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French Consumer Law

The mistake as to value generally stems from an incorrect economic assessment of the profitability of a transaction and is reflected in a significant imbalance between the benefits provided for in the contract and cannot, in principle, be successfully invoked by the parties to the contract to escape their contractual obligations . According to the Court of Cassation, when a sale has no purpose oth …

Mistake as to value

The mistake as to value generally stems from an incorrect economic assessment of the profitability of a transaction and is reflected in a significant imbalance between the benefits provided for in the contract and cannot, in principle, be successfully invoked by the parties to the contract to escape their contractual obligations . According to the Court of Cassation, when a sale has no purpose other than to transfer, unbeknownst to the assignee, an undertaking already deprived of a large part of its assets and unlikely to be profitable, the consent of the buyer is vitiated by a mistake as to the essential qualities of the shares not as to their value .

The distinction between mistake as to essential qualities and mistake as to value is all the more difficult to draw since the former very often results in a depreciation of the value of the thing and inevitably leads to an imbalance in the performance between the seller and the buyer. In a famous case involving the sale of a vase covered in “lapis” which, after the conclusion of the contract, proved to be worth less than its purchase price, the Court of Cassation  held that there could be no mistake by the buyer as to the essential quality of the vase purchased - in this case, what it is made of - when the terminology “lapis lazuli” includes both natural lapis and colored lapis. The buyer had only made an erroneous assessment of the value of the vase, based on accurate data, the documents produced by the seller attesting that the vase was indeed composed of a clear stone entitled to use the appellation “lapis”. The mistake as to its value, which implies an injury, is not a cause of nullity of property sales, unless it is the consequence of a mistake as to the essential qualities of the thing . The new Article 1136 of the Civil Code reiterates this solution and states that “an mistake as to the value by which, without being mistaken as to the essential qualities of the object, a contracting party only makes an inaccurate economic assessment, is not a cause of nullity” .

The courts sometimes use the term “monetary mistake” to designate a mistake as to the value . Monetary mistake should not be confused with a mistake as to the price of the thing   - sometimes caused by a material mistake  - which is based on a misunderstanding between the contracting parties so fundamental that it is considered to be an obstacle to the very exchange of their consent . Similarly, according to the Court of Cassation, a mistake which relates to the very object of the sale and prevents the parties from validly consenting, even if it is an inexcusable mistake , results in the cancellation of the sale.

 Cass. 3e civ., 31 March 2005, LawLex200500006308JBJ: the erroneous assessment of the profitability or economic viability of a construction lease in which it was stipulated that the buildings would become the property of the lessor at the end of the lease without compensation to the lessee, does not constitute an error on the substance, such as to vitiate the consent of the lessee, on whom it was incumbent to assess the economic value and the obligations he incurred.

  Cass. com., 1 October 1991, LawLex200500006053JBJ: the Court considers that the object of the transfer is the company itself; it follows that the situation of the transferred assets becomes a substantial quality of the shares, subject of the transfer, see also Cass. com., 7 October 1995, LawLex200500006055JBJ.

 Cass. com., 14 October 1981, LawLex200500006002JBJ.

 CA Riom, 28 January 1980, LawLex200500006435JBJ, upheld by Cass. 1re civ., 14 October 1981, LawLex200500006002JBJ.

CA Angers, 24 November 2020, LawLex202000003351JBJ.

 It is necessary to distinguish between the monetary error, which results from an erroneous economic assessment made on the basis of exact data, and the error in the qualitative value of the thing, the consequence of an error on a substantial quality, CA Versailles, 7 January 1987, LawLex200600002562JBJ.

 CA Paris, 7 March 1989, LawLex200500006132JBJ: as a sale is characterized by the search for a fair price on the part of the parties and especially the seller, the gross error of the latter on the amount of the price requested, exclusive of any valid agreement on the thing and the price, constitutes a cause of nullity of the sale. For an example of an error on the price relating to the monetary unit used,  CA Orléans, 13 May 2004, LawLex201400000628JBJ.

 Error of calculation or labeling, for example: See Cass. 3e civ., 12 June 1991, LawLex200700000608JBJ: an error, purely material, and independent of the professional expertise of sellers, on the indication of the price of the thing sold must be regarded as excusable, as it prevented the meeting of the parties' wills.

 The “obstacle” error is an error of extreme gravity, which does not only vitiate the consent of the parties and affect the formation of the contract, but prevents any meeting of wills. Judges generally sanction this type of error by absolute nullity or non-existence: see, for example, CA Orléans, 13 May 2004, LawLex201400000628JBJ: error on the price relating to the monetary unit used - the buyer intending to give 10,979.28 F and the seller to receive 10,979.28 Euros for the same product - prevents any exchange of consent between the parties, meaning that the contract of sale was not formed.

 Cass. 3e civ., 16 December 2014, LawLex201500000422JBJ.

French Consumer Law

365. Mistake as to value

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365. Mistake as to value

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise