In view of article 1110 Code civil:

Given that in dismissing the claim of the Commune of Venthon for the annulment of a contract whereby it hired word-processing equipment the decision under attack held that if, as alleged, the Commune had been misled by the promises made by a third party, subsequently convicted of fraud, its only recourse was against that person;

But given that in so deciding when a contract may be avoided for mistake caused by the fraud of a third party if it relates to the very substance of the contract, the court of appeal, by omitting to inquire whether the mistake of the Commune related to the very substance of the contract, failed to give any legal basis for its decision;

For these reasons QUASHES the decision of the Court of Appeal of Chambéry on 13 April 1994 and remands the matter to the Court of Appeal of Grenoble.

Subsequent Developments

Civ. 1, 03/07/1996, Bull. n° 288 : The doctrine laid down by this judgement has not subsequently been confirmed or contradicted by the Cour de Cassation. As for the lower courts, a judgement of the Court of Appeal of Metz dated 28 November 2002 states that a borrower, in order to have the contract declared void, may not rely on the fact that persons found guilty of fraud had apparently encouraged him by the offer of a remunerative job to purchase a vehicle on credit, on the grounds that such persons were third parties to the loan contract and that as a result their deceit could have no influence on the validity of the contract. Although this first statement seems to contradict the doctrine laid down by the judgement of 03 July 1996, the judgement of 28 November 2002 makes it clear nevertheless that even if the borrower’s error provoked by the deceit were admitted, such error concerned only the reasons which had led the borrower to enter into the contract, and not the substance of the contract, which, according to the Court of Appeal, is the only ground for nullity. Moreover, a judgement of the Court of Appeal of Paris dated 26 October 2001 states, exactly along the lines of the doctrine of the Cour de Cassation, the “mistake flowing from deceit by a third party to the agreement is a basis for nullity if it concerns the very substance of the agreement”.