promise of sale.

The Court also acknowledged that jurisprudence establishes that the determining factor of whether a party had a valid reason for failing to honour a promise of sale agreement, is whether the sale could have been executed at the moment that the final deed of sale ought to have been done, that is, at the expiration date of the promise of sale agreement. Any steps taken after the expiration of the promise of sale agreement are immaterial, even if the defaulting party seeks to rely on the mechanism contemplated under Article 1357(2).

Accordingly, the Court noted that the plaintiff was not in a position to execute the sale at the expiry of the promise of sale agreement because until such date, the declaration causa mortis had not been published, and whilst this declaration does not affect the title of the property, the Court asserted that its absence gave rise to a legitimate impediment to the sale of the property. The Court also observed that the sale could not have taken place because without said declaration causa mortis, the bank financing was not possible, and hence the condition of the promise of sale agreement relative to bank financing could not be satisfied, nor could the Notary comply with his obligations at law to collect the stamp duty due from the vendor. Moreover, the Court also noted that prior to the expiration of the promise of sale agreement, the plaintiff had never disputed that the bank required the declaration causa mortis, and as a matter of fact had also agreed to provide it. This led the Court to conclude that the plaintiff had implicitly accepted that this was necessary for the final deed of sale and the transfer of the property.

In view of these considerations, the Court ruled that the defendant had a valid reason at law not to appear on the final deed of sale, and that the plaintiff could not compel him to do so on the basis of having remedied the deficiency after the promise of sale agreement had expired.

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