Facts
The dispute opposes [K.], an architect, and [S.], a farmer. In March 1990, [K.] learned that [S.] was going to relocate his farm and sell his property. [K.] offered 1'200'000 francs for the property and was interested in the architectural work related to the relocation project. The parties agreed that [K.] could buy the property, agricultural land, and forests. A sales contract was signed on June 11, 1990, for the agricultural land and forests, but the department of agriculture opposed the sale of the property.
The parties then concluded a preliminary contract for the property, but [K.] refused to sign it and demanded that [S.] take back the agricultural land and forests. [S.] refused and brought a lawsuit to obtain payment of the sale price. The court of first instance ruled in favor of [K.], but the court of appeal overturned this decision and granted forced execution for payment of the sale price.
Considerations
The Federal Court examined whether the sales contract was valid despite the error in the grounds invoked by K. Article 24 paragraph 1 number 4 of the Code of Obligations (CO) provides that an error in the grounds can lead to the invalidity of the contract if it is essential. Article 25 paragraph 1 CO specifies that invalidity can only be invoked if it is not contrary to the rules of good faith.
The Federal Court considered that the error in the grounds invoked by [K.] was essential, but that the invalidity of the contract could only be invoked if it was not contrary to the rules of good faith. The Court examined whether K.'s decision to refuse to sign the preliminary contract and to demand that [S.] take back the agricultural land and forests was contrary to the rules of good…