In a sale of company shares, the price is rarely a single figure fixed on the day of signing. It is often defined by a formula, adjusted after the closing of a balance sheet, and sometimes entrusted to an expert instructed to fix the final price. When the result disappoints, two grounds of challenge open up: the expert’s report itself, and the reliability of the accounts on which the price was based. Two decisions of the Commercial Chamber of the Cour de cassation (French supreme court for civil and commercial matters), handed down in spring and summer 2026, illustrate each of these grounds.
Three French terms first. The protocole de cession is the share sale agreement that sets out the price and its adjustment mechanism. The EBE (excédent brut d’exploitation) is an EBITDA-like operating surplus, often used as the basis of a price formula. The garantie d’actif et de passif is the seller’s warranty on the assets and liabilities of the company sold, usually capped at an agreed amount.
The facts
The price expert and the protocol. By a protocol dated 24 July 2019, a company and its manager agreed to sell to a group of retirement homes the entire share capital of a company operating a care home, subject to a condition precedent of the buy-back of a shareholding. The sale was completed on 2 June 2020. The protocol provided for a provisional price, then a final price fixed by an expert, with adjustments. Disputing several adjustments made by the expert, the sellers sued the buyer for annulment of the report on the ground of gross error. The RENNES Court of Appeal, on 28 January 2025, dismissed their claim.
The EBE and early invoicing. On 2 May 2011 a couple sold to a holding company, set up by an employee of the business, all the shares of a locksmith company, “for the price of 300,000 euros, fixed taking into account a gross operating surplus (EBE) for the 2010 financial year, set at the sum of 105,000 euros” (translated from the French). A garantie d’actif et de passif of €150,000 was signed the same day, guaranteed by a bank up to €75,000. Three months later, on 2 August 2011, the holding company was placed in receivership, then in liquidation in 2013. Relying on the inaccuracy of the reference accounts, the liquidator claimed damages from the sellers. The COLMAR Court of Appeal, on 14 February 2024, ordered them to pay €300,000.
The decision
In the first case the Cour de cassation quashed the decision of the RENNES Court of Appeal in its entirety (Cass. com., 28 May 2026, appeal no. 25-13.217) and sent the case back to the ANGERS Court of Appeal. Three points were censured.
The first, under article 1103 of the French Civil Code: “contracts lawfully formed have the force of law for those who made them” (translated from the French). The Court of Appeal had found that article 4.1 of the protocol provided for “a single method of determining the price”, for the provisional price as for the final price, and that the parties had fixed the provisional price by taking the shareholding in a subsidiary at €1,108,050 while recording a buy-back price for those shares of €789,125. By upholding an adjustment by the expert for a loss on that buy-back, it failed to draw the legal consequences of its own findings.
The second concerns a provision: the expert had provided for sums received under the personal autonomy allowance; yet under articles L. 314-2 and R. 314-77 of the French Social Action and Families Code, the global dependency allowance is paid by the département in twelve instalments, and “there was, on that date, no obligation of repayment on the care home”.
The third concerns VAT on mixed expenses: under article 12 of the French Code of Civil Procedure, the Court of Appeal had to examine whether the expert had applied a rule postdating the reference date of the accounts.
In the second case the Court dismissed the sellers’ appeal (Cass. com., 8 July 2026, appeal no. 24-14.768). The Court of Appeal had found “that the sellers knowingly presented to the prospective buyer accounting figures and in particular an EBE calculated inappropriately, not reflecting the true results of the company” (translated from the French), from which it followed “that it was for the sellers to draw the prospective buyer’s attention to the existence of this practice and to take it into account in calculating the EBE”. Having “brought out that the buying company was unaware of the existence of early invoicing without provision, distorting the accounts and the EBE”, it gave a legal basis to its decision on fraudulent concealment (réticence dolosive).
Both decisions are unreported.
What the expert takes from it
The third-party valuer applies the formula; he does not rewrite it. The expert instructed to fix the final price within the meaning of article 1592 of the French Civil Code derives his power from the contract. His report can only be annulled for gross error, but the decision of 28 May 2026 shows that departing from the single method provided in the protocol, providing for a debt that does not yet exist, or applying a tax rule postdating the date of the accounts exposes the report to censure. Before adjusting, the expert rereads the price clause and dates each item of liability. The difference from the expert under article 1843-4, on whom this site commented a 2025 decision, lies in the source of the assignment: the contract in one case, the law in the other.
The reference EBE is restated before it serves as the basis for the price. A price of €300,000 based on an EBE of €105,000 corresponds to a multiple close to three. If early invoicing inflates the year’s turnover without a provision, the true EBE is lower and so is the price. The valuation of a business or of a fonds de commerce (the business as a going concern: goodwill, lease rights, fixtures, clientele) begins with normalising the accounts: deferred income, manager’s remuneration, off-market rents, exceptional charges. The Charte de l’expertise en évaluation immobilière (French property valuation charter) lists the valuation of businesses, companies and company shares among the specialities of certain property valuation experts (6th edition, November 2025, Title II, § 8.5) and describes the methods based on operating accounts (Title III, § 2.4).
Silence about an accounting practice can cost the whole price. In the Colmar case, the sellers were ordered to pay damages equal to the price, regardless of the cap on the warranty. The warranty covers the gaps between the representations and reality; fraud sanctions what was left unsaid. For buyer and seller alike, a valuation report that documents the restatements and the assumptions on results, before signing, reduces the risk of this kind of dispute.
Further reading
The Business and company shares page describes the valuation of shares and businesses, its timescale and its fee. On the same theme: Article 1843-4 Civil Code: the expert may give two valuations and Valuing SCI shares in France: methods and a worked example. The decisions are available on Légifrance: 28 May 2026 and 8 July 2026.
What next
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