Given that it was in order to obtain certain tax advantages that M. Alain Lucas acquired from the firm SAGEP part of a condominium in process of restoration, the transfer document being drawn up in the notarial office of M. Geoffroy d’Assy; that in 1992, after being subject to insolvency proceedings, M. Lucas found that the intended tax advantages were not achievable, and sued SAGEP (now represented by its liquidator M. Villa, the syndic of the co-owners of le Cloître Saint-Martin, and M. Geoffroy d’Assy), to have the purchase avoided for error or terminated with damages; that these claims were rejected by the judgment under attack, upholding the decision at first instance;

Given that M. Lucas complains of the judgment against him on the grounds:

1. that in the light of its findings that his principal purpose in entering the agreement was, as SAGEP well knew, to obtain the envisaged tax advantages, the court’s refusal to avoid the sale on the ground that this purpose was not achieved constituted a failure to draw the proper conclusions from its findings and so violated article 1110 Code civil;

2. that in failing, though requested to do so, to inquire whether SAGEP, which as a professional in the real property market and specialist in its tax aspects must have been familiar with the requirements of the Law Malraux, had not failed in its duty to advise him during the negotiations, the court of appeal’s judgment lacked legal basis under article 1116 Code civil;

But given that a mistake as to purpose collateral to the object of the contract, however crucial, is not a ground of nullity, it was quite correct for the court below to state that in the absence of a term of the contract explicitly making it a condition of the contract and thus bringing it within the contractual field, the failure of the contractor’s purpose in entering the contract – here the envisaged tax advantages -- even if known to the other party, was not sufficient to ground a claim for nullity, and that furthermore in 1983 SAGEP could well have supposed that the plan would be effective under the terms of the Law Malraux, and was not shown to have been conscious at the time of the sale that such tax advantages might not be available under that law accordingly, the court of appeal, on these grounds alone, justified its decision under article 1116 Code civil; and the application for review is baseless;

For these reasons DISMISSES the application for review.

Subsequent Developments

Civ.1, 13/02/2001, B. n° 31 : The doctrine laid down by this judgement – sometimes criticised by legal writers – has nevertheless been affirmed more recently by the Third Civil Chamber of the Cour de Cassation, in a judgement dated 24 April 2003 (Bull. No. 82) which states that “mistake relating to an element of a contract which is outside the object thereof, in particular relating to the tax treatment of the acquired asset, is not, in the absence of an express provision, a cause of nullity of the contract, even if such element may have been decisive”