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Shorter Articles And Notes

The Effect Of The Fourniture Et Garantie Clause In An Hereditary Contract

John D. Kelleher

In a standard hereditary contract relating to immovable property there are many standard clauses. The exact meaning of some of these clauses is not always immediately clear; similarly their effect. One such clause is that which purports to provide a reciprocal guarantee on behalf of the parties to the contract.

The fourniture et garantie clause, with slight variations depending on the nature of the contract, is with the exception of gifts, never absent from an hereditary contract relating to immovable property. Its more or less standard form is as follows:

"Partant s’obligèrent lesdites parties pour elles et leurs hoirs respectifs à la fourniture et garantie réciproque du contenu des prémisses selon droit."

The inclusion of a fourniture et garantie clause in an hereditary contract is in fact a matter of choice for the parties, but it is invariably included. But what does it mean? And what is its effect?

The fourniture et garantie clause is an engagement by the parties to the contract, which binds them and their respective heirs, to indemnify the other; the vendor in the event that the title to the property described in the contract is somehow defective; the purchaser in case of breach of his obligations thereunder. The word "fourniture" applied to the guarantee exercisable on the movables and the rentes of the guarantor. Since 1880 there can no longer be a guarantee on a movable so the word is now redundant in that regard. Rentes are, of course, increasingly irrelevant in modern conveyancing. The word "fourniture" survives, no doubt, as a matter of conveyancing practice.

The fourniture et garantie clause was a standard feature in pre-1880 hereditary contracts relating to immovable property, but its effect was the subject of major criticism. Of the system of garantie, the Commissioners of 1861 stated:

"It is difficult to conceive a system more vicious in principle, or more calculated to create confusion". [1]

According to R. P. Marett, the draftsman of the reforming Loi(1880) sur la propriété foncière which did so much to reform the evils of the system, garanties were the "principales causes des complications qui règnent dans notre système de propriété foncière". [2]

The reforms effected by virtue of the Loi (1880) ensured that a guarantee arising post 6th September, 1880 did not automatically confer an hypothec over the guarantor’s immovable property. Instead, an action en garantie is required and the right to so action is prescribed after thirty years (Article 44). The final paragraph of Article 45 stressed the importance of the fourniture et garantie clause:

"Lorsque l’aliénation aura été faite avec une stipulation expresse que c’est sans fourniture ni garantie de la part de l’aliénateur, l’acquéreur n’aura point de recours en garantie vers lui; mais il jouira des autres droits et privilèges mentionnés dans le présent Article, selon le cas. Le donataire et le légataire seront assimilés à l’acquéreur sans fourniture ni garantie."

With what Marett called their "effets pernicieux" removed to a great extent by the Loi (1880), guarantees continued and continue to form a standard clause in contracts relating to immovable property. But their effect was changed by the reaction to judgment in one of the more celebrated cases in Jersey property law.

The issue of what is guaranteed or warranted in an hereditary contract of immovables was discussed in Kwanza Hotels Ltd v Sogeo Company Ltd. [3] The case involved the purchase of a property which included a chalet described by an estate agent as "owner’s accommodation". In fact the chalet had been erected without planning consent and could not be used for human habitation. The purchaser actioned the vendor, alleging inter alia that it was an implied term of the contract between them that the chalet was fit for use as human habitation.

At both instances in Kwanza, Poingdestre’s Les Lois et Coutumes de L’Ile de Jersey [4]was quoted with approval:

"Tout homme qui a vendu, baillé, assigné, cedé, eschangé, engagé, hypothequé, ou allotty en partage & diuision de chose commune; est tenu à garantir la chose vendue, bailleé, assignée, cedée, eschangée, engagée, hypothequée ou allottie pour ledit Partage ou division; non seullement quant a la proprieté & possession, mais aussy quant aux charges, empeschements & servitudes qui la diminuent de valleur, & la rendent moins estimable."

Thus every vendor (and not only a vendor who gives a guarantee) has responsibility for the character or quality of what he sells, be it immovable or movable, and this relates not only to ownership and possession, but also to charges, empeschements (unfortunately not defined by Poingdestre) and servitudes. However as the Court of Appeal noted at page 114, Poingdestre is unfortunately silent as to how the liability of the vendor is affected by the knowledge or ignorance of the purchaser.

Poingdestre goes on to say that the parties can negate or extend the ambit of this basic position of guarantee:

"En tous Contracts les parties contractantes peuvent de consentement mutuel, s’obliger l’un l’autre a des garanties extraordinaires...et aussy peuvent ils se descharger l’un l’autre des garanties ordinaires."

Ereaut, Deputy Bailiff, at first instance concluded that the standard "Le tout tel qu’il est..." clause serves to negate the implied warranty in an hereditary contract, save as to title. The then standard clause ran as follows:

"Le tout tel qu’il est avec tout et autant de droits, appartenances et dépendances comme en peuvent appartenir situé en la paroisse de, etc".

His reason for this conclusion was that the words: "Le tout tel qu’il est":

"must be deemed to have some meaning and I consider that they are similar to the expressions referred to in Domat, and mean that the purchaser takes the property as he finds it" (page 77).

The extract from Domat states that:

"Si un héritage est vendu comme il se comporte, ou ainsi que le vendeur en a bien et duement joui, ou avec ses droits et conditions; ces expressions et autres semblables, n’empêchent pas que le vendeur ne demeure garand des servitudes cachées et des charges inconnues: comme seroit une rente foncière à laquelle l’héritage feroit asseris." [5]

Ereaut, Deputy Bailiff, interpreted this passage to draw:

"a distinction between "vices cachés" which affect title and those which do not. The implied warranty as to title remains, but in other respects is negated".

Domat appears to say that if a property is sold such as it is or with words to similar effect, this does not negate the vendor’s responsibility for hidden servitudes and unknown charges; in other words, for defects that go to title.

Ereaut, Deputy Bailiff ’s finding gains some support from the fact that good conveyancing practice requires that, where in an hereditary contract there is to be no guarantee, the contract must expressly say so: "le tout sans fourniture ni garantie", as in the case of a donor making a gift. The view is clearly taken that the exclusion of the fourniture et garantie clause is not enough: the exclusion must be express.

The effect of the Kwanza judgments was a new standard clause, reputedly drafted by counsel who appeared in that case:

"Le tout tel qu’il est avec tout et autant de droits, appartenances et dépendances comme en peuvent appartenir et dans l’état ou il se trouve avec tous ses vices apparents ou cachés, s’ils existent..."

Post Kwanza hereditary contracts contain both a fourniture et garantie clause and this new clause, commonly known as a vice caché clause. However the combined effect of these two clauses was surely not planned. From the point of view of the vendor’s obligations under the contract the latter appears to run contrary to the former. This interpretation turns on what is covered by the term vice caché.

In the Court of Appeal, after running through the same authorities as cited at first instance, the Court said at page 119:

"This is not an entirely consistent line of authority, but in our judgment the relevant principles do emerge reasonably clearly. The doctrine [of vice caché] applies not only to physical faults, but also to legal limitations of the enjoyment by the purchaser of the thing sold. This was clearly the view of Poingdestre. A fault is not ‘hidden’ if the purchaser could have discovered it either by examining the thing sold himself or (as Pothier expressly said) by getting it examined by somebody qualified. The critical question is whether the fault would have been revealed by an examination, more than superficial but less than minute, such as a reasonably careful purchaser could have made either himself or through someone appointed for the purpose."

On the face of it therefore, title is covered by the term vice caché. Contemporary conveyances are stated to exclude liability for vices apparents ou cachés. Quite how such a clause sits with the garantie clause is unclear. However the potential effect is that no guarantee to title is provided by a vendor. Of course, the point is potentially irrelevant given that a purchaser’s lawyer researches title prior to contract and the lawyer will be actionable for missing a defect in the same. However it could be relevant if, say, for some reason the lawyer was not actionable, and recourse against a vendor was contemplated. It is something which should be clarified. Furthermore, it is submitted that this unclear position provides an example of standard conveyancing documentation which is somewhat anachronistic and which contains clauses the meaning of which is shrouded in mystery.

John D. Kelleher is an advocate of the Royal Court of Jersey and a partner in Olsen, Backhurst & Dorey, Eaton House, Seaton Place, St. Helier, Jersey JE2 3QL