In a share sale, the price is often fixed in two stages: a provisional price on signing the share sale agreement (protocole d’accord), then a final price set by an expert from reference accounts. To challenge it, the sellers must in principle prove a gross error (erreur grossière) by the expert. On 28 May 2026, the Commercial Chamber of the Cour de cassation (the French supreme court for civil and commercial matters) quashed a decision that had ruled out any gross error: the expert had to respect the calculation agreed in the protocol and assess provisions and the tax rule at the date of the reference accounts.
The facts
By an agreement dated 24 July 2019, a company and an individual, the sellers, agreed to sell to a buying company the entire share capital of a company operating a care home for dependent elderly people (Ehpad), subject to a condition precedent: the buy-back, by the selling company, of the shareholding that the target company held in the selling company’s capital.
Annex 4.2 of the protocol calculated the provisional price on the target company’s accounts closed at 31 December 2018, taking that shareholding at €1,108,050. The recitals of the protocol recorded a buy-back price for those shares of €789,125 if the sale took place in February 2020 and, in any event, the amount of the loan still outstanding.
The sale was completed on 2 June 2020, the buyer substituting another company for itself. The expert instructed to fix the final price assessed the target company’s position at 30 May 2020 and made adjustments, three of which are at issue: the loss on the buy-back of the shares, the personal autonomy allowance (allocation personnalisée d’autonomie, a public care allowance), and VAT on mixed expenses. Alleging gross errors, the sellers sought annulment of the report, a sale price fixed at €4,541,497 and the appointment of an expert. On 28 January 2025, the Rennes Court of Appeal held the three adjustments justified and dismissed these claims.
The decision
The Cour de cassation quashed the decision in its entirety and sent the case back to the Angers Court of Appeal (Cass. com., 28 May 2026, appeal no. 25-13.217, unreported).
The agreed calculation. Under article 1103 of the French Civil Code, according to which “contracts lawfully formed have the force of law for those who made them” (translated from the French), the Court criticised the Court of Appeal for ruling out gross error for want of an unequivocal advance acceptance of the loss by the buyer, when it had found that the parties had fixed the provisional price by taking the shareholding at €1,108,050, “while recording, in the recitals of that protocol, as the buy-back price of the shares the sum of 789,125 euros”: it “failed to draw the legal consequences of its findings”. The appeal also relied on article 4.1 of the protocol, which provided for a single method for the provisional and the final price; the Court’s answer does not refer to it.
The provision. Under articles L. 314-2, R. 314-77, R. 314-107 and R. 314-158 of the French Social Action and Families Code, the Court recalled that the département (the county-level local authority) grants the establishment, under the personal autonomy allowance, “an annual global flat-rate allowance relating to dependency, paid in twelve equal flat-rate instalments”. Yet the Court of Appeal had found that the care home sent its budget monitoring report to the département at year end, and that the expert had assessed the probability of a claim for recovery of overpayments at 30 May 2020; it followed “that there was, on that date, no obligation of repayment on the care home for the allowances being received and that there was, consequently, no reason to book them as a provision”.
The tax rule. Under article 12 of the French Code of Civil Procedure, the Court held that the Court of Appeal could not merely note that the sellers produced no contrary accounting analysis: it had to examine whether the expert had made a gross error by applying the rule laid down by the Conseil d’État (France’s highest administrative court) on 7 October 2020 on the partial deductibility of VAT on mixed expenses, “whereas it was appropriate to take 30 May 2020 as the reference point, a date on which the rule was that of full deductibility of the VAT relating to those expenses”.
The Court does not say that the report is vitiated by gross error: the Angers Court of Appeal will decide. The decision is unreported, and each ground of cassation rests on its own legal basis.
What this changes for valuation
The protocol sets the method. The third party under article 1592 of the French Civil Code derives the assignment from the contract; on this point, the Court ruled under article 1103 alone, without citing article 1592 relied on by the appeal. It criticised the Court of Appeal for failing to draw the consequences of its findings on the protocol’s two figures, but does not itself characterise the adjustment as a gross error and lays down no general rule on items already treated in the provisional price. As a precaution, the expert compares each item with its treatment in the provisional price and ties any difference to a clause of the protocol.
The reference date freezes obligations. In this case, a provision could appear in the position at 30 May 2020 only for a repayment obligation existing on that date; the probability of a future claim, when the accounts with the funder are settled only at the end of the year, was not enough. The report therefore ties each provision to an obligation that has already arisen, with supporting documents.
The rule of law is that of the reference date. The Court states that the position had to be taken at 30 May 2020, rather than applying a solution laid down just over four months later. For each adjustment, the report identifies the rule in force at that date, with its source; a later change may be noted, not applied.
Related questions. On the court fixing the price, the decision does not rule; the Commercial Chamber held on 4 June 2025 that the court cannot itself fix the price of a sale. The expert under article 1843-4 may value each reading of a disputed clause (decision of 7 May 2025); the decision under review says nothing similar for the article 1592 third party. Knowingly distorted reference accounts are a matter of fraud instead (decision of 8 July 2026).
What the valuer takes from it
- The third party fixing the final price applies the method agreed in the protocol, starting from the annex that calculates the provisional price.
- When the provisional price knowingly treats an item, the expert who adjusts it at the final price stage ties that adjustment to a clause: it is on this item that the Court overturned the Court of Appeal, without itself characterising a gross error.
- A provision enters the reference position only for an obligation existing on that date, supported by a document.
- The tax rule applied (here, VAT deductibility) is the one in force at the reference date, cited with its source.
Further reading
The Business and company shares page describes the assignment, its timescale and its fee. The guide Selling my business in France: what is it really worth? and the glossary entries tiers évaluateur and date de valeur complement this article. On the reference accounts: Share sale: EBITDA distorted by advance invoicing is seller fraud. On the same theme: Pharmacy sale price: the court cannot fix it and Article 1843-4 Civil Code: the expert may give two valuations. The decision is available on Légifrance.
What next
A final share price fixed by an expert, and disputed adjustments?
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