In a decision dated 11 February 2026, the French Cour de cassation confirmed that a shareholder adhering to a shareholders’ agreement may be bound by the put and call options stipulated therein, provided that they have been expressly accepted. Furthermore, a condition for exercising an option that is dependent on the beneficiary’s decision is not potestative and does not invalidate the option.
In the case at hand, a shareholders’ agreement was concluded in 2017 between a majority shareholder and a minority shareholder, who also served as an officer of the company. The agreement provided for reciprocal call and put options, enabling the majority shareholder to acquire the officer’s shares in the event of termination of his managerial functions.
In 2020, the officer transferred his shares to a holding company he had established, which met the criteria of a “family holding” as defined in the shareholders’ agreement. He was subsequently removed from office by the supervisory board.
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Following this removal, the majority shareholder sought to exercise the call option against the holding company, which refused to perform. The holding argued that it was not bound by the promise set out in the agreement, as it had never expressly consented to it. It further contended that the promise was void due to its potestative nature, since its exercise depended on the officer’s removal, which in reality was controlled by the majority shareholder through his influence over the supervisory board.
Share Put and Call options are standard instruments for liquidity and shareholder control, widely used in fundraising transactions, joint ventures, and management packages.
As liquidity instruments, they allow a manager, a founder, or a partner involved in a joint venture to ensure the sale of their shares under predetermined conditions. As instruments of shareholder control, they enable, for example, a majority shareholder to secure the repurchase of minority stakes upon the occurrence of certain events.
The options may be provided for in the articles of association, in a shareholders’ agreement, or in a separate deed. Their effectiveness, however, requires careful drafting, particularly regarding the exercise conditions—especially the triggering events—the methods for determining the price, and the respective obligations of the parties.
In this context, the Court decision dated 11 February 20261 provides useful clarification both on the enforceability of a promise against a successor of the promisor and on the risk of nullity arising from conditions whose exercise is at the discretion of the beneficiary.
The holding company argued that it was not bound by the share call option set out in the shareholders’ agreement. Indeed, even if it had adhered to the agreement, it had neither formally accepted becoming a promisor nor clearly defined the scope of its rights and obligations towards the other shareholders.
The Cour de cassation noted that the appeal court had validly held that the transfer of shares by the officer to his family holding company constituted a “free transfer” as defined in the shareholders’ agreement. Moreover, the holding had adhered not only to the agreement itself but also specifically to the put and call options. As a result, it could validly be bound by the call option, and the majority shareholder was entitled to seek its enforcement.
It is common for shareholders’ agreements to provide that certain share transfers are exempt from approval, lock-up, pre-emption, or other restrictions. These so-called “free transfers” typically concern a natural person shareholder transferring shares to a company under their control for estate or family purposes. In this context, it is considered good practice that a free transfer be made conditional upon the full and express adherence of the transferee to the shareholders’ agreement, with respect to the shares acquired.
The decision thus recognizes the validity of transferring, to a new shareholder, the rights and obligations under a shareholders’ agreement—including the promises it contains—through adherence to the pre-existing agreement.
However, beyond adherence to the agreement, it is advisable that the new shareholder has expressly accepted the promise in order to be substituted for the original promisor. Indeed, it is uncertain whether the same result would have applied if the holding had merely adhered to the shareholders’ agreement without expressly accepting the promises.
Accordingly, deeds of adherence should be drafted with care, specifically addressing the promises they include and any related obligations (e.g., tag along / drag along rights…).
In its second argument, the holding company invoked the nullity of the call option on the grounds that the exercise condition was potestative, i.e. at the discretion of the majority shareholder.
As the officer could be removed ad nutum by the supervisory board, the holding argued that the condition depended solely on the will of the majority shareholder, the beneficiary of the call option.
In response, the French Cour de cassation recalled that, under Article 1304‑2 of the French Civil Code, an obligation is only void if the condition depends entirely on the debtor’s will. Here, the removal fell within the creditor’s discretion (the majority shareholder) and not the debtor’s (the holding). Accordingly, the share call option could not be declared void.
The decision thus secures put and call options concluded under the new Article 1304‑2, whose exercise may depend on a decision by the beneficiary of the promise. This includes, for example:
It also underscores the importance of precise drafting of reciprocal promises (call and put options) to ensure that conditions valid in one case do not become void in another.
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