Business Contracts

Article 1628 of the Civil Code states that, whatever the contractual stipulations relating to the warranty, the seller remains liable for his personal actions. He must refrain from disturbing, in fact or in law, the buyer's peaceful possession of the thing sold. Any agreement to the contrary is null and void , as the warranty for personal acts is a matter of public policy . As the seller is liable …

Warranty against personal acts of seller (Garantie du fait personnel)

Article 1628 of the Civil Code states that, whatever the contractual stipulations relating to the warranty, the seller remains liable for his personal actions. He must refrain from disturbing, in fact or in law, the buyer's peaceful possession of the thing sold. Any agreement to the contrary is null and void , as the warranty for personal acts is a matter of public policy . As the seller is liable for any disturbance of the buyer's enjoyment of the property, it is irrelevant whether the act causing the disturbance was performed in good or bad faith . The warranty against personal acts is not limited in time .

De facto disturbances caused by the seller include all material acts likely to compromise the buyer's peaceful possession of the property, in accordance with Article 1625 of the Civil Code. To fall under the warranty against dispossession, the disturbance must occur after the transfer of ownership of the property sold . The notion of de facto disturbance is particularly relevant to the transfer of a business, where the obligation to refrain from any act likely to divert customers from the business coexists, in most cases, with a non-compete clause by the transferor of the business . In this case, the expiry of the period of the prohibition on re-establishing oneself in a given activity does not have the effect of releasing the transferor from the legal obligation to provide a warranty in respect of his personal actions . Even if the transferor is not prohibited from carrying on a similar business after the sale, his actions must not be detrimental to the business , and he has a duty to refrain from any action likely to reduce goodwill or divert customers from the business . The warranty against dispossession is also incumbent on the transferor of shares, who must not prevent the transferee from pursuing the economic activity of the transferred undertaking and implementing its corporate purpose , in particular by engaging in acts that would have the effect of enabling the transferee to take over the clientele of the transferred undertaking . As in the case of the transfer of a business, the transferee of shares is entitled to invoke the legal warranty against dispossession even after the non-compete clause has expired . Thus, the transferor of shares cannot organize an event competing with that of the undertaking whose shares he has transferred without breaching the legal warranty against dispossession . Similarly, the transferor may not set up a company under virtually the same name to distribute in France the products for which it had notified the transferee company that supplies had been cut off . The prohibition applies not only to the seller acting as a legal entity, but also to its manager or to any persons it may interpose to avoid its obligations . The fact that the director of the transferee company did not play a role in the organization and management of the undertaking in question is not sufficient to preclude his warranty obligation . However, a non-compete clause contained in a deed of transfer of a business and imposed on the transferor, which is merely the expression of the warranty against dispossession owed by the transferor to the transferee, is binding on the transferor and its successors only in accordance with the terms of the deed, so that, where the deed designates the transferor as the legal entity constituted by the company, and not its manager, who, moreover, does not have the status of a successor to the transferor, compensation for breach of the obligations provided for in that clause and the warranty against dispossession cannot be claimed against its manager .

Moreover, the seller owes a personal warranty if he interferes, directly or indirectly, with the exercise of the right he has transferred to the purchaser . He may not, subsequently, oust the purchaser himself by invoking the statute of limitations in order to be recognized as the owner of the thing sold of which he has retained possession . Similarly, a seller who transfers the same property a second time to a purchaser who becomes its rightful owner by virtue of a duly published authenticated deed is in breach of his warranty against dispossession vis-à-vis the first purchaser . The seller must guarantee the transferee ownership of the rights he has transferred to him, particularly in the case of the transfer of intellectual property rights . In addition, the personal warranty is perpetual, in the sense that it is not subject to prescription. This allows the purchaser and, where applicable, the sub-purchaser to enforce the warranty against the seller .

Lastly, the seller owes the warranty for his personal actions to any person who derives his rights to the thing sold from the buyer, so that an exchange made after the sale cannot release the seller's heirs from their obligation which, being indivisible, is not measured against their rights in the estate of their originator .

Cass. 1re civ., 17 July 1962, LawLex202300008639JBJ; Cass. com., 2 December 1965, LawLex202300008626JBJ: Article 1628 of the Civil Code does not preclude the validity of a clause whereby a buyer who has been fully informed of a particular circumstance, prior to the sale, likely to cause his dispossession, has agreed to bear the risk, without being able to take recourse against the seller.

Cass. com., 14 April 1992, LawLex202200000772JBJ.

CA Pau, 26 June 2017, LawLex202300009067JBJ; Cass. 1re civ., 24 January 2006, LawLex202300000612JBJ.

Cass. com, 15 December 2009, LawLex202300000601JBJ; CA Lyon, 2 May 2024, LawLex202400003574JBJ.

Cass. com. 18 October 2011, LawLex201100001730JBJ.

Cass. com. 20 February 2007, LawLex200700000285JBJ.

Cass. com. 24 May 2005, LawLex202200000275JBJ; 16 June 1969, LawLex202300008088JBJ.

Cass. com. 26 January 2022, LawLex202200000586JBJ.

CA Dijon, 4 April 2024, LawLex202400003149JBJ.

CA Paris, 4 July 2019, LawLex202300009629JBJ.

Cass. 3e civ, 20 October 1981, LawLex202200000274JBJ.

Cass. 3e civ, 29 April 1981, LawLex202300008031JBJ.

CA Paris, 4 July 2019, LawLex202300009629JBJ

Cass. 1st civ. 27 May 1986, LawLex202300008085JBJ; 19 June 1990, LawLex202300002594JBJ.

Cass. 3e civ, 20 October 1981, LawLex20220000000274JBJ, holding that the seller's successors are bound by the duty to guarantee the purchaser of a plot of land and his assigns against any dispossession resulting from their personal actions, such as thirty-year servitude; CA Pau, 29 September 2020, LawLex202300009070JBJ; Cass. 3e civ, 30 June 2021, LawLex202300002594JBJ, 30 June 2021, LawLex202200001392JBJ, which holds that the seller, bound by the obligation to guarantee the purchaser of a plot of land against any eviction resulting from his personal act, such as thirty-year servitude, cannot oust by invoking acquired limitation to have himself recognized as the owner of the land he has sold, but of which he has retained possession, the purchaser still being entitled, in this case, to rely on the plea of perpetual warranty.

Cass. 3e civ, 4 July 1973, LawLex202300009071JBJ.

CA Paris, 3 April 2024, LawLex202400002939JBJ.

CA Saint-Denis de La Réunion, 16 April 2021, LawLex202300009065JBJ.

Cass. com, 14 April 1992, LawLex202200000772JBJ; 16 January 2001, LawLex202200000770JBJ; Cass. com, 16 January 2001, LawLex202300008464JBJ.

Cass. com. 16 June 1969, LawLex202300008088JBJ.

CA Grenoble, 30 March 2023, LawLex202300009621JBJ; CA Pau, 23 January 2020, LawLex202300009630JBJ; CA Pau, 26 June 2017, LawLex202300009067JBJ.

Cass. com. 21 January 1997, LawLex20220000000277JB, holding that the implementation of the warranty against dispossession of a transfer of company shares is subject to the existence of acts of such a nature as to constitute takeovers or attempted takeovers of the property sold, or of infringements of activities such as to prevent the purchaser from continuing the economic activity of the undertaking as well as implementing the company's object; 26 November 2003, LawLex202300009109JBJ.

Business Contracts

183. Warranty against personal acts of seller (Garantie du fait personnel)

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183. Warranty against personal acts of seller (Garantie du fait personnel)

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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