Annulment of a share purchase contract due to fraud

Facts

Ms. Pozzi was the sole shareholder and chairwoman of the board of directors of SPO AG. On July 14, 1977, she sold 490 of her shares to Mr. Hegner for 100,000 CHF. Hegner paid a deposit of 20,000 CHF and committed to provide an additional 50,000 CHF for the increase in share capital. On July 11, 1978, Hegner informed Ms. Pozzi that he considered the participation contract null and void due to an error and intentional deception, and requested the reimbursement of his 70,000 CHF performance. The District Court of Zurich and the Cantonal Court of Zurich rejected Hegner's claim. Hegner then appealed to the FSCA.

Considerations

The FSCA upheld the appeal and annulled the judgment of the Cantonal Court. It remanded the case to the previous jurisdiction for further investigation and a new decision.

According to established case law, the buyer can, in the event of improper performance, either bring a warranty claim under Art. 197 et seq. CO, claim damages for non-performance under Art. 97 et seq. CO, or even rescind the contract for defect of consent under Art. 23 et seq. CO. If he opts for rescission, he can no longer go back on his decision to consider the contract null and void. The judge then does not have to examine the other aspects of the…