Mistake (Erreur) in French Contract Law: Which Errors Annul a Contract

Mistake (erreur) in French contract law: which errors annul a contract

French law annuls a contract concluded under a mistake, but only under conditions that Articles 1132 to 1136 of the Civil Code state with precision. The mistake must bear on the essential qualities of the performance due or, in contracts where the person matters, on the counterparty; a mistake of law counts as much as a mistake of fact. Two errors are excluded by the text itself: the false estimation of the value of the performance, and the mistake on a mere motive that never entered the contract. And even an operative mistake annuls nothing if it was inexcusable, or if it did not determine the consent of the party who invokes it.

Each of those conditions has generated its own body of decisions: what counts as an essential quality, when the person of the counterparty is a decisive cause, how a motive can be made a condition of the contract, which parties are refused annulment because they should have known better, and how the relative nullity is pleaded, proved and time-limited. This article takes the conditions in that order.

Could your French contract be annulled for mistake?

A defect of consent: the framework mistake shares with deceit and duress

Mistake is the first of the three defects of consent, alongside dol (deceit) and duress. The framework common to the three sets the stage for everything that follows. First, a defect of consent must be distinguished from the absence of consent: the capable party who was not of sound mind when contracting does not invoke a vitiated consent but the lack of any consent at all, whatever the cause of the unsoundness of mind.

Second, the existence of the defect is appraised at the day the contract was concluded. The application to the contract of new provisions must therefore be discounted where their existence could not have been envisaged by the parties on that day (Cass. 1e civ., 12 juill. 2007, n° 06-15.090). The judge may nonetheless rely on elements posterior to the date of conclusion to establish that the defect existed at that date (Cass. 3e civ., 13 janv. 1999, n° 96-18.309, decided on duress but transposable by analogy to mistake and deceit). The withdrawal of a building permit on land sold to be built on illustrates the line. If the defect of unbuildability existed at the day of the sale, the sale is annulled, even though the defect was only established afterwards (Cass. 3e civ., 12 juin 2014, n° 13-18.446). If the land was buildable at the date of the sale and the impossibility of building appeared only later, the sale stands (Cass. 3e civ., 13 nov. 2014, n° 13-24.027; Cass. 3e civ., 24 nov. 2016, n° 15-26.226).

Third, where the contract was concluded through a representative, the acts of the representative accomplished within the limits of his powers and which are at the origin of the defect engage the represented party (Cass. com., 13 juin 1995, n° 93-17.577; Cass. 3e civ., 5 juill. 2018, n° 17-20.121).

Fourth, every defect of consent annuls the contract only if it determined the commitment of the party who invokes it: without the defect, that party would not have contracted, or would have contracted on substantially different conditions. The determining character is appraised with regard to the persons concerned and the circumstances in which consent was given (Article 1130, paragraph 2, of the Civil Code).

Fifth, the sanction. Mistake, deceit and duress are causes of relative nullity of the contract under Article 1131 of the Civil Code. The party whose consent was vitiated can renounce that relative nullity by voluntarily performing its irregular commitment with knowledge of the defect affecting it (Cass. com., 21 avr. 2022, n° 20-16.295). A party discovering a mistake should therefore take a position before continuing to perform.

Mistake on the essential qualities of the performance

The mistake that vitiates consent must bear on the essential qualities that were expressly or tacitly agreed and in consideration of which the parties contracted (Article 1133, paragraph 1, of the Civil Code). The judge must ascertain whether the substantial quality on which the parties expressly agreed in their contract was satisfied or not by the party bound to respect it (Cass. com., 22 juin 2022, n° 20-11.846). The mistake is thus measured against the characteristics of the performance as the contract itself defines it, and the courts have recognised it in four recurring forms.

Mistake on the makeup of the thing. The error can concern the matter of a corporeal thing: the nature of the flat sold (Cass. 3e civ., 21 nov. 1973, n° 72-13.336), the acquisition of company shares giving a right to a flat where the buyer believed he was acquiring the flat itself (CA Paris, 8 juill. 1966), or kitchen units ordered as solid wood which proved to be chipboard (CA Aix, 12 juill. 1979). It can equally concern the content of a right: the belief in the existence of a fonds de commerce (business as a going concern) (CA Aix, 24 juin 1982), in an entire right of ownership where the right was only undivided (CA Lyon, 25 mai 1977), in an inherited right of nue-propriété (bare ownership) where the right bore on full ownership (Cass. civ., 17 nov. 1930), in the cover of an insurance contract (Cass. 1e civ., 25 févr. 1986, n° 84-16.882), or in the existence of a taxi licence which could not exist because the administrative parking authorisation was untransferable (CA Montpellier, 26 sept. 2001). At the extreme, the mistake on the very nature of the thing lies so far from the objectives of the contract that it has been qualified an erreur-obstacle (a mistake preventing any meeting of the consents) (Cass. 3e civ., 1 févr. 1995, n° 92-16.729; Cass. com., 15 avr. 2008, n° 07-12.645; Cass. 3e civ., 21 mai 2008, n° 07-10.772). That mistake entails the nullity of the act even where it is inexcusable (Cass. 3e civ., 16 déc. 2014, n° 14-14.168). It has been sanctioned by absolute nullity (Cass. 3e civ., 15 avr. 1980, n° 78-15.836), but it has also been held that the nullity is relative where no general interest is at stake (Cass. 3e civ., 26 juin 2013, n° 12-20.934, on the designation of the lots of a co-owned building), the reading consistent with the case law that distinguishes absolute from relative nullity on the sole criterion of the interest protected (Cass. com., 22 mars 2016, n° 14-14.218) and with Article 1131 itself. The mistake can finally concern the conformity of the thing with the regulation that conditions its validity: the non-conformity of a website with the requirements of the General Data Protection Regulation was held to constitute, for the company that had commissioned the site, a mistake on its essential qualities justifying the nullity of the contract with the provider (CA Grenoble, 12 janv. 2023, n° 21/03701).

Mistake on the properties of the performance due. The error can bear on any aspect of the thing, whatever the contract. The courts have annulled for mistake on the aptitude of land or a building for its intended use, including insufficient area and unbuildability (Cass. 3e civ., 30 mars 2005, two decisions), the impossibility of operating the establishment envisaged (Cass. civ., 25 mai 1972), and the ignorance of a partial expropriation already decided (Cass. civ., 13 janv. 1926); on the characteristics of a car, its power (CA Nancy, 18 juill. 1933) or its age and mechanical condition (CA Paris, 1 mars 1975); on the protection expected of sleeves bought to shelter mussel spat (Cass. com., 28 oct. 1980); on the authenticity of a painting, a ground of abundant case law (Cass. 1e civ., 31 mai 2007, n° 05-17.203; Cass. 1e civ., 30 sept. 2008, n° 06-20.298; CA Paris, 31 mai 2022, n° 19/04497); on the reach of the security interests attached to a liabilities guarantee promised in a share sale (CA Paris, 6 avr. 1986); on the aptitude of IT equipment (CA Paris, 14 nov. 1990); and on the cost of a rental and maintenance contract for a cheque reader, where the trader, canvassed and signed up the same day, had not understood that each cheque passed through the machine triggered a telephone call generating a bill out of all proportion to the unrecoverable cheques (CA Versailles, 3 févr. 2000). The limit: the mistake can be set aside where the circumstances should have led the party invoking it to inform itself about the thing (CA Versailles, 13 déc. 2016, n° 16/07240).

Mistake on the monetary appraisal of a substantial quality. Distinct from the excluded mistake on value, this error misjudges in money a quality of the thing itself. It was retained for the cultivation value attributed to rural land given the duration and importance of the restoration works required (Cass. soc., 4 mai 1956), and for shares sold at their nominal value of 15 euros, out of all measure with their objective value of nearly 490 euros, by an associate little versed in business (Cass. com., 12 févr. 2008, n° 06-19.204). It was also retained for the sale at a derisory price of full ownership by heirs who believed they had inherited only bare ownership (Cass. req., 17 nov. 1930): the mistaken party may thus invoke an error on its own performance, not only on what it was to receive. The mistake is however set aside where the party invoking the derisory price had every means of forming a correct idea of the value of the thing (Cass. com., 19 juill. 1971, n° 68-13.737).

Mistake on the juridical nature of the performance due. The party invokes a mistake where it concluded a deferred loan instead of an ordinary loan (Cass. com., 18 juill. 1956), a mutual insurance contract instead of a fixed-premium contract (Cass. req., 6 mai 1878), a sale instead of an exchange (Cass. civ., 18 mars 1980), an unconditional contract instead of a contract with a withdrawal payment (Cass. civ., 14 mai 1985), an optional contract for the sale of shares instead of a contract for the purchase of options (CA Paris, 27 juin 1989), or a rental instead of a sale (CA Paris, 13 déc. 1991). The same holds where a party took for the contract to be concluded, at the price it contained, a document transmitted for indicative purposes only.

The person, the motives and the value: what Articles 1134 to 1136 admit and exclude

Mistake as to the person. The party mistaken about the person of its counterparty can invoke the error only if the personality of the person concerned was the determining cause of the contract (Article 1134 of the Civil Code; CA Versailles, 22 déc. 2000). Within that limit the mistake can bear either on the identity of the counterparty (CA Rouen, 4 mars 1969) or on a quality of the counterparty (Cass. civ., 20 mars 1963; Cass. com., 19 nov. 2003). The courts have refused annulment in a series of cases where the error on identity or quality was not determining, which confirms that in ordinary commercial dealings, where the contract would have been concluded with anyone offering the same terms, the ground rarely succeeds.

Mistake on the motives. The error on a simple motive, foreign to the essential qualities of the performance due or of the counterparty, is not a cause of nullity, even where that motive was determining (Article 1135, paragraph 1, of the Civil Code; Cass. com., 11 avr. 2012, n° 11-15.429). So a party's mistake on the disappearance of the preferential right securing a debt it guaranteed (Cass. civ., 26 mai 1891), or on the usefulness the contract holds for it (Cass. com., 11 avr. 2012, cited above), annuls nothing. The rule has one statutory exception: the mistaken motive is expressly a cause of nullity of a donation (Article 1135, paragraph 2). And it has one contractual escape: the motive counts if an express intention made it enter the contractual field by erecting it into a determining condition of consent. The profitability of a building sold was thus disregarded as not having entered the contractual field (Cass. 3e civ., 5 nov. 2020, n° 19-21.575), while it was taken into account where it had (Cass. 3e civ., 18 avr. 2019, n° 18-10.693). The case law illustrates the mistaken motive with the tenant who renounced his lease on the false affirmation of the notaire (civil-law notary) that the lease was void (Cass. req., 13 déc. 1927), the cinema operator who promised to indemnify an artist whose equipment burned because he wrongly believed himself legally bound to do so (Cass. req., 1 juill. 1924), and the party who contracted without any reason at all (Cass. req., 6 juin 1932). Two proof rules complete the picture: to enter the contractual field the motive must have been expressed in the act, and where the act must be proved in writing, the contractual and determining character of the motive must be proved in writing too (Cass. com., 14 mars 2006; Cass. 1e civ., 23 févr. 2012, n° 11-11.230); the judges must positively ascertain that the motive was expressly stated in the act (Cass. com., 30 mai 2006).

Mistake on the value. The false estimation of the monetary value of the performance expected, without any mistake on its essential qualities, is not a cause of nullity (Article 1136 of the Civil Code). It constitutes a pure error on value, called lésion (loss from an inadequate price), which is taken into account only in the cases provided by statute. The courts have so classified the value given to goods by a buyer who argued their price was lower because of their worn condition (Cass. com., 20 mai 1980), the value accorded to a business in view of its expected yield, in the absence of any deceitful conduct by the seller (CA Aix, 1 juill. 1976), the value attributed to a tobacco outlet that suffered a sharp depreciation after a change in legislation (Cass. civ., 15 nov. 1954), the value based on the turnover and results of a business (Cass. com., 28 juin 1994), the estimated value of a building resting on a false appraisal of its profitability (Cass. 3e civ., 31 mars 2005), and the value given by a public purchaser to the performance under a procurement contract (CE, 9 nov. 2018, n° 420654). The party who simply made a bad bargain therefore has no claim in mistake; its ground, if any, lies in the mistaken appraisal of a substantial quality, or in deceit.

Mistake of law (erreur de droit)

The mistake of law is the false belief in the requirements of the law governing the contract to which the party invoking it consented. It is a cause of annulment recognised by Article 1132 of the Civil Code, on the same footing as the mistake of fact, and it annuls the contract in two configurations.

First, where the false belief in the content of the law bears on a rule capable of actually applying to the contract in question. There is accordingly no mistake of law where the party invoking it believed itself obliged to respect a right of its counterparty which the counterparty did not enjoy: a landlord offered the leased premises for sale to the tenant for the exercise of a pre-emption right the tenant did not have in the circumstances, and the trial judges were wrong to hold the sale valid by qualifying the landlord's mistake as inexcusable (Cass. 3e civ., 20 oct. 2010, n° 09-66.113). Nor is there a mistake of law where the party freed itself from the contract under which it owed payment by taking an autonomous undertaking to pay (Cass. com., 13 déc. 1994, n° 92-12.621).

Second, where the alleged victim was mistaken about the rule that commanded the validity of the contract. That is the case of the party who, mistaken about the extent of its hereditary rights, assigned its rights of succession at a very low price (Cass. civ., 19 nov. 1930), or who wrongly believed itself bound by a valid notice to quit (Cass. civ., 29 mai 1980).

The ground has its own outer limit: a party cannot claim to have been mistaken about the rule applicable to its case where it invokes, to justify its erroneous belief in the validity of clauses of its contract, the nullity of comparable clauses pronounced by a court decision rendered between other parties (Cass. 1e civ., 27 juin 2006, n° 05-13.337). Nor can the mistake of law be invoked to neutralise an effect that the law produces without requiring any consent.

Determining and excusable: the two conditions on which annulment turns

The mistake must have been determining. The party invoking any of the mistakes described above must establish that it would not have contracted, or would have contracted on other conditions, had it not made the mistake. That condition is appraised sovereignly by the trial judges (Cass. civ., 3 oct. 1979; Cass. civ., 26 févr. 1980, n° 78-15.631). The quality is determining where it was mentioned in the contract (CA Aix, 13 déc. 1977), which is the strongest practical argument for naming the decisive qualities in the act itself. Conversely, the mistake is not determining where the parties admitted a measure of uncertainty on the disputed quality: the party who bought accepting a stated risk cannot later complain that the risk materialised.

The mistake must be excusable. Whether the mistake is one of law or of fact, the contract vitiated by it is annulled only if the mistake is excusable (Article 1132 of the Civil Code). The case law recognises the excusable character in five situations: where the victim is beyond reproach, having been unable, despite its diligence, to realise its mistake (Cass. civ., 26 oct. 2005); where the mistake is the consequence of the fault of the counterparty who, without any intention to deceive, omitted to inform the victim of the unsuitability, which it knew, of the thing for its intended purpose (Cass. civ., 23 mai 1995), the judges being able to exonerate the counterparty only by finding with certainty that no such duty existed, which obliges them to check whether the counterparty's duty of disclosure was breached; where the counterparty intentionally provoked the mistake by its silence, the réticence dolosive (fraudulent concealment) always rendering the provoked mistake excusable; where the party was mistaken about the very object of the contract (Cass. 3e civ., 21 mai 2008, n° 07-10.772) or about its certain content; and where the mistake was common to both parties (Cass. com., 19 nov. 2003), which requires the trial judges not to content themselves with noting the good faith of the contracting party but to establish that the cause of the nullity was necessarily unknown to everyone (Cass. com., 3 févr. 2015, n° 13-26.078). By contrast, where the victim was perfectly informed, the ground fails (Cass. 3e civ., 17 sept. 2014, n° 13-18.931).

The inexcusable mistake bars annulment. Nullity is refused where the victim is a professional aware of the qualities of the thing (Cass. 3e civ., 4 juill. 2007, n° 06-15.881; CA Versailles, 28 oct. 2009, n° 08/04375), unless it intervened in the contract for purposes other than the exercise of its speciality (Cass. 1e civ., 14 déc. 2004); where the victim could not have been unaware of the reality of the facts (Cass. civ., 20 janv. 1981) or of the law, such as the ignorance by a spouse married under community of property of the faculty of renouncing the community (Cass. civ., 4 nov. 1975); or where the victim was negligent (Cass. com., 11 févr. 1992; Cass. com., 27 janv. 1998) or imprudent, notably to the point of disregarding the information given to it about the thing, such as the unbuildability of the land purchased, stated in a separate document and mentioned in the act (Cass. civ., 13 juill. 2017, n° 16-19.353). The one exception already noted: the erreur-obstacle (mistake preventing any meeting of the consents) annuls the act even where inexcusable (Cass. 3e civ., 16 déc. 2014, n° 14-14.168).

Would your mistake support annulment?

Proof, relative nullity and the five-year time limit

Proof. The victim must prove that the mistake satisfies the conditions set out above. Since facts are being proved, proof is free and may be made by any means. The victim may even use elements of appraisal of which it became aware after the conclusion of the contract (Cass. civ., 13 déc. 1983; T. com. Paris, 5 avr. 2024, n° 2021037638). The one written-proof constraint concerns the determining motive brought into the contractual field, as seen above.

The sanction. The established mistake can entail the annulment of the contract (Article 1131 of the Civil Code). The nullity of the contract can be replaced by that of the vitiated clause alone where the clause is accessory (Cass. 1e civ., 12 oct. 1955). The nullity is relative: only the victim can claim it (Article 1181, paragraph 1; Cass. 1e civ., 1 mars 1988, n° 86-17.492), and only the victim can confirm the contract (Article 1181, paragraph 2), as did the party which carried on a prolonged and sufficient exploitation before complaining of a defect in yield that was verifiable within the first weeks (CA Paris, 12 déc. 1984). The action prescribes within the ordinary five-year period, running from the day the mistake was discovered (Article 1144 of the Civil Code).

Two procedural notes. A court seised of a claim in nullity for deceit has recognised its power to rule of its own motion on the nullity for mistake not expressly invoked before it, because the notion of deceit contains that of mistake (CA Rouen, 21 mai 1991). And annulment does not exhaust the victim's remedies: the victim can also obtain damages (CA Aix, 12 juill. 1979), and may be entitled only to an indemnity where the mistake is not substantial but relates to a particular quality of the thing for which the seller's general terms provide compensation (CA Paris, 11 mars 1947).

Frequently Asked Questions

This article is for general information only and reflects French law as published at the date shown above. It does not constitute legal advice. Always seek qualified advice before acting.