Business Contracts

A “ decisive mistake ” is one without which it is clear that the other party ("errans") would never have contracted, or would have contracted on different terms . To obtain annulment of the sale, the errans must prove both that the quality lacking in the thing purchased was essential, and that this mistake was a decisive factor for his or her consent.
The notion of “mistake” has evolved with the d …

Decisive mistake

A “ decisive mistake ” is one without which it is clear that the other party ("errans") would never have contracted, or would have contracted on different terms . To obtain annulment of the sale, the errans must prove both that the quality lacking in the thing purchased was essential, and that this mistake was a decisive factor for his or her consent.

The notion of “mistake” has evolved with the development of case law, divided between, on the one hand, the need to avoid encouraging claims for annulment of contracts and to preserve legal certainty, and on the other, the concern to respect the principle of “consensus” and to protect the victim of the mistake. This duality is reflected in the courts' assessment, sometimes objective (in abstracto), but above all subjective (in concreto), of the essential qualities of performance and the decisive nature of the mistake.

The well-know Spoerri case illustrates these jurisprudential hesitations and the limits of in concreto assessment. Although a buyer's mistake as to the authenticity of a painting is, in principle, a cause of invalidity, in this case, the question arose as to what constituted the authenticity of a painting. To be part of an artist's work, does a painting have to be actually realized by the artist, or does a commissioned work suffice? In an initial ruling , the Court of Cassation opted for the second option, striking down the trial courts on the grounds that they had failed to ascertain whether the purchaser of the painting in question had not made the artist's personal production of the work a substantial, decisive condition of his consent. The Court of Cassation thus recalled that a mistake decisive to consent must be assessed in concreto by the courts, taking into account the circumstances of the case. Then, in a second ruling , it reversed its position, returning to the question of mistake assessed in abstracto, noting that 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 understood to be the person who personally implements or executes it, Thus, a buyer who, on the basis of an erroneous statement in the auctioneer's catalog as to the actual author of the painting, acquires a work executed “" in the manner of”  and not by the artist himself, commits an excusable mistake that is decisive of his consent. The Court now holds that, in the case of public auction sales, if the information in the catalog is of particular importance, its decisive nature must be assessed in the light of the material qualities of the item expected by the buyer. Thus, no harm can result from inaccuracies concerning the composition of a table - made of oak veneer rather than oak - or from the existence of possible restorations, when the buyer has clearly prioritized the authenticity of the table by purchasing it at a price close to double the estimated value shown in the catalogue .

Article 1130, paragraph 2, of the Civil Code enshrines the principle of in concreto assessment, stating that “the decisive character [of mistake, fraud and duress, which it refers to interchangeably] is assessed in the light of the persons and the circumstances in which consent was given”.  Thus, purchasers of a business are entitled to have the sale rescinded on the grounds of mistake as to the essential qualities of the thing sold, when they have acquired the business in consideration of factors - the mistaken belief that it had its own clientele and misleading operating results - which have vitiated their consent to such an extent that they would not have contracted had they been aware of them .

On the other hand, the purchaser of a property who does not prove that her co-contractor knew that the exclusive use of the garden was a decisive factor for her, nor that without this attribute, she would not have entered into the contract, or would have done so under different conditions, is not entitled to rely on a mistake as to the essential qualities of the property acquired . Furthermore, according to the courts, the decisive nature of the mistake as to essential qualities is assessed in particular with regard to the professional capacity of the purchaser, specialized in the sale and purchase of new and used vehicles, who, if he had considered the absences of encumbrances on the vehicle acquired as a decisive condition of his consent, would not have neglected to request a title clearance certificate .

On the other hand, two types of mistake are in principle irrelevant: a mistake as to value, which is a form of civil wrong, and a mistake as to cause. 

A mistake as to value - which lies in an inaccurate economic assessment of the profitability of a deal based on accurate data  - is not a cause of invalidity, unless it is the consequence of a mistake as to the essential qualities of the thing sold . New Article 1136 of the Civil Code takes up this case-law solution, when it states that “a mistake as to value by which, without being mistaken as to the essential qualities of the service, a contracting party merely makes an inaccurate economic assessment of it, is not a cause of invalidity”. Sometimes referred to as a “monetary mistake”, a mistake as to value should not be confused with a mistake as to the price of the thing, which is based on such a fundamental misunderstanding between the contracting parties that it is considered to be an obstacle to the very exchange of their consent .

In principle, a mistake concerning a reason outside the scope of the contract is also irrelevant. However, the Court of Cassation has recognized an exception: “a mistake as to a cause of the contract which is external to its object is not a ground for invalidity of the contract, even if this cause would have been decisive, unless it has been made a condition of the contact” . In other words, unlike the essential quality, which can be tacitly agreed between the parties, the motive must be expressly stipulated in a clause in order for the agreement to be annulled . New Article 1135, paragraph 1, of the Civil Code codifies this judicial solution: “A mistake as to a mere motive, unrelated to the essential qualities of the performance or of the contracting party, is not a cause of invalidity, unless the parties have expressly made it a decisive element of their consent”.

Article 1130, paragraph 1 of the Civil Code enshrines the distinction between “principal mistake” and “incidental mistake” - previously applied only in the context of fraud - by stipulating that “mistake, fraud and duress vitiate consent when they are of such a nature that, without them, one of the parties would not have contracted or would have contracted under materially different conditions”.

Cass. civ. 1re, 5 February 2002, LawLex200500006032JBJ.

Cass. 1re civ, 13 février 2001, LawLex201200000795JBJ.

Cass. com, 30 May 2006, LawLex200700000125JBJ.

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

Cass. 1re civ, 21 October 2020, LawLex202000003055JBJ.

Cass. com. 18 June 1996, LawLex202200002538JBJ.

CA Versailles, 6 April 2021, LawLex202100001016JBJ.

CA Versailles, 17 December 2020, LawLex202000003790JBJ.

CA Versailles, 7 January 1987, LawLex200600002562JBJ. 

CA Riom, 28 January 1980, LawLex200500006435JBJ. On the other hand, when the sole purpose of an assignment is the transfer, without the transferees' knowledge, of an undertaking already deprived of the bulk of its assets and unable to make a profit, the transferees' consent is vitiated by a mistake concerning the essential qualities of the shares, and not their value, See Cass. com., 7 February 1995, LawLex200500006054JBJ.

See CA Paris, 7 March 1989, LawLex200500006132JBJ, holding that the seller's serious mistake on the amount of the asking price, exclusive of any valid agreement on the thing and the price, constitutes grounds for invalidity of the sale.

Business Contracts

128. Decisive mistake

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128. Decisive mistake

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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