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French Consumer Law

The cancellation of the sale raises the question of the scope of the restitutions. Can the seller deduct from the sale price compensation for the use made of the thing by the buyer, which may have diminished its value? Should the restitution of the thing include its accessories?
1)  Occupancy or wear-and-tear allowance
Article 1644 of the Civil Code allows the purchaser of a thing affected by a de …

Effects

 The exercise of an action for rescission which leads to the cancellation of the contract of sale, requires the buyer to return the thing and the seller to refund the price. The purpose of these reciprocal restitutions is to return the parties to the situation they would have been in if they had not contracted.

When the buyer requests the return of the price of the defective thing, he must return the thing . The action is admissible even if he has not spontaneously proposed the return of the thing . Similarly, the judgment declaring the cancellation of the contract automatically entails the obligation for the buyer to return the thing, without having to specify it . In principle, the restitution is carried out in kind. If the thing breaks down into a set of materials, it can be returned in kind and in value for those which have already been resold . In this case, the court retains the actual value of the thing on the day of the sale, which corresponds to the price paid, and not to the price initially agreed upon . Furthermore, the buyer cannot be required to incur excessive costs to return the thing: it is up to the seller to pay the costs for the recovery of the thing . Thus, the order to reimburse the buyer may be accompanied by an injunction, subject to a penalty payment, to recover the thing  or to remove the installation  from the date of notification of the judgment. However, the court ruling that the sale is cancelled  may not enjoin the seller to recover the vehicle “at the latest in the month following the notification of the judgment, failing which the buyer will be free to dispose of it as he sees fit”, insofar as the retroactive effect of the annulment of the contract precludes the buyer from disposing of the thing after restitution of the price .

However, the restitution of the thing can sometimes be difficult when, due to the defect, it has been destroyed , deteriorated , used , dismantled  or repaired at the buyer's initiative . The redhibitory action nonetheless remains admissible  if the unavailability of the good is directly related to the defect affecting the thing and, thus, the seller is solely responsible . In fact, Article 1647 of the Civil Code stipulates that if the thing has perished as a result of its poor quality, the loss is for the seller. In this case, the buyer is only required, except in case of fault on his part, to return the thing in the condition it was in at the time of cancellation of the contract .

The seller must return to the buyer the price he effectively received on the conclusion of the contract of sale. It may also, when it is established that it knew of the defect of the thing, be ordered to pay interest from the date of payment .

When the sub-purchaser chooses to act directly against the original seller, only the original seller is bound to return the price . Indeed, in the event of cancellation of the sale, the obligation to return the price lies exclusively with the person who recovers the thing. However, the original seller cannot be required to return to the sub-buyer any more than it received from the intermediary seller, i.e. a sale price free of the commercial margin invoiced to the sub-purchaser . The difference between the price of the two sales may, however, be allocated to the sub-purchaser as compensation for his injury . However, if the original seller has not been paid by the intermediary seller, the return of the price to the sub-purchaser is excluded .  Finally, when the sub-purchaser sues the seller and the manufacturer or the original seller is called to the proceedings in warranty, the latter cannot be held jointly and severally liable with the final seller to reimburse the price, as only the seller recovers the restituted vehicle.

The return of the price cannot be made in the form of a simple “credit note” imposed by the seller instead of the amount due . In principle, the refund must cover all the sums collected. In the automotive sector, the payment of the price by the buyer often consists in a cash payment with the transfer in lieu of payment of a used car. This recovery mechanism authorizes the buyer to pay a part of the price by giving his old vehicle to the seller. In principle, the cancellation of the sale should result in the return of the used vehicle, in addition to the reimbursement of the portion of the price paid in cash. However, the court considers that the seller must return the entire sale price, irrespective of the terms of its payment . In addition, when the buyer does not claim the return of the vehicle in kind, but only its value, the seller should only be ordered to reimburse the sums paid in cash .

  Cass. com., 7 July 1998, LawLex200700000652JBJ: the court  cannot order the seller to refund the price, without requiring the buyer to return the defective thing.

  Cass. com., 8 July 2008, LawLex201200001491JBJ.

 Cass. com., 7 February 1995, LawLex200500003693JBJ.

 CA Bordeaux, 27 March 2014, LawLex201400001817JBJ, concerning fertilizer.

 CA Nancy, 15 December 2005, LawLex200600001720JBJ: when the vehicle sold has been disassembled for the purposes of the expert appraisal, it cannot be considered as non-returnable to the seller, who can take it back as it stands, reassemble it or have it reassembled at its expense, to the extent that, by the retroactive effect of the cancellation, it is deemed to have always been the owner.

 CA Nancy, 19 May 2005, LawLex200600001763JBJ.

 Cass. com., 5 July 1988, LawLex200700000747JBJ: the exercise of the redhibitory action necessarily presupposes the restitution of the thing by the buyer, even if it has become unusable because of the defect.

 Cass. 1re civ., 8 December 2009, LawLex201200001431JBJ.

 Cass. 1re civ., 4 April 1991, LawLex201600000260JBJ.

 Cass. com., 22 May 2012, LawLex201200000922JBJ. 

 Cass. 1re civ., 27 January 1993, LawLex200500005481JBJ; CA Limoges, 14 February 2012, LawLex201200001598JBJ; Cass. com., 4 June 2013, LawLex201400000360JBJ; CA Grenoble, 12 May 2014, LawLex201400002037JBJ. Cf. CA Rouen, 21 March 2007, LawLex201200001868JBJ, holding that the manufacturer is obliged to guarantee the intermediate seller up to the amount of the sums received from the final buyer.

 Cass. 1re civ., 25 May 2016, LawLex201600001056JBJ.

 CA Rouen, 28 January 2009, LawLex201200001830JBJ.

 Cass. 1re civ., 4 March 1997, LawLex200700000662JBJ.

 Cass. com., 18 May 2017, LawLex201700000957JBJ; Cass. civ. 1re, 18 October 2017, LawLex201700001750JBJ. see also CA Rennes, 4 July 2017, LawLex201700001275JBJ; 2 March 2018, LawLex201800000430JBJ; 18 May 2018, LawLex201800000739JBJ.

 CA Paris, 14 January 1997, LawLex200700000660JBJ.

 CA Nancy, 15 December 2005, LawLex200600001720JBJ.

 Cass. com., December 5, 1995, LawLex200500005015JBJ.

 Cass. com., 8 July 2003, LawLex200300003412JBJ.

 Cass. 1re civ., 8 March 2005, LawLex200600001644JBJ.

 CA Limoges, 14 February 2012, LawLex201200001598JBJ, concerning a vehicle.

 CA Pau, 18 April 2013, LawLex201400001567JBJ; CA Riom, 15 February 2016, LawLex201600000456JBJ.

 CA Grenoble, 12 May 2014, LawLex201400002037JBJ.

Cass. 1re civ., 17 October 2018, LawLex201800001600JBJ.

 Cass. com., 10 May 2000, LawLex200500004312JBJ.

Conditions

The cancellation of the sale raises the question of the scope of the restitutions. Can the seller deduct from the sale price compensation for the use made of the thing by the buyer, which may have diminished its value? Should the restitution of the thing include its accessories?

Article 1644 of the Civil Code allows the purchaser of a thing affected by a defect to return this thing to the seller and to have the price paid at the time of purchase refunded. The seller is liable to recover a thing whose value is affected or diminished by its use, whereas the buyer, who is reimbursed the full amount paid, has finally enjoyed the item free of charge. It is therefore common, within the framework of the action for rescission, for the seller to claim an allowance for the occupancy or wear-and-tear of the thing for the period during which the buyer used the thing. As the cancellation of the sale, in principle, has the consequence of returning the parties to the situation they were in prior to the conclusion of the contract, this request was, in the past, considered legitimate  provided that the seller was not a professional  and that he was, in good faith, unaware of the existence of the defects .

The Court of Cassation abandoned this solution: it now refuses to grant the seller any compensation for wear , even on the grounds of unjust enrichment. The courts consider that there is a legal cause for the restitution of the price, which is the cancellation of the sale arising from the implementation of the warranty against latent defects  and that the buyer cannot remove the use he made of the thing in good faith . The seller may not claim a reduction of the price due to the use of the thing sold or the wear and tear resulting from this use , unless the depreciation of the thing results not from its age, but from the use made of it by the buyer . Regarding the sale of vehicles, it therefore cannot limit its obligation to return the price to the Argus rating on the day of the request .

The exclusion of any compensation for latent defects is in contrast to the solution adopted in the area of conformity, where the cancellation of the sale can be accompanied by an indemnity to compensate not only the use, but the depreciation of the thing. Some legal commentators justify this difference in treatment by the fact that a thing affected by a latent defect being unfit for its use, its wear does not come into consideration, while the non-compliant thing is able to function. However, the defect may only diminish the use of the thing, without making it entirely unfit for its intended purpose. Above all, in both cases, there is a cancellation, which should produce the same effects.

The contract of sale may relate, not to a thing, but to a composite good consisting of several elements. The divisible or non-divisible nature of the good makes it possible to determine the scope of the action for rescission. If the vitiated element is divisible from the other constituent elements of the thing, the cancellation of the sale will only relate to this element. If, on the contrary, if forms, with the other elements, an indivisible whole, the cancellation of the sale will concern the entire good.

To determine the divisibility or indivisibility of an obligation, the courts refer to the will of the parties and the common intended purpose of the elements which make up the good or to their interdependence. It was thus held that the sale of equipment for the same activity must be cancelled in its entirety, even if the defects only affect some of its elements . The courts consider that the sale forms a whole and that the accessory must follow the principal. Regarding the sale of vehicles, the cancellation implies the return of the vehicle but also the accessories that were incorporated at the buyer's request . The same applies to the sale of a tractor that has a defective trailer, when the conservation of the tractor without its trailer would no longer serve any useful purpose for the buyer . In other cases, the cancellation of the contract of sale in all its components is justified by the concern to preserve the homogeneity of the good. This is the case of the sale of furnishings  or a fitted kitchen , when the replacement of part of the defective elements would destroy the homogeneity sought. However, the divisibility of the thing is imposed when it is obvious. Such is the case of a parking space, an accessory to the sale of an apartment unfit for its intended purpose, which constitutes a lot detachable from the rest of the property sold .

  Cass. 3e civ., 26 January 1994, LawLex200600001743JBJ; CA Lyon, November 10, 2005, LawLex200600001699JBJ.

  Cass. 3e civ., 7 October 1997, LawLex200500005033JBJ: a presumption of knowledge of the defects is placed on the professional seller.

  CA Lyon, 14 January 2011, LawLex201200001708JBJ.

  Cass. 1re civ., 6 February 1996, LawLex200500004351JBJ, upholding CA Caen, 22 April 1993, LawLex200400001846JBJ.

  CA Rennes, 7 September 1995, LawLex200700000665JBJ.

  CA Paris, 9 February 1990, LawLex200700000675JBJ.

 CA Paris, 8 December 1998, LawLex200700000666JBJ.

  Cass. 3e civ., 17 January 1988, LawLex200700000661JBJ.

  Cass. 1re civ., 21 March 2006, 2 cases, LawLex200600000932JBJ and LawLex200600000933JBJ; 30 September 2008, LawLex201200001465JBJ; 19 February 2014, LawLex201400000332JBJ. See also Cass. 1re civ., 11 March 2003, LawLex200400003428JBJ. See also CA Rouen, 21 March 2007, LawLex201200001868JBJ; CA Lyon, 22 September 2011, LawLex201200001690JBJ; 17 November 2011, LawLex201200001892JBJ; 14 October 2014, LawLex201400001158JBJ; CA Angers, 24 January 2012, LawLex201200001671JBJ; CA Colmar, 7 May 2012, LawLex201200001549JBJ.

  CA Rouen, 28 January 2009, LawLex201200001830JBJ; CA Limoges, 14 February 2012, LawLex201200001598JBJ.

 CA Versailles, 12 January 2012, LawLex201200001614JBJ.

 CA Bourges, 29 January 2009, LawLex201200001884JBJ; CA Riom, 8 April 2013, LawLex201400001650JBJ; CA Rennes, 26 February 2016, LawLex201600000528JBJ.

  CA Rennes, 10 October 2008, LawLex201200001881JBJ; CA Pau, 31 May 2011, LawLex201200001695JBJ, regarding the negligence and lack of care by the buyer in the conservation of a vehicle affected by defects; CA Riom, 16 June 2011, LawLex201200001693JBJ.

 CA Metz, 20 November 2013, LawLex201400000318JBJ.

  CA Grenoble, 28 February 2001, LawLex200300003632JBJ.

French Consumer Law

616. Effects

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

616. Effects

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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