In a decision dated 16 October 2024, the French Supreme Court (Cour de cassation) ruled on the scope of the warranty for hidden defects in a chain of contracts (Articles 1641 and 1642 of the French Civil Code).
Under the terms of these articles, “[t]he seller is bound by the warranty for latent defects in the thing sold which render it unfit for the use for which it was intended, or which so diminish that use that the buyer would not have acquired it, or would only have given a lower price for it, if he had known of them“; but “[t]he seller is not bound by apparent defects of which the buyer has been able to convince himself“.
In this case, following the conclusion of a contract for the sale of a leased vehicle with an option to purchase, the sub-purchaser discovered that the vehicle was defective. An expert report attributed the design defect to an original part. On completion of the expertise, and therefore after the defect had been discovered, the sub-purchaser exercised the purchase option, and then brought an action against the original seller and the manufacturer for latent defects.
The court of appeal dismissed his claim, on the grounds that while “the action in warranty of latent defects is an accessory of the property sold and is transmitted to successive purchasers, for this transmission to take place or to have been initiated before the option was exercised by the last purchaser“.
The French Supreme Court (Cour de cassation) overturned the appellant’s decision on the grounds that “the sub-purchaser’s knowledge of the defect at the time of his own acquisition is irrelevant for the purposes of assessing the merits of his action against the original seller“. According to the French Supreme Court (Cour de cassation), the original purchaser, unaware of the defect, had transferred the action in warranty for latent defects to the sub-purchaser as an accessory to the sale.
This is a remarkable ruling, as it clarifies for the first time the system of warranty for latent defects in a chain of contracts: the sub-purchaser can bring this action against the original seller, regardless of his own knowledge of the defect on the day of sale (C. Hélaine, “Le sous-acquéreur et la connaissance du vice de la chose”, Dalloz Actualité, 22 October 2024).
