Business Contracts

Before the reform of contract law, only certain provisions of the Civil Code governing the law of sale provided for a reduction in the sale price, such as Article 1617 , in the event of incorrect capacity, or Article 1619 , in the event of error in measurement of more than one twentieth, or, above all, Article 1644 , which, as part of the warranty against latent defects, offers the buyer the choic …

Reduction of price

Before the reform of contract law, only certain provisions of the Civil Code governing the law of sale provided for a reduction in the sale price, such as Article 1617 , in the event of incorrect capacity, or Article 1619 , in the event of error in measurement of more than one twentieth, or, above all, Article 1644 , which, as part of the warranty against latent defects, offers the buyer the choice of either returning the thing and having the price refunded (action for rescission ), or keeping it and having part of the price refunded (action for reduction of the price). Strictly interpreting the latter text, the courts consider that an action for reduction of the price can only lead to a reduction of the sale price, even if the cost of repairing the property affected by the latent defect is higher, as long as the buyer has opted to keep the item . Furthermore, the latent defect must be sufficiently serious to justify a reduction in price .

However, the case law did not confine the area of price reduction to these provisions alone, and allowed the creditor to accept the debtor's failure to perform in accordance with the contract in return for a proportional reduction in the sale price. In particular, the Commercial Chamber of the Court of Cassation held that, insofar as the sale had not been rescinded, a court of appeal could grant the purchaser a reduction in the sale price initially fixed by the seller, insofar as the goods delivered, which had not been initially checked at the supplier's, turned out not to conform to the order, even if the purchaser was unable to return the goods . In another ruling of the same day, the Court also held that, in the case of a commercial sale, the purchaser may request a reduction in price in the event of partial non-performance by the seller of its obligation to deliver, even if the purchaser has been given possession of the subject matter of the sale . However, the Third Civil Chamber recalled that the courts cannot reduce the sale price determined by the parties, since the loss resulting from the seller's partial non-performance of his obligation to deliver can only be made good by awarding damages .

Since then, the reform of contract law has made price reduction a sanction, among others, for contractual non-performance in general. Article 1217 of the Civil Code now provides that “the party to whom the undertaking has not been performed, or has been performed inadequately, may [...] obtain a reduction in the price”. Article 1223 adds that “in the event of incomplete performance , the creditor may, after formal notice and if he has not yet paid all or part of the performance, notify the debtor as soon as possible of his decision to reduce the price proportionally. The debtor's acceptance of the creditor's decision to reduce the price must be in writing. If the creditor has already paid, in the absence of an agreement between the parties, he can ask the court to reduce the price”. 

By allowing the creditor of an imperfectly performed obligation to accept a price reduction, without having to refer the matter to the court - provided the parties are in agreement - and on condition that the creditor first gives the debtor formal notice to fully perform his obligation, this provision introduces an intermediate sanction between the exception of non-performance and rescission, by revising the contract in line with its real performance, instead of what was provided for contractually. In two judgments dated 18 December 2024, the Court of Cassation specified that a creditor who may make use of a unilateral reduction must be able to ask the court to impose this sanction, whether or not he has paid for all or part of the performance  .

Art. 1617, Civil Code: “If the sale of an immovable has been made with an indication of the capacity, at the rate of so much the measure, the seller is obliged to deliver to the purchaser, if he so requires, the quantity indicated in the contract; And if the thing is not possible for him, or if the purchaser does not require it, the seller is obliged to bear a proportional reduction of the price”.  See, for an application, Cass. 3e civ. 28 January 2015, LawLex202200000172JBJ, specifying that while the restitution to which the seller is bound by law following the reduction in price resulting from a smaller measurement in relation to the agreed surface area, does not in itself constitute a compensable harm allowing an action in warranty, the seller may nevertheless claim against the measurer, a loss of opportunity to sell his property at the same price for a smaller surface area.

Art. 1619, Civil Code: "In all other cases,

Either the sale is of a certain and limited corpus,

Either the subject matter of the sale is distinct and separate land,

Or it begins with the measurement, or with the designation of the object sold, followed by the measurement,

The expression of this measurement does not give rise to any price supplement, in favor of the seller, for the excess measurement, nor in favor of the buyer, to any price reduction for the lesser measurement, insofar as the difference between the actual measurement and that expressed in the contract is one twentieth more or less, having regard to the value of the totality of the objects sold, if there is no stipulation to the contrary".

Art. 1644, Civil Code: “In the case of Articles 1641 and 1643, the buyer has the choice of returning the thing and having the price returned to him, or keeping the thing and having part of the price returned to him”.

Cass. 3e civ, 19 April 2000, LawLex200500004317JBJ.

Cass. com. 6 March 1990, LawLex200500005444JBJ.

Cass. com, 15 December 1992, LawLex202200000254JBJ.

Cass. com. 15th December 1992, LawLex202200003468JBJ. See already, Cass. com. March 23 1971, LawLex202200002808JBJ, noting that the buyer may also benefit from a reduction of half the agreed price if two-thirds of the goods delivered do not conform.

Cass. 3e civ, 29 January 2003, LawLex202300004775JBJ.

CA Reims, 21 June 2022, LawLex202300009925JBJ, ruling that the purchaser may not seek a reduction in the sale price, insofar as he does not establish a breach by the seller of his obligation to deliver conforming goods, whereas the price reduction provided for in Article 1223 presupposes contractual non-performance.

Cass. 1re civ., 18 December 2024, LawLex202400009829JBJ and LawLex202400009830JBJ.

Business Contracts

241. Reduction of price

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

241. Reduction of price

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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