Does the hidden defects exclusion clause always protect the seller?
The hidden defects exclusion clause, lawful under Article 1643 of the French Civil Code, protects only a private seller acting in good faith. It is set aside if the seller knew of the defect or is a real estate or building professional, who is presumed to know the defects of the property sold.
A lawful clause found in almost every deed
Article 1643 of the French Civil Code holds the seller liable for hidden defects even if the seller did not know of them, unless, in that case, the seller has stipulated that no warranty will be owed. This reservation is the basis of the exclusion clause, found in almost all property sales between private individuals drawn up by a notary.
When it applies, the buyer can no longer sue on the basis of Articles 1641 et seq. of the French Civil Code for the defect concerned. The buyer will, where possible, have to rely on another ground (fraud, liability of the surveyor) or give up the claim.
The three scenarios: good faith, bad faith, professional seller
The effectiveness of the clause depends entirely on the profile and knowledge of the seller. The solutions usually adopted by the courts can be summarised as follows.
Where the seller is a private individual in good faith who was unaware of the defect, the clause is effective: the hidden defects warranty is excluded. Where a private seller knew of the defect and bad faith is proven, the clause is set aside and full damages are owed (Article 1645 of the French Civil Code). Where the seller is a real estate or building professional dealing with a lay buyer, the clause is ineffective: the professional is presumed to know the defects (settled case law). Finally, a seller who personally carried out the works that caused the defect often sees the clause set aside, as such a seller may be treated as a professional depending on the circumstances.
| Seller's profile | Effect of the clause |
|---|---|
| Private seller in good faith, unaware of the defect | The clause works: the hidden-defects guarantee is excluded |
| Private seller who knew of the defect (bad faith proved) | The clause is set aside; full damages are due (Article 1645 of the Civil Code) |
| Property or construction professional facing a lay buyer | The clause fails: the professional is presumed to know of the defects (settled case law) |
| Seller who carried out the works that caused the defect | The clause is often set aside, the seller being treated as a professional depending on the circumstances |
Effect of an exclusion clause according to the seller's profile
How the seller's bad faith is proven
Bad faith is not presumed for a private seller: it is for the buyer to demonstrate it, through a body of converging evidence. Frequently accepted items include: repair invoices relating to the disputed problem, claims declared to the insurer, recent concealment works (fresh paint over damp marks, boxing hiding cracks), statements from neighbours or former occupants, or an expert's report precisely dating the appearance of the problem.
Where the concealment is intentional, the buyer can also invoke fraud (dol, Article 1137 of the French Civil Code), which opens the way to annulment of the sale and by its nature escapes any exclusion clause.
The special case of dealings with a consumer
Where the seller is a professional and the buyer a consumer, a clause that removes or reduces the consumer's right to compensation for harm caused by the professional's breach of its obligations is irrebuttably presumed unfair (Article R. 212-1, 6°, of the French Consumer Code). It is deemed unwritten.
Finally, Article L. 271-4, II, of the French Construction and Housing Code deprives the seller of the benefit of the exclusion where one of the surveys it lists (lead, asbestos, termites, gas, electricity, non-mains drainage) is missing or expired on the day of the notarial deed, for the corresponding risk.
Frequently asked questions
Where is the exclusion clause found in a sale?
It usually appears in the preliminary contract (compromis or promesse) and then in the notarial deed, in the chapter on the conditions of the sale. It can be negotiated like any clause: a buyer may ask for its removal or limitation before signing.
How do you prove that the seller knew of the defect?
Through a body of converging evidence: invoices for works on the problem in question, claims declared to the insurer, recent concealment, witness statements, an expert's report dating the appearance of the problem. Proof of that knowledge sets the clause aside and opens the right to full damages (Article 1645 of the French Civil Code).
Does the clause cover a defect targeted by a missing survey?
No for the surveys listed in Article L. 271-4, II, of the French Construction and Housing Code (lead, asbestos, termites, gas, electricity, non-mains drainage): without a valid document at the signing of the notarial deed, the seller cannot contract out of the corresponding hidden defects warranty.
Can a seller contract out of their own fraud?
No. The intentional concealment of decisive information constitutes fraud (Article 1137 of the French Civil Code), and no clause can cover its author's bad faith. The deceived buyer keeps the right to seek annulment and damages.
Read next
- Code civil, article 1643 (Légifrance)
- Code civil, article 1645 (Légifrance)
- Code civil, article 1137 (Légifrance)
- Code de la consommation, article R212-1 (Légifrance)
- Code de la construction et de l'habitation, article L271-4 (Légifrance)
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