Those who purchase a good under a signed contract have the right of withdrawal. That is, Portuguese legislation allows the unilateral termination of a contract, exempting the consumer from justifying the reasons to the seller. But does this apply in real estate, namely to lease agreements or to a promissory purchase and sale agreement? We answer these and other questions in this article with legal grounds.

What is the right of withdrawal?

The right of withdrawal is considered under the Portuguese legal system as a potestative right, that is, a right that allows its holder to provoke, through a unilateral declaration of their will, legal effects in the legal sphere of another. This means that, through the declaration of will of the right holder, legal effects are produced in the sphere of the other party. Therefore, it is the possibility for the holder of this right to unilaterally alter the legal order, through a manifestation of will.

Is the right of withdrawal applicable to real estate contracts?

This right is provided for in several legal statutes, being recognized and applicable to contracts concluded at a distance and to contracts concluded outside the commercial establishment – not including here contracts relating to the purchase and sale or other rights concerning real estate, including leases – to distance contracts relating to financial services, to consumer credit contracts, among others.

However, the right of withdrawal is not expressly provided for in real estate contracts, although it may arise within the scope of the principle of contractual freedom of the parties.

Article 405 of the Civil Code provides for the principle of freedom of contract, which translates into the recognition that individuals can legally relate to each other through a contract. The contract is, essentially, the main manifestation of individual autonomy in relationships with others. Contractual freedom may be freedom of conclusion or freedom of stipulation. For this analysis, it is important to understand the freedom of stipulation, which corresponds to the freedom to set the effects of the contract, that is, the freedom of the parties to insert in the contract the clauses they consider convenient, thus defining the effects they intend.

Promissory Purchase and Sale Agreement

How can the right of withdrawal be provided for in the CPCV?
The right of withdrawal does not apply to contracts relating to the purchase and sale or other rights concerning real estate, unless contractually stipulated. Thus, it is possible that within the scope of a Promissory Purchase and Sale Agreement (CPCV), the right of withdrawal may be provided for through the inclusion of a clause defining the situations in which the CPCV may be terminated and the conditions for such, provided that the parties agree.

If the right of withdrawal is foreseen in the CPCV, both the promissory seller and the promissory buyer will have the ability to withdraw from the contract under the agreed circumstances. If, however, they do so outside what was agreed, there may be associated penalties – such as, for example, the payment of double the deposit or the loss of the amount paid as a deposit.

It is important that when opening the possibility for one of the parties to unilaterally terminate the contract, the parties take care to establish in the CPCV the guiding criteria for this right, establishing, for example, a time frame for its exercise, the formalities to be adopted by the withdrawing party, and possible consequences for non-compliance.

If the right of withdrawal is foreseen in the CPCV and exercised within the limits established in the contract, it is possible to consider that one of the parties may withdraw from the transaction without being subject to penalties, thus terminating the contractual bond. If this right is not foreseen, one of the parties may still withdraw from the CPCV, subject, of course, to penalties provided by law or the contract itself.

In what cases is a CPCV with a right of withdrawal justified?

This type of clause may be justified in contracts relating to the purchase of future real estate, such as the purchase of houses off-plan. In such situations, where the promissory seller undertakes to sell and the promissory buyer undertakes to buy a property that does not yet exist, being only projected but not built, it is conceivable that one of the parties, in the meantime, may regret the sale or purchase, given the time elapsed since the conclusion of the CPCV.

In what cases can a CPCV be terminated?

The termination of a CPCV can only be done legally when there are grounds provided for in the contract or in the Civil Code.

In legal transactions, in addition to performing a certain action, it is also necessary, for the effect to be produced, that the parties intended that effect. For a legal transaction to exist, there must be not only the will to perform the action but also the will to obtain the associated effects. This will for results is presumed from the action itself, in the sense that, if the parties acted in that way, then the effects associated with that action are presumed to have been intended.

However, there are cases where, due to defects, the production of effects is prevented. In such cases, where there is a lack of will, defects of will, or defects of declaration, the legal transaction may not produce its effects, becoming ineffective, invalid, or non-existent. The right of withdrawal does not fall under these defects since it simply arises from a supervening lack of will in the transaction, exempting the withdrawing party from justifying the reasons to the other party.

Does the right of withdrawal apply after the deed of the house?

The right of withdrawal is not possible after the signing of the public deed, since the transfer of ownership rights over the property occurs at that moment, leaving no room for unilateral withdrawal.

The exclusion of contracts relating to real estate from the regime of free termination aims to protect the stability and legal security of these transactions, although the principle of contractual freedom allows for the inclusion of clauses in the contract that permit termination under that regime.

If this right were absolute, there would be situations of abuse of rights, in the sense that the withdrawing party, after creating the expectation of concluding the transaction for the other, could later and unilaterally withdraw, frustrating the expectations of the other part