Business Contracts

Former Article 1110 provided that mistake was a cause of invalidity of the contract only when it related to the very substance of the thing which was its object, or to the person with whom one intended to contract if consideration of that person was the principal cause of the contract. Initially, the sale of works of art was the obvious focus of mistake. But the courts adopted an extensive interpr …

Mistake as to an essential quality of the thing sold

Former Article 1110 provided that mistake was a cause of invalidity of the contract only when it related to the very substance of the thing which was its object, or to the person with whom one intended to contract if consideration of that person was the principal cause of the contract. Initially, the sale of works of art was the obvious focus of mistake. But the courts adopted an extensive interpretation of the “thing” within the meaning of former Article 1110, with the result that mistake concerned both the substance and a “material” quality of the thing or service . Current Article 1132 codifies these judicial solutions, providing that “ a mistake of law or of fact, unless inexcusable, is a cause of invalidity of the agreement when it relates to the essential qualities of the performance due or to those of the co-contractor” .

Article 1133 of the Civil Code defines the “essential qualities of the performance” as “those which have been expressly or tacitly agreed and in consideration of which the parties have contracted” . 

Thus, the parties may agree that whether or not the item being sold meets the eligibility criteria for a tax exemption scheme constitutes an essential quality .

In practice, qualities likely to be deemed essential are generally linked either to the essential characteristics of the item, or to its intended use.

Thus, according to the courts, essential qualities include:

- for a work of art: its authenticity, origin , or age ;

- for a jewel: the purity and grade of the stones set , the nature of the metal used or the authenticity of the pearls used ;

- for a vehicle: odometer reading, horsepower, age, engine conformity to the model purchased , roadworthiness , new condition  or serviceability , or length of contractual warranty ;

- for a motorcycle: its year of origin , its resistance to corrosion or its appearance .

Mistake is a ground for invalidity when it affects the very essence of the thing which is the subject matter, i.e. the nature of the good sold, but also, and more specifically, its layout and use, in consideration of which the parties have contracted . The existence of a bathroom in an apartment intended for residential use is an essential quality of the thing sold . The essential quality of a thing may therefore depend on its ability to fulfill its intended use: when the sole purpose of a transfer is to transfer, without the transferees' knowledge, a company that has already been deprived of a large part of its assets and is unprofitable, the transferees' consent is vitiated by a mistake as to the essential characteristics of the shares, since the transferred company, which is in reality unable to implement its corporate purpose and pursue a profitable economic activity, is no longer of any use to the transferees .

- for a building sold for rent: the possibility of leasing it ;

- for a mobile home: its mobility, as well as the proper functioning of the internal and independent water supply ;

- for a boat: the ability to take on board the number of passengers specified without risk ;

- for a forklift truck: its ability to move pallets in a warehouse ,

- for wheat: its ability to be consumed .

The adaptability of one thing to another can also constitute an essential quality: a purchaser who buys two pieces of farm machinery together for a lump sum, but finds that they are incompatible, is entitled to have the sale invalidated for mistake, since, in his view, given the circumstances of the case, the essential quality of one lay in its compatibility with the other .

According to the Court of Cassation, the trial courts have full discretion in assessing which qualities in the agreement are to be considered essential in the eyes of the parties . They often proceed in abstracto, verifying whether the quality in question is commonly perceived as essential. Thus, the authenticity of a painting must be assessed taking into account the fact that, in the absence of a reservation on the part of the seller, its actual creator is, in principle, the person who has personally realized or painted it . Where the quality is objectively essential, the contracting partner of the victim of the mistake is deemed to have been aware of it, and the agreement may in principle be called into question. Thus, a buyer who acquires a piece of jewelry whose color has faded a month later, is entitled to demand annulment of the sale on the grounds of mistake, since the color of the jewelry was a determining factor in his or her purchase . On the other hand, when the essential quality is subjective in nature, the burden of this double proof increases, as the victim must also establish that this quality was part of the agreement  - in other words, that the other party was aware of it - at the time the agreement was concluded. According to the Court of Cassation, an essential quality that has entered the contractual sphere is exempt from contingencies . Sometimes, the assessment of the essential quality is carried out in concreto, i.e. with regard to the state of mind of the errans at the time of the agreement, and then tends to merge with that of the determining character of the mistake on consent, also carried out in concreto. Finally, retroactivity is not taken into account on the appraisal of the mistake as to material qualities, which is assessed at the time of conclusion of the contract , even if the existence of vitiated consent at the date of sale, in particular a mistake as to an essential quality of the thing sold, can be assessed on the basis of elements subsequent to the formation of the contract .

Cass. 1re civ., 23 February1970, LawLex202200002648JB, noting that an error of substance, which refers not only to the material of which the thing is composed, but also to the substantial qualities of authenticity and origin, is constituted when the purchaser buys two Marquise chairs, instead of two, as displayed in the sales catalog.

In the latter case, Article 1134 of the Civil Code specifies that a mistake as to the essential qualities of the contracting party is a ground for invalidity only in contracts concluded intuitu personae.

CA Pau, 15 June 2012, LawLex201300000555JBJ; CA Douai, 15 December 2011, LawLex201200000747JBJ, finding that the recent design and construction of a vehicle constitutes an essential quality.

CA Colmar, 26 August 2022, LawLex202200006445JBJ.

CA Angers, 7 June 2017, LawLex201700001062JBJ, holding that the existence and duration of the contractual warranty in a sale of used vehicles is a material element determining the consent of the parties, so that a mistake by the buyer as to the duration of this warranty, which was wrongly quoted to him by the seller as being twelve months when in fact it was only six months, justifies the annulment of the sale.

CA Amiens, 29 January 2004, LawLex200600000599JBJ.

CA Rennes, 6 September 2001, LawLex200500005573JBJ.

CA Metz, 15 December 2011, LawLex201200000750JBJ.

CA Rennes, 3 January 2017, LawLex201700000099JBJ.

Cass. com, 1 October 1991, LawLex200500006053JBJ. By contrast, see Cass. com, 21 October 2020, LawLex202100005570JBJ, holding that the transferee is not entitled to claim, on the grounds of a mistake affecting the essential qualities of the shares acquired, the existence of accounting irregularities discovered after the transfer and affecting the figures and data presented, particularly with regard to working capital requirements and cash flow, insofar as the adjustments proposed by the expert in respect of the disputed items do not prevent the undertaking transferred from implementing its corporate object, nor impair its ability to continue as a going concern.

CA Amiens, 4 December 2018, LawLex200600000599JBJ; CA Rouen, 26 January 2022, LawLex202200000667JBJ.

Cass. 3e civ, 3 May 2018, LawLex201800001374JBJ: the purchaser of an apartment sold for rent, which, following a visit by the municipal health and hygiene service, turned out to be less than 9 square meters in area, instead of the 13.49 square meters indicated in the deed of sale, which, in application of a departmental health regulation, precluded any possibility of renting it out, committed a mistake concerning an essential quality of the property sold, justifying the annulment of the sale, given that by purchasing the property, the purchaser intended to have full ownership of the property, including the possibility of renting it out, and that this was an essential quality of the property sold, falling within the scope of the contract and a decisive factor in the purchaser's consent.

A mistake concerning the exportability of the product purchased may justify annulment of the sale, See CA Aix-en-Provence, 12 February 2009, LawLex201200000758JBJ.

CA Paris, 6 July 2001, LawLex200500009153JBJ.

 CA Caen, 26 March 2013, LawLex201300000495JBJ, finding that a buyer who acquires a boat with more than 45% excess weight compared to the weight recorded in the ship's administrative documents, which implies that the boat cannot hold the specified number of people without endangering the lives of the occupants, is entitled to request cancellation of the sale.

CA Colmar, 27 April 2010, LawLex201200000748JBJ.

CA Versailles, 27 October 2011, LawLex201200000800JBJ.

Cass. com. 13 March 2012, LawLex201200000977JBJ

Cass. civ. 1re, 26 February 1980, LawLex200500005876JBJ.

Cass. 1re civ, 15 November 2005, LawLex200600001327JBJ.

CA Paris, 23 March 2006, LawLex200700000641JBJ.

CA Paris, 19 December 2012, LawLex201300000505JBJ, assuming that the brand-new nature of the equipment supplied fell within the scope of the contract, but dismissing the action on the grounds of the buyer's gross and inexcusable mistake, given the clarity of the contractual documents signed.

An uncertainty - accepted by the buyer and seller at the time of formation of the agreement - as to the authenticity of the work purchased, precludes any subsequent allegation of a mistake as to its essential qualities, in the event that authenticity has become certain, Cass. civ. 1re 24 March 1987, Fragonard case, LawLex201400000572JBJ.

Cass. com, 22 June 2022, LawLex202300000004JBJ.

Cass. 3e civ, 23 May 2007, LawLex201200000765JBJ.

Cass. 1re civ, 11 March 2003, LawLex200500005872JBJ. See earlier ruling Cass. 1re civ. 13 December 1983, LawLex202300008027JBJ.

Cass. 1re civ. 23 February 1970, LawLex202200002648JBJ.

CA Besançon, 11 April 2006, LawLex200700000643JBJ.

CA Colmar, 6 October 2000, LawLex200500006844JBJ.

CA Nouméa, 28 October 2021, LawLex202100005724JBJ.

CA Metz, 18 May 2006, LawLex200700000639JBJ.

Cass. 1re civ, 28 June 1988, LawLex200500004329JBJ.

Business Contracts

127. Mistake as to an essential quality of the thing sold

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127. Mistake as to an essential quality of the thing sold

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