Court of Cassation, Commercial, Financial and Economic Chamber, 14 May 2025, No. 23-17.948
In a ruling handed down on 14 May 2025 (No. 23-17.948), the Commercial, Financial and Economic Chamber of the Court of Cassation strictly defined the limits of the pre-contractual duty to provide information imposed by Article 1112-1 of the Civil Code. The pre-contractual duty to provide information is strictly limited to information that has ‘a direct and necessary link with the content of the contract or the quality of the parties’ and whose ‘importance is decisive for the consent of the other party’.
Facts and procedure
In this case, Mr T. had acquired from Mr M. all the shares in a company operating a fast food business. Shortly after this acquisition, Mr T. found that it was materially impossible to carry out his business in full in the commercial premises rented, mainly due to the prohibition on installing an effective smoke extraction system, which was essential for frying. This prohibition was due to specific rules in the co-ownership regulations and the opposition of the other co-owners.
Considering that these constraints constituted crucial information that must have been known to the transferor but had not been disclosed during the pre-contractual negotiations, Mr T. sued Mr M. for compensation on the basis of Article 1112-1 of the Civil Code, considering this omission to be a breach of the pre-contractual duty to disclose information.
However, the Reims Court of Appeal rejected Mr T’s claims, finding that he had not demonstrated that the possibility of frying food was a determining factor in his consent at the time of the purchase.
Solution of the Court of Cassation
The Court of Cassation firmly upheld the position of the appeal judges, recalling that the pre-contractual duty to provide information provided for in Article 1112-1 of the Civil Code is strictly limited to information that has ‘a direct and necessary link with the content of the contract or the quality of the parties’ and whose ‘importance is decisive for the consent of the other party’.
The Court emphasises in particular that ‘the arguments, taken in their first branch, which postulate that the duty to provide information covers any information that has a direct and necessary link with the content of the contract or the quality of the parties, are therefore unfounded’. In other words, it is not sufficient for the omitted information to be merely relevant or useful. This information must be absolutely decisive for consent.
Furthermore, the Court expressly upheld the assessment of the lower courts that it had not been proven beyond reasonable doubt that ‘the possibility of frying was a decisive factor in Mr T’s consent’.
It is for the party invoking a breach of this pre-contractual duty to inform to demonstrate the decisive nature of the omitted information.
This decision may seem surprising in its firmness. However, this case concerned the transfer of shares in a company. The decisive nature of the information would perhaps have been more easily recognised if we had been dealing with the transfer of a business or a lease. The company which had been purchased may choose other premises and the lease agreement is not necessarily vital for the company.
This ruling provides significant clarification of the pre-contractual duty to provide information.
It imposes a double burden of proof on those who invoke a breach of the pre-contractual duty to provide information:
– Proof of a direct and necessary link with the content of the contract,
– Proof of the decisive nature of the information during the pre-contractual negotiations.
This decision therefore moderates the (perhaps all too frequent) temptation of many parties to use pre-contractual information as a means of reneging on a contractual commitment that was signed too quickly or was not thoroughly examined by the buyer.
Contracts should therefore be drafted more precisely in order to avoid this type of dispute in the future.
By Olivier Vibert, lawyer at the Paris Bar,
KBESTAN, law firm in Evreux and Paris.
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