Business Contracts

According to Article 1137, paragraphs 1 and 2, “fraud is the obtaining of consent by one contracting party through maneuvers or lies” or “the intentional concealment by one of the contracting parties of information which he knows to be decisive for the other party”.
Fraud thus presupposes that the intentional fault committed by one party has caused the other party to make a mistake which induced t …

Victim's mistake

According to Article 1137, paragraphs 1 and 2, “fraud is the obtaining of consent by one contracting party through maneuvers or lies” or “the intentional concealment by one of the contracting parties of information which he knows to be decisive for the other party”.

Fraud thus presupposes that the intentional fault committed by one party has caused the other party to make a mistake which induced the latter to enter into the contract . To be decisive, the mistake caused by the silence or maneuvers of one party must be such that, in their absence, the other party would not have contracted ("primary fraud") or would have contracted under different conditions (" secondary" or “incidental” fraud"). A primary fraud is committed by a seller who intentionally omits to provide complete information on an essential characteristic of the equipment sold (the need to adapt the premises in order to set it up) which, had it been known to the buyer, a mere tenant of the premises, would have convinced him not to contract . The sellers committed an secondary fraud when they concealed from the buyer the true mileage of the vehicle sold and the defect in its turbocharger, causing the buyer to purchase at full price a vehicle that he would have purchased at a lower price had they not used fraudulent tactics .

The decisive nature of the mistake is a matter for the trial courts to determine. For example, the seller-installer of a boiler who, at the time of concluding the contract, failed to inform the buyer, an elderly lay consumer, of elements that were decisive for her consent (difficulties in handling the appliance; lack of accessibility; unsuitable output; unnecessary functionalities), is guilty of fraudulent concealment, justifying the cancellation of the agreement and the award of damages . The induced mistake is therefore decisive for consent, if the seller knowingly conceals elements that he knows to be essential to the purchaser, and if he knows the value that the latter is places o, those elements . According to the courts, information to the effect that insufficient use of the vehicle sold could lead to premature engine wear or even engine failure, which, had it been known to the buyer before the sale was concluded, would have dissuaded him from entering into the contract, must be considered decisive of the buyer's consent . The seller of a heat pump, obliged to guide the buyer towards an installation that meets his expectations, also deprives his customer of information essential to the informed formation of his consent by failing to perform a thermal diagnosis .

 Similarly, the seller's failure to disclose the exact location of the building sold with regard to the regulations governing high-rise buildings and the amount of the associated safety charges constitutes grounds for invalidating the sale, insofar as such information is decisive for the buyer, who must be in a position to assess the profitability of his real estate operation .

As a provoked mistake, fraud has long been treated in the same way as mistake, which only justifies invalidity of the sales contract if it is excusable. A person who neglected to carry out elementary checks, or who disregarded their obligation to seek information , could not legitimately invoke fraud, as the courts were particularly intransigent towards victims working in the trade . The solution was applicable whatever the fraudulent methods employed, including in cases of absence of information. According to the Court of Cassation, the purchaser's mistake as to the type of vehicle being sold is inexcusable when he himself, as an auto-industry professional, carried out the appraisal to determine the price . Subsequently, in 2001, the Court of Cassation reversed its position, ruling that the professional purchaser's duty to inform himself did not exclude fraud by non-disclosure, the existence of which always renders the mistake excusable . In other words, a serious mistake, even on the part of a professional co-contractor, does not exclude fraud on the grounds of non-disclosure. A buyer who is the victim of the seller's fraudulent non-disclosure of the fact that the property purchased had been infested by termites and treated twice is therefore entitled to request annulment of the sale, since the presence of injection holes partly concealed by the furniture left in place was not such as to inform him, as a layman, of the existence of previous treatments . The Court of Cassation confirmed this position, stating that a buyer who is the victim of fraudulent maneuvers by the seller, with the sole aim of extracting a large sum of money from him, is entitled to request cancellation of the agreement, the fact that the buyer himself acted in the belief that he was thereby making a substantial unjustified profit being irrelevant . Article 1139 of the Civil Code has codified this case law, stating that “a mistake resulting from fraud is always excusable”, which would appear to make the rule absolute.

CA Rennes, 1 December 1998, LawLex200500010331JBJ; CA Amiens, 8 April 2010, LawLex201200001274JBJ.

CA Aix-en-Provence, 26 June 2006, LawLex200700000760JBJ. See, in the same vein, CA Toulouse, 8 February 2012, LawLex201200000988JBJ, holding that the purchaser of a coffee-roasting appliance that required the walls to be pierced would not have signed without first requesting an estimate for the work and the authorization of his landlord, if he had had this information at the time of the initial canvassing.

Cass. civ. 1re, 14 May 1996, LawLex200500009090JBJ.

Cass. civ. 3e, 21 February 2001, LawLex200500005940JBJ.

Cass. civ. 3e, 14 March 2006, LawLex200600001986JBJ.

Cass. 1re civ, 22 June 2004, LawLex200500007325JBJ.

CA Nîmes, 2 May 2013, LawLex201400000431JBJ.

CA Orléans, 24 April 2017, LawLex201700000841JBJ.

CA Paris, 17 January 2006, LawLex200600001573JBJ.

CA Nancy, 26 November 2018, LawLex201800001870JBJ.

CA Bordeaux, 2 November 2017, LawLex201700001847JBJ.

Cass. civ. 3e, 22 June 2005, LawLex200600002189JBJ; Cass. civ. 1re, 28 May 2008, LawLex201400000772JBJ, holding that the seller's failure to inform the purchasers of a proposed caretaker's lodge constituted fraud, since the construction of the lodge, which deprived the purchasers of a wide view over a public green area, was a decisive factor in the purchaser's consent, such that had the purchaser been aware of it, he would certainly not have bought the property at the same price.

CA Aix-en-Provence, 20 May 1998, LawLex200500006857JBJ, holding that the purchaser's mistake was inexcusable, thus depriving his action for nullity on grounds of fraud of effect, since he had a specific responsibility to obtain information, given the professional nature of the transaction, and that elementary checks with the transferors or the administrative services would have easily and immediately revealed to him the exact administrative situation of the property sold.

CA Paris, 19 January 1996, LawLex200500007523JBJ, holding that two real estate professionals had committed an inexcusable mistake which rendered their action for invalidity of the sale for fraud ineffective, since they had acquired a plot of land with a view to building a complex of buildings without checking the provisions of the land use plan, available to all, which stated that the land could not be built on.

Business Contracts

134. Victim's mistake

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

134. Victim's mistake

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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