French Civil Code Article 1592

Article 1592 of the French Civil Code provides that the sale price of goods or securities may be validly determined by a third party appointed by the parties. This provision is commonly used in M&A for the determination of share transfer prices — the third-party expert (tiers arbitrateur) renders a decision that is binding on the parties, subject only to challenge for manifest error. It is frequently used in shareholder disputes, forced exits of minority shareholders and buy/sell clauses in shareholders' agreements. The expert acts as a mandataire (agent) of the parties, not as an arbitrator, and is not subject to Code of Civil Procedure procedural rules.

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Example: a shareholders' agreement provides that in case of a shareholder dispute over exit price, the price shall be determined by an expert designated under Article 1592. When a minority shareholder exercises their put option and the parties cannot agree on price, they jointly appoint Hectelion as the Article 1592 expert. The decision — rendered within 3 months — is binding on both parties and may only be challenged for manifest error, providing finality and avoiding lengthy litigation.

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Hectelion is regularly appointed as expert under Article 1592 of the French Civil Code for binding share price determinations in shareholder disputes and contractual exits.