pubdocs.capubdocs.ca/.../793-forray_advancedcivillawobligations_wi… · web viewthe judge rules...

1Nicole Spadotto

Droit Civil Avancé Summary

Table of Contents(I) What Civil Law Means......................................................................................2(II) Sources and Forms of Civil Law..................................................................7

a. The Law and the Code..................................................................................................7i. Structures and values of the Code.......................................................................................7ii. The harmony to which the preamble refers: the Charter and Civil law........11

b. Judgements and Jurisprudence.............................................................................17c. Doctrine and Jurists....................................................................................................23

(III) Sources of Obligations..................................................................................27a. The Contract – Special Study..................................................................................30

i. Contractual Obligations and Duties: the duty of good faith................................30

b. Civil Responsibility......................................................................................................35i. The hypothesis of the age of responsibility...................................................................35

c. Other Sources of Obligations.................................................................................40i. General prestation.......................................................................................................................40ii. Management of the business of another........................................................................41iii. Reception of a thing not due (réception indue).........................................................44iv. Unjust enrichment.......................................................................................................................48

(IV) Regime of Obligations...................................................................................53a. The modalities of obligations.................................................................................53

i. Simple modalities: the term and the condition..........................................................53ii. Complex modalities: indivisibility and solidarity.......................................................67

b. The effects of obligations.........................................................................................77i. La demeure and forced execution.......................................................................................78ii. Damages (execution by equivalence)................................................................................89iii. The conservation of the debtor’s patrimony.................................................................97iv. Oblique action..............................................................................................................................101V. Action of inopposabilité (Paulian action).....................................................................103

c. Transfer and mutations of an obligation........................................................107i. Assignment of debt/claim......................................................................................................108ii. Novation and delegation........................................................................................................114

d. Extinction of an obligation....................................................................................121i. Payment and subrogation......................................................................................................121

2Nicole SpadottoThis summary owes thanks to Jen, with whom I split the readings. Also, thanks to Alexandre and Jenna, with whom I studied (this summary benefitted from it!). And finally, thanks to Farnell for some of his insights. All mistakes are my own.Identification of Civil LawTwo Course Objectives

1) Technical objectivea. The obligations of civil law – to finish the course with an amplified mastery of

the Civil Code.b. Technique is the moment when positive law manifests – but under positive

rights, there’s a whole mechanism of support2) Cultural objective

a. To become familiarized with/exposed to the civilist culture, epistemology, the particular way of knowing which constitutes civil law. To harmonize technical, historical, and practical elements.

b. Civil law is scientific in the sense that it’s an autonomous domain of knowledge, and it’s scientific because of its history and culture (we’re going to discover this, as history is a reservoir of arguments for a jurist)

Hierarchy of Sources1) Formal law: the Code and other legislative acts2) The court of law and jurisprudence3) Doctrine – which is linked to the strength of the authorities behind the doctrine

Obligation- The person and the obligation is the stabilizing domains of the civil law, even more

so than property- There’s an intimate relationship between obligation and the civil law tradition, and

between obligations and personal rights - The institutions of obligations interact with liberty and governmentality (because it

sets out the ways in which humans are obligated in a social world)o Relationship of constraint: obligation is the power of constraint, as it’s a

discourse which commands our relationship to liberty (thus, discourse on obligations is substantially liberal)

o If the discourse of obligations is a discourse of constraint in society, it’s also a discourse of liberty

- In law, payment is the regaining of freedom (as your obligation has been fulfilled)

(I) What Civil Law MeansGeneral Elements of Signification

- “Civil Law” is a translation of the Latin “jus civile” – which meant that the law was applicable to the citizens of the Roman state as individuals in their dealings with one another

- In its French form, the same body of law and its derivatives were called “les lois civiles” (later, “droit civil”) which was received throughout medieval France in varying degrees

- “Civil Law” was then used in opposition to other historical sources (ie, Germanic custom, canon law, royal decrees, commercial practices, and local usages)

- It retained the connotation of Roman law, or the derivative of it, until the French Civil Code was implemented in 1804, upon which Civil Law was known as the realm of private relations governed by legislation which drew on Romanist learning, and the other sources as well

o Similar usage was observed in Quebec until Civil Law’s codification of 1866

3Nicole Spadotto

- “Civil Law” thus designates that portion of the legal systems of France or Quebec that is generally synonymous with the idea of legal rules governing relations among persons

o It’s a private law applicable to individuals among themselves rather than in their relations to the state

o Can include commercial law, though some parts of this law derive from other historic traditions

o Thus, the idea that Civil Law and private law are perfectly synonymous terms and that either of them designates juridical relations existing only between private citizens is nowadays only an approximation of a more complex state of affairs

- Despite these qualifications, the term “Civil Law” is still well-established as a designation of the realm of private rights and the legal proceedings in connection with them (governed by the CCP)

o Civil rights, civil capacity, civil liability, and obligation are terms arising under this Civil Law rather than public law (which the CCQ doesn’t address)

How Civil Law gets its significance1) Jus civile – law is applicable to the citizens of the Roman state as individuals in their

dealings with each othero “Jus” is often translated as law, but actually refers to justice/rights o “Civile” which refers to “us” – civilization, civility, citizenship o “Corpus juris civilis digeste” – law pulls its name from justice, it’s a

preoccupation with justice 2) Lois civile

o Direct relationship between Roman and civil law is found in the texts of civil law, which in reality are Roman law (most important text: Corpus Juris Civilis: Body of Civil Law – Emperor Justinian 6th C.)

o Corpus juris civilis digeste is a body of civil jurisdiction, a pandect of the complete body of a country’s laws

o Civil Law is inspired by Roman law (as it synthesized it), but at the same time it is no longer Roman law (so it’s a break from Roman law at the same time)

3) Juridical forceo The Civil Law is said to be a written write, with the mere writing constituting

legal force – the opinion of jurists passes into the text as it’s codified (this translation as a “science”)

o Not like this in Common Law – Common law isn’t written because of “ratio scripta” (written reason)

a. We look only for cases which constitute applicable precedent (so it’s not a written right, despite many pages of judgment)

4) Private law – relations between people in a private setting o The realm of private relations governed by the legislation that drew upon

Romanist learning and other sources o Civil Law equals private law (relation between private persons) – military and

criminal law are exceptions (even though they govern law between persons, they are not private)

5) Civil Code of Quebec o Codification makes it possible to reduce the Civil law to a Code (but there are

other elements outside the Code also, like commercial and credit law which are outside the scope of the Code)

What does Quebec Civil Law Mean? ** Identifying meaning through history and words – the elements of signification identified are in fact systems of signification.

4Nicole Spadotto

- Tracing the meaning of the expression “Civil Law” is not an exercise in terminology – it’s a juridical exercise. The law is a system of genealogical signification, constructed through age and historical depth

- Codification has an actual and practical function as a reference which allows for a system of interpretation

- General Clauses: if we want to know what the civil law means, we need to look for references which are systems of interpretation in contemporary civil law (for example, the general clause of good faith in CCQ 6-7)

o Good faith is a “general clause” in the Code that is fluid, subjective, indeterminate, vague, and can apply broadly – it’s indeterminate in its concept and in its application

a. We don’t know very well what’s good faith: we don’t know what’s “faith,” and we don’t know what’s “good”

o Indeterminate notions like good faith must be given meaning to become significant – Hart says the obscurity of the law comes from the indeterminacy of the meaning in its communication.

a. There’s an amount of indeterminacy in the law, and the way of explaining the indeterminacy is the fact that everything that needs to be communicated needs to use language and writing. When you try to communicate through language, it’s indeterminate, because a word has several different meanings

o A civilist will maybe have a different reflex – that there’s a historical accumulation of the law and wonder about the historically accumulated meaning of good faith (from Roman law)

a. Indeterminacy of certain concepts is reflected in reservations of interpretation – the historic element of good faith is clear, but it has an indeterminate definition even as it’s part of a historical system

b. For us as jurists, the uncertainty of interpretation, and the system of explanation and signification, is a source of legal arguments

c. This civil law system does this all the time – the system of signification is developed through history (unlike the system of common law, which is developed through previous judgements)

- Contents and source : jus civile (relationship with Roman law), civil law (as distinguished from other types of law), relationship with other codified law (particularly the French civil law), juridical family (Quebec Civil law is an element of a juridical tradition)

The philosophies behind the Civil law- The moment of codification makes the Civil law become a positive law, which has a

philosophical signification – the philosophy becomes important in obligations (especially contracts)

- Civil law has important relationships with continental philosophy, particularly with two moments:

1) Natural Law (authors from the 17th century)o First reason why it’s important: this moment reinterprets the order of reason

a. Philosophers took hold of the Corpus Juris Civilis and reinterpreted it in the order of reason, in light of their own knowledge

o Second reason why it’s important: creates a space of absolute/maximum reference for the law and grand principles

2) Influence of the Enlightenment (Hegal, Rousseau, Hobbes) o Influence of the precepts of law: to live honestly, to do no wrongs against a

person, and to do unto others which you would want done unto you o The moment of codification becomes a moment of instruction to jurists –

certain philosophical concepts pass into the vocabulary of jurists

5Nicole SpadottoThe object of Civil law – liberty

- Aubry et Rau : there are necessary restrictions on the liberties of individuals so that they can co-exist with the liberties of others

o The object of Civil law in general is an exercise of general liberty for every individual/to permit individual liberty in a manner that’s compatible with other individuals

a. The Civil law grants and restricts an individual’s freedom in a way to make their freedom compatible with that of other’s

b. This is the purpose of the French Civil law particularly (Kantian definition)

o This at least partially explains the great liberalization of the Civil law (even as our freedoms are constrained by other sources of obligations, like contract or quasi-delictual)

- This definition allows for the co-existence of liberty along with the law, so it’s a philosophical definition tied to the definition of the law

o The Civil Code is massively liberal – it’s organized in a way that’s linked to liberty of persons, which has a moral and political signification

o Liberty of contract has its origin in Civil law, showing that Civil law is inherently liberal (existence of the contract is rooted in liberty of the individual)

** Common law also has a relationship with philosophy, but it’s different from Civil law – not as clear and politics might have a heavier role.

Socio-Political signification from codification - Quebec Civil law has a normative force – it seeks to structure the nation-state

Preamble: “The Civil Code of Québec, in harmony with the Charter of human rights and freedoms and the general principles of law, governs persons, relations between persons, and property.The Civil Code comprises a body of rules which, in all matters within the letter, spirit or object of its provisions, lays down the jus commune, expressly or by implication. In these matters, the Code is the foundation of all other laws, although other laws may compliment the Code or make exceptions to it.”

o The preamble clearly establishes that the Civil law isn’t limited to the pages of the CCQ

o The preamble is a manner of explaining why, in a preliminary way – before all other things, the Civil Code needs harmony

a. The private law is in harmony with the Charter, so the private law is read alongside other laws

o It refers to a notion of justice (jus commun) – a constant willingness to give to all what they deserve

Two movements to understand civil law: genealogy and autonomy 1) Genealogy – civil law is part of a tradition or a juridical family

o Quebec law is a mixture of law, because it has its origin in the colonial French Napoleonic Code – but more complex than just this also

2) Autonomy – based on Roman criteriao Juridical personality begins at birth, because it’s a necessity of life (foetus

cannot have juridical personality)o Definition of autonomy: “people need to be able to breathe alone to be

considered autonomous” – from this moment, a person has rights and a patrimony

** Quebec Civil law is defined by an act of emancipation, which creates the genetic Code that is part of a genealogical family but at the same time is also an act of autonomy.

6Nicole SpadottoThe Civil Code as emancipation – to understand what is Quebec Civil law, we must understand autonomy

- In the post-war context, General Vaudreuil demanded that Civil law be maintained as a condition for Montreal’s surrender

o Adams, the British general, responded that the defeated would be “subjects” of Britain - in the law of war, after conquest, there is the possibility of maintaining the existing private law even as public law changes to that of the winners

- In the “genetic code” of the CCQ, autonomy is engraved – from its birth, the CCQ is both a symbol and a function of emancipation (particularly political emancipation) from the British Crown

o Opposite reason in France – the Napoleonic Code was the materialization of the state’s control over French subjects

** The mixed law system after the conquest underlines the difficulty of talking about the "Civil law" of Quebec before codification. It was a system that included a variety of sources: Roman law, French law, Paris customs, and British law or common law, which itself has its own extremely heterogeneous history (ie Anglo-Saxon, Norman, etc.).

Motive for codification in Quebec- Quebec adopted the Civil Code for very different reasons than other countries

o In France, the adoption of the Code was about installing political power o In Quebec, the adoption of the Code was about clarification of laws, access to

rules, and compilation1) Clarification of laws

o The Quebec Code is not an act of rupture, because it’s a vocation of compilation – it inherited the legacy of Roman law and French law

2) Access to rules (make the rules accessible to people, and adapt a mode of life)o The goal was to compile existing laws and bring them together in one place –

there is a pluralism in the sources of the law o And also, Civil law is a law that’s integrated in a pluralistic way with the law

in the rest of Canada 3) Reaffirmation of identity

o The function of codification in Quebec resembled a nationalist assertion, as the CCBC was an act of emancipation from the British Crown (though even before codification, civil laws already had an emancipatory function in Bas-Canada)

- Why does this interest us? o There is a plurality of meanings of Quebec Civil law, which refers us to

different systems of signification and consequently potentially different explanations of what Quebec Civil law is

a. There’s a question of sources – the identity of Quebec Civil law is built on pluralism, so there’s possibility of always looking elsewhere (Forray encourages comparisons)

o Tension between identity and autonomy – Quebec is an explicit manifestation of the tension of autonomy from the English, and a reaffirmation of tradition from continental France

a. Quebec law is a law that is distinct, even as it’s part of a family of tradition

o Tension between autonomy of the Civil law and the CCQ vs. the pluralism of sources which are engraved in the identity of the Code (this tension fixes our interpretation of the laws)

a. Closed interpretation : gives autonomy to the Civil law and tends to strengthen the system, as the Civil law brings meaning to other areas of the law (closed because linked to French CVL)

7Nicole Spadotto

b. Open interpretation : another interpretation which says you must incorporate all Canadian systems together (and let external influences affect the Civil law) (CVL open because plurality)

Lorranger, “Commentaire sur le Code Civil du Bas Canada”History of Codification

- Quebec has been influenced by the English with leniency and political values, but remained French with language, religion, and laws (which preserved Quebec nationality)

- The French colonial regime in Quebec was politically deplorable, but socially it helped properly develop the national character of its habitants and create a homogeneous society

- France introduced its laws in Quebec by founding the colony: it is believed that the custom of Normandy was first followed, then the Parliament of Rouen, then finally the Custom of Paris

- When France surrendered to Britain, the Marquis de Vaudreuil made the conversation of French laws an article of capitulation; but in surrendering the habitants became the subjects of the British King (Treaty of Paris silent on this matter)

- Canada was sometimes subjected to both French and English laws through 1764-1774

The Retention of French law- The Quebec Act restored Quebec it’s bodies of laws – author sees this preservation of this body of

law in Canada as a tribute to the excellence of French law - Act of Quebec recognized civil justice in 1777 with the erection of new courts and in 1785 with the

Code of Procedure which was made by l’Ordonnance du Conseil Legislatif- Even though many institutions were from England and were veiled under English terms, they were

borrowed from the French regime → ie, Privy Council was the Conseil d’Etat of the King of France, Court of Appeal was equivalent to the Conseil Supérieur

- Civil law itself, despite the mass enormity of law made under various Constitutions, underwent few radical modifications or organic changes (ie, civil property laws are almost intact)

- The old French law was, without much mixture of foreign elements, the law of Lower Canada when the legislature decreed the drafting of the Civil Code

Codifying in Quebec – not a rupture - The CCBC has not broken with our legal past; we have on the contrary perpetuated the traditions

and strengthened the authority (the intent of the legislature was to preserve the perfection) - In proposing the law of 1857, two plans emerged: could destroy the edifice of the civil law to make

a new one, or to restructure it upon its foundations to adapt is form and distribution to new needs (went with the latter)

- In fact, the substitution of a new body of law over the ancient laws of a people supposed a profound modification in the social condition – new customs to be brought into relation with laws, new needs to satisfy. Our social condition in Canada wouldn’t justify these innovations – Canada possessed French law since the establishment of the country, and it never ceased to suit Canada. Thus, Lower Canada didn’t feel the need to repudiate French law, but rather codify it

Three Main Causes of Codification in Quebec – for the CCBC (page 37)- Confusion of laws (resulting from lack of coordination and many volumes)

o Clarified what is, and is not, the law - Need for the existence of text bilingually (the text only existed in one language)

o The Civil Code is written in both languages – French law protected rights and respected liberties, but it’s not possible for it to be accessible with ignorance of the French language

o Having the Code only in one language posed a deadlock in debate, because lawyers and jurors sought arguments and information in the legal tradition of their language

- Modifications which in time were deemed necessary o Time matters, because progress makes modification of the Code necessary – not surprising

we need the law to evolve, because legal forms that used to work may now be insufficient o What’s surprising is that needed changes weren’t numerous and addressed the application

of the principles (the practice) more than the principles themselves (the theory)

Microsoft Office User, 2019-02-19,

This is a question of identity.Idea is to identify tension – once we do this, we’re able to create possibilities of interpretation Tension that on the one hand QC Civil law is CVL, and connects the matter of autonomy to Civil law tradition. Here, identity/autonomy has to be considered as autonomy from other legal traditions in Canada (particularly English law). But at the same time, it’s also a cause for dependence – once you relate Quebec CVL with CVL in general, you create a sort of dependence with French CVL mainly (and basic interpretation of CVL concept will tend to come from the French tradition). This is a sort of problem, because the identity of QC CVL is important politically. The claim of identity isn’t satisfied by just saying that we’re going to interpret along with general CVL. On the other hand, the autonomy/identity of QC CVL has to relate to QC. Two things: CVL and QC. If you focus on CVL, you make connection with France. And then you can look at identity from the perspective of QC – which is a certain type of connection with other Canadian traditions. And here, It’s the idea of pluralism. Identity of QC CVL means the way legal institutions and thought accommodate CVL tradition with the tradition of legal pluralism. Also bilingualism.Closed in the sense of French CVL Open in the sense that it’s a CVL that’s open by essence to other traditions. Relate this to the question of the preamble

8Nicole Spadotto

Codification plan and execution of the work (42)- Commissioner’s mission was to 1) codify old laws; 2) research the sources of law; 3) introduce new

legislation, in the cases where they deem it necessary (most difficult part) - Three actors: 1) Commissioners; 2) Government; 3) Legislature - Project was drafted by the Commissioners (who only make suggestions for amendments),

submitted to the government for approval, and then approved by the legislature - Long time to draft and write it (from 1859-1866), which minimized the risk of errors – the errors

present in the Napoleonic Code (45) - Entered into force on August 1, 1866

Benefits of the Code - Includes in a single volume which was previously scattered in many books; also sources of law - Must know how the laws worked in the past, their principles, and their sources to judge the merit

of the law and now how they should be applied in the present - Forray: any codifying project is a revisionist act that cuts and makes more effective the

law (example Corpus Iuris Civilis, which cut 90% of the previous Roman law)

(II) Sources and Forms of Civil Lawa. The Law and the Code

i. Structures and values of the CodeNotion and character of the “source” of law

- Source and cause is the same idea conceptually – a point of origin (like the analogy of water coming out of the spring, but it has another origin – intellectual logic applies for the Code as well)

o By source, we mean formal sources – the sources that bring out the law in its legal form

- First manner of responding to questions of origin : 1) The facts – go back in time to explore events and writings (though there legal

entities exist without writing) 2) Metaphysical sources – there’s no such thing as metaphysical sources. The problem

of origin is a metaphysical problem, in the sense that metaphysics is the cause of all causes. Thus, the question of the origin of law is metaphysical, and the question/problem of origin is the first legal text and how law appeared in the world

** For the origin of law, there’s an unresolved relationship between material sources and the metaphysical question – there is always a initial source supposed Origin can be used as “source” – point d’origine. The reason why theory of source is origin of law in a GIVEN legal system is necessarily a theory of formal sources. The question of form gets rid of the problem of origin of law. Formal sources are text, commentaries, oral tradition. This creates a different question. So what’s important is to understand theory of sources, and in CVL it’s the main part of theory of formal sources. These are the sources of positive law.

- Notion : the point of origin as the affirmative point of where the law came from (this only is for formal law!)

o Looking for the source of the positive law that is here and now (internal point of view – concrete perspective of jurists)

o What comes before the source doesn’t have the form of law, so it’s not a source. We’ll say there’s:

a. Material sources, texts (which speak of the law), and categories It’s a material source, what the loi was before it became the

source of droit – they are concepts of the law that were used to write the laws (texts that talk about laws, norms)

9Nicole Spadotto

The Code mirrors this with categories and operations of codification

b. There’s a relationship between how we think of law (commentary) and how it’s written (text) – Civil law is a law of text and of commentary (commentary has a relationship with the first text, so it becomes a problem of what came first?)

- Character : the source of the Civil law is plural (SOURCES of law) and there’s a hierarchy to the sources

o Plurality of the laws are integrated together, but there’s also a hierarchy of sources (constantly changing because individual thought is changing)

Validity of the Code: a “formal” source- The validity, and the force of law, renders arbitrary the question of the source –

because the law is the law o The cause of formal law is the writing of the Code; once it is written, it

becomes valid law- We know law comes into the world through predetermined procedure: Parliament,

projects, voting, etc.o The text has an executing force; the text has the force of law, because it is

formal law o Whereas the rest which doesn’t come to us through predetermined

procedure is “literature” - The first motive of codification is that it allows for access to the law

o The point of origin determines the validity of the law, and the meaning of the law

o Validity makes it possible for us to recognize the law- The formal source (Code) is :

1) The point of origin of the law2) Permits the identification of the form of the law (and culture of law and the rules

of law)

Relationship between Civil law (modern) and “la loi” - Today’s Civil law is modern, from about the 18th century - La loi is the first form of law – it’s the privileged form, the substantial form, the

essential form, the first form to which we always refer- Predetermined production :

o La loi civiliste is a deliberate law: it results from a predetermined process, and it’s production is inscribed in a politico-juridical culture (like the Parliamentary system)

a. The law formulates a body that is identifiable and knowno The making of law is entrusted to a political system, ideally democratic,

based on a system based on predetermined values (democracy, rule of law, etc.) – Forray says this is legal modernity

a. In a technical sense, the law must be understood as any rule of law formulated by a competent state or super-state body, whatever that body may be

b. Laws become from conscious thoughts, and these laws are positive generally (as written rules are the form of our legal system) – laws can also be based in customs that were codified and compiled, but this inclusion is informal

What distinguishes a real Code is when the laws are thought about, and the generality of the Code becomes more precise in its use

10Nicole Spadotto

This idea is interesting if you relate it to jurisprudence and the position of the judge. Judges make legal interpretation in a particular case.

This is the same idea as when you interpret as a jurist – you make the interpretation of the CCQ more precise by shifting from a general provision to a particular case. Make meaning to generality through a particular case

c. For example, the law modified the Civil Code with legislative dispositions with adoption, information disclosure, Constitutional law in 1982…

o The Civil law is not like the spontaneous decisions of the Common law – in Common law, there are infinite formulations that are possible

Le droit c’est la loi- Saying “le droit c’est la loi” is a scandalous and great reduction – and it has been

used by positivists to justify scandalous behaviour - However, this is the modern legal equation – “le droit c’est la loi, la loi c’est l’état,

l’état c’est nous” (and this has led to a bit of a catastrophe, as we saw in Europe historically)

o The law after this determination is a positive law in general Hegel, “Principes de la philosphie du droit, 1820” – extracts from paragraph 211 (translation mine)

- “What is “droit” in itself is posited in its objective existence, that is, defined for consciousness by thought. It is known as what is and its precise worth: c’est la loi. And this “droit,” after this determination, is positive law in general […] by bringing content to its most simple form, the thought gives it its final determination. That which is the “droit” must become “loi” to receive not only the form of its universality, but also its true determination. Also, the idea of legislation doesn’t only signify that something is expressed as a rule of conduct that is valid for all: its intimate essence is before all a recognition of content in its defined universality…”

- Original : « Ce qui est en soi le droit est posé dans son existence objective, c’est-à-dire défini pour la conscience par la pensée. Il est connu comme ce qui est et vaut justement : c’est la loi. Et ce droit, d'après cette détermination, est le droit positif en général. R : […] En ramenant un contenu à sa forme la plus simple, la pensée lui donne sa dernière détermination. Ce qui est le droit doit devenir loi pour recevoir non seulement la forme de son universalité mais encore sa vraie détermination. Aussi l’idée de législation ne signifie pas seulement que quelque chose est exprimé comme règle de conduite valable pour tous : son essence intime est avant tout la reconnaissance du contenu dans son universalité définie […] »

La loi as the form of droitHegel, “Principes de la philosphie du droit, 1820” (translation mine)

- “If customary rights are assembled and codified, which does not fail to happen quickly in a people which attain some culture, the collection thus constituted is a code. This code, because it is nothing more than a collection, has a formless, vague, and incomplete character. It’s this that distinguishes it from what we call a true code – it’s that the true code is conceived by thought and expresses principles of law in their universality, and therefore in their precision”

- Original : « Si les droits coutumiers en arrivent à être rassemblés et codifiés, ce qui ne peut manquer d’arriver vite dans un peuple qui atteint quelque culture, la collection ainsi constituée est le code. Celui-ci, parce qu’il n’est qu’une collection, aura un caractère informe, vague et incomplet. Ce qui le distinguera surtout de ce qu’on appelle vraiment un code, c’est que les vrais codes conçoivent par la pensée et expriment les principes du droit dans leur universalité et par suite, dans leur précision. »

11Nicole Spadotto

o There’s a notion in this text that a civilization without a codified legal system is not cultivated

o Great codifications were already happening at the moment Hegel wrote this text – this passage shows well the importance of codification and its irreducibility

o There’s a symbolic charge to codification – the idea of universality of codification to understand that it has a symbolic value beyond simply an exercise in gathering texts (though in modernity, codes are very localized)

Civil Code of Quebec- Codes have a structure and a form – to understand the CCQ, we must understand its

structure - Books of the Code:

o Book I: Personsa. Title I: Enjoyment and Exercise of Civil Rights

First provisions place the person at the centre of the Civil law CCQ 1: Every human being possesses juridical personality and

has the full enjoyment of civil rights. CCQ 2: Every person is the holder of a patrimony.

It may be subject of division or of an appropriation to a purpose, but only to the extent provided by law.

CCQ 3: Every person is the holder of personality rights, such as the right to life, the right to inviolability and integrity of his person, and the right to the respect of his name, reputation, and privacy. These rights are inalienable.

b. Title II: Certain Personality Rightsc. Title III: Certain Particulars Relating to the Status of Personsd. Title IV: Capacity of Personse. Title V: Legal Persons

o Book II: Familya. Title I: Marriage

Title I.I: Civil Unionb. Title II: Filiation c. Title III: Obligation of Supportd. Title IV: Parental Support

o Book III: Succession a. Title I: Opening of Successions and Qualities Required to Inheritb. Title II: Transmission of Successionsc. Title III: Legal Devolution of Successionsd. Title IV: Willse. Title V: Liquidation of Successionsf. Title VI: Partition of Successions

o Book IV: Propertya. General Provision b. Title I: Kinds of Property and its Appropriation c. Title II: Ownership d. Title III: Modalities of Ownershipe. Title IV: Dismemberments of the Right of Ownership f. Title V: Restrictions on the Free Disposition of Certain Propertyg. Title VI: Certain Patrimonies by Appropriation h. Title VII: Administration of the Property of Others

o Book V: Obligationsa. Title I: Obligations in Generalb. Title II: Nominate Contracts

o Book VI: Prior claims and hypothecs

12Nicole Spadotto

a. Title I: Common pledge of creditors (du gage commun des créances) Very important – it’s the obligation to control the

debtors who do not pay you as the creditor In reality, it’s the right of creditors to be paid This is a symbolic choice to place this at the beginning

of the book of priorities b. Title II: Prior Claimsc. Title III: Hypothecs

Choice to make the hypothec a priority is symbolic, because it’s an organization of economic life

o Book VII: Evidence This is the first book dedicated to the perspective of the juridical resolution of our rights. A big part of realizing the law, a first condition to realize the law, is to realize justice (though it’s not simply just this). The book on evidence is a judicial realization of a procedure, general regime, and how we’ll prove things. There’s a judicial realization in this book of the operation of justice. Shows that part of the realization of the law is judicial.

a. Title I: General Rules of Evidenceb. Title II: Means of Proofc. Title III: Admissibility of Evidence and Means of Proof

o Book VIII: Prescription – Conditions to realize rights a. Title I: Rules Governing Prescription b. Title II: Acquisitive Prescription c. Title III: Extinctive Prescription

o Book IX: Publication of rights Important for situations where political uncertainty cannot guarantee property. The only way to secure property is through publicity, because if you don’t register property or make ownership public, then in situations of political flux your property can get wiped away. Publicity and registries are huge instruments of political power. Droit des biens is a return to fact.

a. Title I: Nature and Scope of Publication b. Title II: Effects of Publication c. Title III: Modalities of Publication d. Title IV: Immatriculation of Immovables e. Title V: Cancellation

o Book X: Private international law – Interesting because it positions international law vis-à-vis Quebec law. It’s possible to think of the internationality of law as the circulation of people, but it’s still an interesting choice of the legislature to put it in the CCQ.

a. Title I: General Provisionsb. Title II: Conflict of Lawsc. Title III: International Jurisdiction of Quebec Authoritiesd. Title IV: Recognition and Enforcement of Foreign Decisions and

Jurisdiction of Foreign Authorities o Final Provisions

** The structure of the Code seems to build on top of one another – you can’t have family without persons. Successions only exist if there is a family. Successions govern property. If people have property, they thus have obligations towards one another.

Principles of Organization of the Code- It’s great modernity (ie, modernization of Quebec Civil law has been to bring it into

harmony with the economic and social realities of our time), and also: 1) Primacy of the person

13Nicole Spadotto

o There is a clear primacy of the person – the three first books deal with the person (ie, Persons, Family, Succession)

o The Code starts with the person, and the rest is concerned with the juridical function of the person

o Family is the modality of organization of a group of peopleo Succession is the law of dying (and death itself is currently absent from the

CCQ)o Obligation is about the person as an economic actor o Private international law isn’t really about the person – but this part of the

Code feels displaced 2) The structure – person, property, actions

o Structured with the old principle of organization of the French Civil Code o This trio is final in the law, and this is the realization of law – as everything

flows from this structure o In Roman law, there was a link between persons, property, and obligations

3) Legal representation of persons o Also includes the legal activity of persons, and realization of the rights of the

person o The Civil law is a representation of a social world

Structural Analysis of the Code- From the point of view of the Civil law, the Code is a corpus and a formal

“constitution”- There’s a clear division of the rules – the Code has a general point of view and then

it narrows into articles - We’re always looking for structure in the Code, because the structure is scientific

and efficacious - Books of the Civil Code show : 1) Continuity of the rules, and that the structure is the key to interpreting the rules

o The structure is a “codage” of civil law o The Code is a “formal constitution” – it’s a corpus, a clear constitution of the

rules o Forray says to always look at the structure of the Code to find what you’re

looking for, not key words. If you use key words to search, you get the sources in an order that creates a rupture between the manner the law functions in the socio-juridical sphere and how the mode of searching artificially gives us a result.

2) The legal frames in a social space (shows the domains of the Civil Code) o This is a big difference with the Common law, as the Common law begins

with an injustice and the law intervenes when the problem arises. It has no pretense of mapping individual and social life.

o Civil law is a project of society, as it frames the individual in a social world – and the structure of the Civil Code is a framing of the individual in a social world, a legal world, a world of discipline, and obligations in society (it all begins with the person)

ii. The harmony to which the preamble refers: the Charter and Civil law

The Preliminary Provision of the Civil CodeThe Civil Code of Quebec, in harmony with the Charter of human rights and freedoms and the general principles of law, governs persons, relations between persons, and property.The Civil Code comprises a body of rules which, in all matters within the letter, spirit or object of its provisions, lays down the jus commune, expressly or by implication. In these

14Nicole Spadottomatters, the Code is the foundation of all other laws, although other laws may complement the Code or make exceptions to it.

- The preliminary provision gives the authority to general principles of law. The Code is established as the jus commune, so it’s a disposition of the source of law – and the source of Quebec law specifically

- The Civil Code has historical and contextual density, whereas the Quebec Charter is thin historically and culturally

o But the Quebec Charter is in a way larger and broader than the CCQ as the Charter has a quasi-constitutional vocation

- Key principles from the preamble setting up the provision of sources: jus commune and harmony

** What arises from the text of the preamble? That there are many sources of law. How do we know these are sources of law? They govern.

First Paragraph of the Preamble – What are the Sources?: The Civil Code of Quebec, in harmony with the Charter of human rights and freedoms and the general principles of law, governs persons, relations between persons, and property.

1) Plurality – illuminated by harmonyo Plurality is seen in the Code, the Charter, and general principles of the law o Harmony is almost a mode of operation – goes hand-in-hand with conflict of

the laws, but the Code says that it’s not going to work in terms of conflict, but rather in terms of harmony of law

o This is a methodological proposition of interpretation, in a manner to make the whole coherent

o We’re interested in the sources of Civil law, and a characteristic element of the sources is their plurality

o Necessarily, because of the existence of pluralism, there becomes a question of hierarchy – the notion of harmony seems to suggest that there’s also a hierarchical order

2) “Régit”/GovernsSources of the law

a. CCQ b. The Quebec Charter (the SCC says it’s a quasi-constitutional statute)

a. The Charter has a normative formal orderb. It’s at the summit of the hierarchy of form and content

c. General principles of law : it’s the normative form of scholarly (“savant”) law c. Why? The general principles of law have been developed by jurists

and legal scholars (through legal thought and the science of law) as principles of articulation of different systems of law in force (not posed by a state or super-state body)

d. Scholarly law/droit savant is doctrinal law with a very strong normative force

It’s the opinion of savant jurists/learned legal scholars: principles articulated in medieval Europe with the force of science (an articulation of culture, an affirmation of certain generalities with a dogmatic function) – not exactly the same as the doctrine we have today

Droit savant = affirmations with a certain level of generality to constitute dogma

e. There were several concurrent systems of law (ie, customary law): the principles from droit savant, by being “above” competing legal systems, harmonized them

15Nicole Spadotto

Savant jurists looked at the science of the law, and formed the principles of the vocation – brought together different cultures and harmonized them

f. All this is to say that dogmatism in the Civil law is central – the text is a fruit of historical thought and conceptualization, and the general principles of law infuse the text

Examples: puncta sunt servanda is the most famous (principle which gives force to conventions) – to not enrich oneself at the expense of others

g. Hart : idea of primary and secondary rules – a judge will decide not only with primary rules (ie, text, rules), but also with secondary rules (ie, rules about rules which set up how primary rules are introduced, modified, or enforced)

h. Dworkin : explains the general principle of wrongdoing, that one shouldn’t take advantage of harm committed to others – even with rules, this general principle guides the decision-maker (Dworkin says it’s not possible to explain how a legal system works with only the concept of rules)

If we transpose this theory into today, it does a good job explaining the constitution and the statute as functioning with the general principles of the law (droit savant)

i. Normative force: these principles have gained normative force over time (“super-sources du droit”)

Principle = prince = governance = principles govern all d. Common objects: the objects of different sources

j. On the face of it, simple: there’s a relationship between people and the Civil law

k. The preamble is looking at the person, property, and the relationship between the two

1) First possibility: The law that governs the relations between persons and property is not only Civil law (interesting, because cannot reduce the law of persons, or the relations between them, to the Civil Code which has influence on the droit commun/jus commune) l. Civil law goes beyond the Civil Code: if the object of the Civil law is

persons, property, and the relationship between the two, then the Civil law is broader than just the CCQ

m. Therefore, the Civil law of Quebec becomes the CCQ + the Charter + general provisions

In this conception, the spirit of the Code and the Charter match

n. The text has the function of harmonizing the Civil law (Quebec Civil law is thus a positive law manifested by the general principles found in the Civil Code and the Charter)

o. This brings us back to the principle of jus commune (droit commun) 2) Second possibility: Civil Code actually governs relations between persons

and property, and interpretation is informed by the Charterp. Quebec law is pluralist, but the relationship between them is the Civil

Code/lawq. Here we can pose the question about the autonomy of the Charter –

the general principles in this case are nourished by legal action

Implications for interpretation: codification itself isn’t enough to answer all questions. “No vehicles in the park” doesn’t mean anything if we cannot interpret the words “vehicles” and “park.” The general principles of law facilitate this interpretation. Forray relies on jurisprudential interpretation to ascertain/draw out the principles. The existence

16Nicole Spadottoof general principles are a sure sign of plurality of the laws. And in all cases, the general principles are placed very high in the hierarchy of sources.

- “Indeed it can be argued that in the civil law tradition of France and Quebec, the recognition of the ultimate insufficiency of legislative enactment is a central tenet of the very philosophy of the Civil Code as a style of law-making,” – Brierley, “Quebec’s « Common Law » : How many are there?”

Second Paragraph of the Preamble: Droit CommunThe Civil Code comprises a body of rules which, in all matters within the letter, spirit or object of its provisions, lays down the jus commune, expressly or by implication. In these matters, the Code is the foundation of all other laws, although other laws may complement the Code or make exceptions to it.

3) Jus Commune (Droit commun en français) o Central concept that all of us are the source, and at the same time is a

manner to regulate the relationships between people o Concept which seems to give us an image of unfolding of sources and also a

manner of regulating relationships ** Two ways to understand jus commune

a. Narrow Interpretation: The various sources likely to govern private law relations contribute to the formation of civil law and therefore converge in the CCQ. These sources are organized by and around the CCQ. In this sense, the Code retains referential value and a symbolic value.

a. The different sources together form the civil law, and converge in the Civil Code (droit commun is organized in the Civil Code)

b. The Code is a conceptual resource. The Code helps us to apply other laws and is the substantial link to other laws. The Preliminary Provision appears to embody such an interpretation: “…the Code is the foundation of all other laws”

c. The Civil Code is something common/general, as opposed to specialized (as we see in specific laws) – in this sense, the Code conserves referential and symbolic value

d. Example : law of contracts is in the Code is general (the “droit commun” of contracts), and named contracts outside the Code are specific (more specific manifestation of rights of contract)

In the event of incompatibility between general and specific laws, specific laws prevail over general

b. Wide Interpretation: More subversive but perhaps more interesting/revealing interpretation of the state of Quebec Civil law – Civil law does not have a monopoly on the regulation of private law. The mere fact that Canadian federal law exists seems to support this second approach. The subversive nature of this approach depends on the relationship between Civil law and jus commune and the resulting tension.

e. The Code is normative, and is a commentary between different areas of civil matters

f. The residual jus commun lives in the Code. One refers to the Code when only where no specific statute seems to apply or provide an adequate solution.

g. Creates an opposition with “droit commun” and special law – statutes (droit propre) now often supplant the Code (droit commun)

h. Droit commun applies to everyone, all the time, and everywhere within the limits of special law – in other words, the droit commun applies automatically if there is an absence of a specific law (thus, droit commun supplements the legislated/special law)

Hierarchy: 1) specific law; 2) if it doesn’t exist, then droit commun


Basic law, the law applicable to all save exceptions. Droit commun/jus commune is additional rules which apply in the absence of a more special regulation. Farnell says that jus commune is a “clean-slate” base upon which civil law is built. He says that if the preliminary provision establishes the CCQ as the jus commune, there does not seem to be anything “under” the Civil Code (as it is law which supplements). Jus commune in general: like a law which supplements, ie will step in without particular laws to fill in the gapsJus commune in Quebec: “general principles of law” opens Quebec Civil law to provisions with “informal” sources (like good faith)

17Nicole Spadotto

In purely hierarchical terms, Forray believes the Charter (specific law) is above the CCQ (droit commun)

BUT keep notion of harmony in mind: we don’t want a conflict between the laws (fundamental note sets the tone, and the other notes create harmony: notion here is the Code isn’t enough to “set the tone” as the highest form of legislation)

The Code thus has symbolic value, but doesn’t on its own create harmony – it rather adds to the other legislation by harmonizing

** We can make the relationship between the Quebec Charter and the Civil Code concrete by looking at Béliveau

Béliveau c. St-JacquesFacts: Woman sexually harassed in the workplace. She filed a claim under special law (workers’ compensation under LATMP). She is suing in civil liability for moral damages and exemplary damages. These damages in civil liability would be obtained in addition to the compensation (for bodily injury and loss of income) that she has already received from Workers Compensation. S. 438 of the LATMP (workers’ compensation scheme) legislation bars recourse under civil liability when one is indemnified under the LATMP. S. 49 of the Quebec Charter entitles a person who’s rights have been interfered with to obtain compensation for moral and material prejudice and exemplary damages.

Issues: Does an action under s. 49 count as an action under civil liability?

Judicial History:At the SCC.

Decision:

Legal Reasoning:The judges said: 1) The civil liability action is closed when you have been indemnified; and 2) The action brought on the basis of the Charter (a. 49) for damages involves compensatory damages and punitive damages. Civil action is thus impossible because in competition with action by Charter s. 49. Compensation must conform with the principle of restitutio in integrum. Thus for a given fact situation, the Charter cannot authorize double compensation. The Charter doesn’t create a parallel compensation scheme. Under s. 49, the person also has to prove a prejudice, a fault, and a causal link (same as CCQ 1457). S. 49 just formalizes conduct that would normally fall under 1457. S. 49 is not a separate autonomous regime, but rather is a specific application of 1457; it defines what wrongful behaviour is. (i.e. 1457: Every person has a duty to abide by the rules of conduct which lie upon him, according to…law, so as not to cause injury to another. The Charter is such “law”).

Ratio: 1) The Charter, a quasi-constitutional document, should not be subject to the Code, which is a

legislative document. However, it is recognized that the principles of droit commun/jus commune (ie the principles of the Code) must be respected in the remedies permitted by the Charter.

2) An action, whether taken under Quebec Charter s. 49(1) or CCQ 1457, is subject to the civil law principles of recovery – thus, need fault, damage and causation. Judges agree that Charter does not provide its own separate remedy - it is a specific and formalized application of Art. 1457. Thus, violations of fundamental rights are redressed in the arena of civil liability.

Notes:It’s important to note that the judge clearly states that the Quebec Charter takes precedence in the Quebec normative order over the rules of droit commun. However Béliveau demonstrates that not all parts of the Charter take precedence over the Civil law (droit commun) because s. 49 doesn’t have

18Nicole Spadotto

primacy over CCQ 1457. In this case Civil law is the source – the Charter recourse in this case goes through civil responsibility, because Béliveau says compensatory interest damages is a recourse of civil responsibility.

De Montigny c. BrossardFacts: B strangled his former spouse and drowned their two children. He then committed suicide. M, S, and K instituted an action in civil liability on their own behalf as heirs and liquidators of the victims’ successions, claiming compensatory and punitive damages from B’s succession.

Issues: Can the harm suffered by the victims be transferred to their patrimonies so that the damages to which they’re entitled can pass along to their heirs?

Judicial History:Trial judge concluded the compensation for suffering, pain, and loss of expectation of life (of the victims) could be transmitted to heirs only where evidence showed a sufficient period of time elapsed between the wrongful act and the death and that the victim had actually felt pain. The deaths here were almost immediate, so damages couldn’t be awarded. He concluded that punitive damages were incidental to compensatory damages, so a right to punitive damages didn’t become part of the victim’s patrimony which could be transmitted to heirs. Judge did award M, S, and K the personal action and damages for solatium doloris and loss of moral support. CoA upheld. Now at SCC.

Decision:Appeal to be allowed in part.

Legal Reasoning:The judge created interest damages born of the patrimonies of the victim – he found a prejudice here because the applicants had suffered (demonstrates the spectre/ghost of judges – though this is a side-point). Judge doesn’t intervene in the trial judge’s determination of the personal action or award of moral damages. The judge rules that the claim for punitive damages under s. 49(2) of the Quebec Charter is admissible, even in the absence of an award of compensatory damages. The opinion of Béliveau was too wide – it excluded an action under s. 49(2) of the Quebec Charter only in cases involving public compensation schemes. Outside this context, punitive damages under the Charter can be autonomous without needing to go through civil liability. The Quebec Charter’s quasi-constitutional status means that it prevails over general legal rules in the Quebec normative order (droit commun). If the autonomy of awarding putative damages under the Charter is denied by first asking the plaintiff to prove that they were entitled to bring a civil action, this amounts to making the Charter rights and freedoms subject to civil law actions, which isn’t justifiable. Denunciation contributes to the preventive objective of CCQ 1621 just as much as punishment and deterrence, there is no reason to refuse to recognize denunciation as an objective of punitive damages in Quebec Civil law, especially where the issue is respect for the rights and freedoms guaranteed by the Quebec Charter.

Ratio: The Charter in the normative order of Quebec is above the rules of the common law. The judge is looking at the order of the sources here and categorizing them into a specific regime. He says that the Quebec Charter has an autonomous character to punitive interest damages, so that it doesn’t need to rely on civil liability to get punitive damages under s. 49(2). This backpedals a bit on Béliveau, when judge said civil responsibility is rooted in the Code.

Notes:There’s no reason to confuse actions under the Charter and under civil responsibility. They do not have the same basis. Even though this action is not classified as an action of civil liability, but rather is an action under only the Charter, the same evidence must still be demonstrated (fault, prejudice, and a

19Nicole Spadotto

causal link between the two). Prejudice is a violation of a right that the law protects – this is what the Charter protects from. The Civil Code in this sense is the dictionary, to which we can look for the normative conditions for recourse. In this sense, the Code has elements of the “droit commun” (the Code is the source of “droit commun”).

Rivet et Montpetit, “L’incorporation doctrinaire des élements constitutifs de résponsibilité civile dans l’analyse de la Charte Québécoise: derives conceptuelle” (923-948) ThesisThe Civil Code is supposed to be the conceptual foundation of our droit commun, and the Charter, by its quasi-constitutional character, is the foundation of all the laws in this field - which includes the Civil Code. But Béliveau shows that the substantive rights solemnly affirmed in the Charter are specifically intended to be implemented by civil law (droit commun).

- Béliveau de facto grants supremacy to the principles of droit commun civil liability. This is done by subjecting the violation of a Quebec Charter right to the presence of a misconduct within the meaning of the CCQ (prejudice, fault, causal link).

- Since Béliveau, the violation of a Quebec Charter right must be conceived of as a civil fault within the meaning of CCQ 1457, and the remedy which sanctions this violation doesn’t differ from the civil liability regime.

We therefore have a paradox - the Charter is the foundation of the Civil Code, but it is through the Civil Code that substantive rights in the Charter must be implemented. It is a theoretical problem: on the one hand, a privileged status is granted to the Charter, and on the other hand, the application of the Charter is not effective without the Civil Code. Béliveau thus transforms the quasi-constitutional protection of the Charter into almost civil protection.

Baudouin on the complexity of law- Codification of the civil law was an occasion for Baudouin to share reflections on the challenges it

represents now for the future. He notably underlined the difficulty in managing the complexification of law

- Raising these challenges was necessary to the system of codification to plaice a permanent adaptation and to preserve the hierarchy of sources which distinguished the civil law from the common law and public law

The relationship between the Quebec Charter and the private law - Quebec Charter had an impact on the private law – publication of the Charter by public law was

inevitable- Importance of harmonizing the values which the two disciplines (Charter and private law)

represented – we are invited to open now modalities, and new ways to speak of the law- The preamble of the Civil Code, the first element of a new “droit commun,” permits the historical

continuity of law in a coherent way- Also allows the legislature to formally recognize fundamental rights and liberties in a document

that the high tribunal qualifies as quasi-constitutional- Complexification of law, not only exacerbated by adoption of the Charter, but also by

internationalization of law and increasing legislative activity – produces an antithetical effect with the simplification of statement of rules which characterizes the Civil Code

- Harmonization of the Civil Code with the Quebec Charter, in respect to the hierarchy of sources (formal and material) is a reason for an application very studious and nuanced in the notions of fault and prejudice, and conditions of reparations of article 49 of the Charter

- The Charter is supplementary to the principles of civil responsibility – at the end of Béliveau St-Jaques, the SCC refused to distinguish the general regime of civil responsibility from the specific recourses available under article 49 of the Charter

- It’s difficult to reconcile the general principles of civil responsibility with the fundamental rights and freedoms, specifically regarding the recourse of article 49 of the Charter

Hierarchy of Norms and their Implementation: Creativity and Flexibility - If the Civil Code constitutes the fundamental concept of our “droit commun,” the text of the

20Nicole SpadottoCharter (quasi-constitutional, fundamental, special) constitutes the foundation of fundamental rights and liberties, and thus the fundamentals of all the other law in its domain – which includes the Civil Code

- Look at the preamble of the Civil Code, which mentions that it is in harmony with the Charter of Rights and Freedoms of the person and general principles of law, persons, relations between persons, and property.” In other words, harmony cannot in principle admit that the Code becomes the conceptual backdrop for the rights and liberties in the Charter

- Adoption of the Charter does not operate as a simple “crystallization” of the law outside that which was supported by the CCBC – the Charter is influenced by int’l thought and texts relative to rights and liberties. It’s also a substantial consolidation of our normative values in the Quebec legal system

The Relationship between the Charter and the Code – it’s ambiguous - At the end of Béliveau St-Jacques, there was a de facto effect of the supremacy of the principles of

civil responsibility in “droit commun” vis-à-vis the Charter, because the court subjected a violation of a Charter-guaranteed right to the presence of wrongful conduct within the meaning of the Code

- Real effectiveness of rights depends essentially on the possibility of implementing the appropriate recourse based on the circumstances – implicates the harmony that’s normative in the Civil Code and the Charter

- Ie, LeBel wrote in obiter in Vice-Versa that the notions of fault and prejudice sometimes cannot account for complexity, and cannot protect the rights that the Charter will

- In CML, the Supreme Court established an autonomous characterisation of the legislation on the rights of person in the “droit commun” (Bhadauria); there’s considerable formal autonomy of the Charter which permits us to distinguish it from the regime of civil responsibility in Quebec

- In a paradoxical fashion, the objective of harmonizing diverse laws on the rights of the person in Canada guarantees a more respectful recognition of the specificity of the Charter and its legal status in the hierarchy of sources than what Quebec Civil law is in a position to ensure

Béliveau- In Beliveau, the SCC examined for the first time the interaction between the Charter and the

regime of civil responsibility of the “droit commun.” The court had to determine if the recourse in the Charter under article 49 constituted an action of civil responsibility

- The SCC concluded that the principal resource (compensatory nature) offered by the first line in article 49 of the Charter didn’t possess an autonomy of principle that allowed for it to be distinguished from civil responsibility. The majority, led by Gonthier, said that the recourse of damages immediately relies on the regime of civil responsibility

- Second line of article 49 of the Quebec Charter: In case of unlawful and intentional interference, the tribunal may, in addition, condemn the person guilty of it to punitive damages. This necessitates a fault and intentional characteristic

- The minority, led by L’Heureux-Dubé, took a literal, contextual, and logical interpretation – saying the recourse by virtue of the Charter is the only case where the element of fault is sought to constitute a responsibility (not found elsewhere the Charter, so separate)

- It’s on this backdrop that at in Béliveau a violation of a right in the Charter is conceived like a civil fault in the sense of CCCQ 1457 - with recourse for sanctions of a violation, it doesn’t differ from civil responsibility because you need to prove a fault, a prejudice, and a causal link

- In sum, Béliveau – regarding the question of the hierarchy of sources – transformed a quasi-constitutional protection into a quasi-civiliste protection

De Montigny – nuances the principles established in Béliveau - This case was about B’s murdering of his ex-conjointe and their two little girls; the inheritors of the

conjointe wanted compensatory and punitive damages against the succession of the murderer (he had committed suicide)

- LeBel in the name of the court confirmed the autonomy of recourse for punitive damages in the Charter – they did this by interpreting the second line of s. 49 of the Charter

- LeBel’s solution: inspired by the common law, LeBel inserted a third objective of attribution of

21Nicole Spadottopunitive damages: denunciation (was paying out a symbolic or important sum of money to affirm the importance of law and to underline the dishonour attached to the person who faulted) and noted this denunciation had a preventative effect

- The SCC concluded that the unlawful interference with the victim’s right to life was intentional per the second line of s. 49 of the Charter – the inheritors got a symbolic sum of $10,000 for social denunciation of the act

- Montigny indicates that the law evolved, and also lost a bit of its juridical coherence – the case doesn’t overturn the solution of the majority in Béliveau even though LeBel adopted L’Heureux-Dubé’s solution

- LeBel noted that even as there was autonomy to the second line of article 49, there is always a partial restraint on it by the existence of the proof conforming to the principals of the “droit commun” (fault, prejudice suffered, causal link) in the responsibility in the sense of the CCQ

The Current State- The defense of rights, in the sense of an affirmation of constitutional values…is not only about the

victims, but society as a whole (it’s for the confidence of the public and vigor in the protection of the constitution) – damages is for the prejudice caused against the state and the society by a violation of the Quebec Charter

- In finding the existence of an illicit interference, one also must demonstrate that a law protected by the Quebec Charter was violated and that this violation resulted in a way that was one’s fault

- Thus – unlawful interference is a violation of a right with a fault component. This fault is transgression of a norm dictated by the Charter. And, at the end of the day, isn’t establishing the presence of a prejudice in a sense civil responsibility?

MacDonald and Brierly, “Quebec Civil Law” (supplementary reading) On the relationship between the Charter and Quebec civil responsibility

- Canadian Charter as a political constitution has had the effect of diminishing the symbolic role of the Code as a social constitution

- The Charter can be invoked as a censor of the Civil Code because the latter is a legislative enactment

- Articles in the Code do envision that kind of state action to which the Charter could apply - Federal public law, both practically and symbolically, assumes a rank in the hierarchy of legal

norms superior to the Civil Code- Subservience of Civil Code as a social-constitution to the Charter of human rights and freedoms

(the Quebec Charter is a political constitution projected into private law) - On the other hand, where individuals are left to govern own affairs = private law and governed by

the Code. The Code serves the people, who themselves infuse it with life - In practice, it’s difficult to discern any great technical difference in the relative hierarchy of the

Code and other legislation (ie, the Code can be amended as ordinary statute)- However, because Code is equivalent to unlegislated common law in Common Law, in theory it’s

the foundational legislative instrument in Quebec (“droit commun”) and thus the pre-eminent normative artifact of the Civil Law

To Conclude: two elements 1) This is uncertain terrain regarding what the source is

o The position of the Charter vis-à-vis the CCQ is not clear, and the relationship between the two regarding obligations isn’t clear

o This leaves lots of latitude2) There is necessity for interpretation on the part of jurists

o There is a place for interpretation in the articulation of the sources between the Charter and the Civil Code

o This isn’t a mechanic interpretation – the potential for interpretation is immense

22Nicole Spadotto

b. Judgements and JurisprudenceSummary: The judge is the guardian of the legal system, but he is not in charge. He is not the creator of the law, but without him the law would have no effect. Jurisprudence does not create the law, but there is no law without jurisprudence. Thus, the law is not only in the rules, but also in the application of the rules. Jurisprudence is the form that the application of the law takes. ** We’re still in understanding the sources for positive law

Spectre (ghost) of the Judge- The civilist project installs a hierarchy of values with the Code at the top – this

disrupts the role of the judge - Derrida says the judge is a “spectre” in the civil law – if the law functions as it

should, there would be no judge, because the existence of the right alone is supposed to satisfy the fullness of the right

o The historical figure of the judge in Civil law may be seen as a breach of the separation of powers between the judiciary and legislature, as the legislature is meant to create the laws – hence the “death” of the judge

o However, since we need the judge for the decision-making aspects of the law, he is returned – hence, the “ghost”/spectre

- In the mind of the public, the law is 1) the rule; and 2) the judgement (we need the judge for the judgment)

Why speak of the spectre/ghost of the judge? Because the Civil law codification project reduces judicial work

- The judge is an organ of the application of the law – (s)he is a corollary as a consequence of the codification of the law; the judge is completely ambivalent, but moves the law

- Problematic relationship between the law and the act of saying, but codification theoretically indicates the law, and the judge applies the law

- The work of the judge is also codified within the CCP – the judge becomes the enforcement agency of the law

Two profound notions of the civilist project- 1) We don’t wait for the formation of an injustice for the law to intervene. At birth,

the individual is juridical. The law seizes individuals a priori, which assures order and social justice

o This is simultaneously oppressive and liberating project – one does not have the choice of being subject to civil law jurisdiction, but the person is free from the “politico-teleological" system

a. Teleology is an explanation for something in function of its end, purpose, or goal (Wiki)

o This is embedded in the structure of the Civil Code – the individual is transformed by the language of the law

o Unlike Common Law, the law exists even before the formation of injusticeo The rules of law are simply moral, and the rules of law are the rules of life

(the rule of law assumes the role previously assigned to morality) – the Civil law responds to the question of “what should I do?”

a. There is a passage of morals to the law, which is formalized by the legislator

b. Thus, codification eliminates the distinction between law and social order, because the law becomes/is social order through codification

- 2) The judge is the guardian of the justice system. They are not responsible for justice, but they solidify and make concrete laws in litigation situations which are considered abnormalities


What’s a politico-teleological system? Decisions made as a function as politically what kind of outcomes we want in the future (decisions made as a result of political purpose)The Common law does this – retroactively to the moment of your action (makes individual actions the focal point of forward looking political decisions). The Common law needs you to build the rules, and will “sacrifice” individuals to do so. Links to liberty.The Civil law, doesn’t subject you to a post-hoc political decision making process, because all the rules are already there (doesn’t make the individual the focal point of these decisions. The focal point is the legislature looking forward to every possible action so the person doesn’t have to be subject to looking post hoc). The system won’t shackle you to something you did before you knew it was right or wrong). The system is already in place in the Civil law. It’s freeing in the sense you’re not the guinea pig of the law.

23Nicole Spadotto

o The judge rectifies problematic elements so that the law conforms with the rules – the judge is auxiliary to the relationship between people and the law, but he corrects anomalies by reference to the rules (to see what the rules precisely say)

a. Geometric idea of the rule – one deviates and is brought back to the right path by the judge

b. The notion of the rule of law isn’t just about regulating disputes, but also about regulating human life – here, in a just society, the judge is auxiliary and serves to solve problems

c. In the Common law, the judge has a role in forming the rules; in Civil law, the judge listens to the codification (the rules say what to do) and then applying it

Codification and the judge – even as his role is reduced, the judge “haunts” the law because he is constantly there

- There’s no contradiction that the law is codified and the presence of a judge: the judge needs to interpret and apply the principles

o The judge thus has a role to play in the formulation of laws, because he interprets the laws even as the rules still have primacy

- Calling a judge a spectre/ghost refers to their position as a supervisor and influencer of the law (they’ve held this role since the first codification projects)

o Forray: by eradicating the teacher, we make him/her more visible in some ways – ie, the more you codify and force written rules, the more we create space for the judge

o In Common law, because judges end up using previous case as precedent, their role is consequently minimized

- The civilist project… o Makes the legal subordinate to politics – because the legislature creates the

law and the judge interprets it (BUT the interpretation of the judge is vital, because without it it’s impossible to apply the law)

o The judge reconfigures the Civil law through his judgments – if the text is clear, he has nothing to say (text subordinates the judge), but when the text is silent or obscure we really need the judge (his interpretation is thus subordinated only to ambiguity)

The specificity of the judge in Quebec Civil law- Several characteristics to Quebec judges which aren’t normally seen in civilist

systems (uses CML hardware) o There’s a single judge in the Superior Court and in civil disputes for certain

issues to make sure there is competence o The judge will practice for at least 10 yearso They must be at a certain point in their career to be a judge – they do not

have judge training, as they are drawn from practice of lawo Judge is an independent jurist, and not a civil servant of the state o They need to indicate their motives in making certain decisions, and he judge

is known in the jurisprudence, has a personality o Judges have many adjudicative functions at the Superior Courts o Length of jurisprudence in Quebec Civil law – don’t see this elsewhere in

civilist systems (prefer brevity)- There’s a distance between the work of the judge in Quebec and the initial project of

Civil law – Dalphond’s central thesis: the Civil law isn’t conditioned by a specific figure of the judge. The judge is the channel for the evolution of law because he is the one which confronts progress and social changes

24Nicole Spadotto

o Dalphond says that the judge as an organ/interpretive body of the law is historic, and that judging in Quebec is a different activity because it has adapted to the current realities

o The judge is not simply an organ of application, but is a factor of the evolution of law through judgements – because the judge is in social realities

o There needs to be an equilibrium between law and the judgements, and Forray believes the equilibrium is more harmonious in Quebec than in other civilist jurisdictions

Notion of jurisprudence as a source of law - Jurisprudence is a general solution given to a question of law by courts rooted in

prudence of the law (jurisprudenential) o Jurisprudence is the consequence of a judicial activity that has a relationship

with the law (judgment makes jurisprudence) o The place of the judge amplifies the jurisprudential phenomenon, but

jurisprudence always remains linked to the law o Jurisprudence is knowing the relationship between the solution and the legal

system (the Code/CCQ)- The force of jurisprudence

o Jurisprudence is a relationship between the solution and the legal system/system of the Code. Jurisprudence is the dialogue and translation between the rule and the solution

a. Civil law jurisprudence isn’t like Common law jurisprudence – in Common law, you need to know what the judge said to know the law; in Civil law, you need to know the Code

b. In Civil law, the judge will justify the interpretation of the rule, and his judgement becomes authority

o It’s not a source of law? a. No. It’s a form of law, but it’s not a source. b. It’s a solution using specific law in a specific circumstance. The

judgement is positive and normative, so it is a product of law c. A judgment from the Court of Appeal or Supreme Court is more vast,

as a normative judgement that is very important o It’s not an authority?

a. Jurisprudence is a “maniere d’être” of the law – it’s the law in a certain form to help formalize the law

With repetition and dispersion, the law becomes more concretely formed

b. Jurisprudence is a modality of existence of the law. It’s a concrete way of being for the rules AND it’s evidence of interpretation of the law, because jurisprudence takes the form of legal interpretation (fabricates a sense and a sign of the law)

- Conclusion: jurisprudence is a determinate/form of the law as it is.

Judges – and the importance of judicial intervention - To understand where the Civil law is today, we need to understand where the

judgement fits in the tradition - Civil law is the relationship between the rule and its interpretation, and

thus between generality and particularity (judges will apply the general rule to the particular situation)

o What is specific is not the importance of the judge, but the relationship between the decision and the rule (yet, it is the judge doing this – cannot have this without the judge, and the judge intervenes to communicate the rule)

25Nicole Spadotto

- In the civil law project, the role of the judge is transformed from the production of law (like Common law) to the enforcement body/organ

o There’s a need for insistence on interpretation (judge fulfils this) - The judges intervention is seen as an accident, because if the civilist utopia really

worked we wouldn’t normally need to resort to judicial intervention - The Civil law has a permanent relationship with legislative activity (as the

legislature will produce the rule) and judicial activity (enforce/interpret the law). Judgments have a relationship with the “loi.” This relationship is essential to understand to understand the place of judgements:

o Common law :a. Judgment is the way to make the rule

o Civil law : two important points for the making of rulesa. Juridical personality of the judge seen in their judgments

The judge has a personality in judgements (which is not part of the more technical continental European Civil law) – judges are identified by name in Quebec

b. Insistence on the rule creates a paradox – the more we care about the rules, the more we care about judge’s decisions (but rules are meant to be paramount)

This is why we care development of reasons (motifs) and the importance of judgements

From the instance rules are created, they create problems which are critiqued and regulated by judges to make laws more precise and clear

Civil law has a different manner of organizing judgements, but harmony between the rule and the decision is central

Without jurisprudence, there’s no law (because the decision is an application of the norms and articulates it, and gives the law effect)

The initial idea of the Code was that it would be the most effective, as it had few words to establish a lot of clear and precise content – as a result, rules are often very brief and almost always call for interpretation

SCC judgments are always a question of interpreting the Code – the court will look at the intent of the legislature when making a judgement (Forray has the impression that the question is asked from a political point of view – interpretation has an immense body to draw from with lots of volume, because when the Code is codified, it is necessarily condensed)

The reasoning is a link of exposition and treatment of the problem – it intimately connects the rule and the case

Questioning the act of judging- Evolution of facts, morals, interpretation of rules is a done by the role of the judge –

it is he or she that is in charge of legal evolution. The interpretation and form of the law drives social evolution

o Forray thus believes that the real face of the evolution of law is the judge

Access to justice ** Pay attention to the link between access to justice and access to the courts. The problem of access to justice implies dependence on the courts – this moves us away from the civilist conception of law. It also creates a reduction in judicial activities, and without judges we may not be able to harmonize the law.

26Nicole Spadotto

- Questioning whether this model – the balance between the production of rules and administration of rules by judges – function in our contemporary world? There are some reasons to think that it doesn’t function…

- 1) Problem of access to justice o Real problem of access to justice is the problem of access to the court

- 2) Access to justice in terms of substantive law o Substantive law can be difficult to understand, which bars access to justice o To gain access to judges, you need to have understanding of substantive law o This is where lawyers and clinics come in

- 3) Giving/delivering society over to jurists (livre la société aux juristes)o Forray believes that the omnipresence of jurists in our society is a sign of

social disequilibrium o Forray says that we build a world of rules with all its problems, but in reality

we’re constructing a world of jurists/lawyers – and we subordinate the population to jurists/lawyers

** The problem of access to law is fundamental. We should beware of the reduction of law to rights. The CCP invites us to use the courts, but immediately implicitly acknowledges the impossibility of property ameliorating access to justice by inviting us to use alternative means (ie, ADR). We should keep the civilian ideal in mind, which is to privilege the existence of the Code as an instrument in limiting the need to have access to courts and access to justice.

The project of Civil law – and what the problem of access to justice says about it- The whole idea of access to justice is a sign that Civil law is defective, because Civil

law as functions as a system of governance for individuals is in the Code- Civil law is a project of society and not only a sphere of activity – law is a superior

form of general obligations and a social constitution - Harmony is meant to enter the life of individuals because of the Civil Code (person,

property, and realization of rights)- The project of the Civil law was to have a legal system that intervenes completely on

an individual, but subtly (we only become aware of the law when it fails – when it’s working, we don’t feel that we’re being governed)

- Foucault’s view on modernity : the art of not being too governed (links to liberty)o This view links with the Civil Code, which has the same sentiment o The success of law is its rationality – if you understand what it says, there’s

not a problem in contemporary society o This means that 1) the return of law has happened (see re-emergence of law

in several fields); and 2) one wonders whether we need to regulate society through law (because perhaps the law is a regulatory system like any other). The law may just be the concretization of economic rationality, so we wonder we really need the law at all

Dalphond, “Le style civiliste et le juge: Le juge Québécois ne serait-il pas le prototype du juge civiliste de l’avenir?”

- In organized societies, the rule of law is for the function of assuring general social order (norm of obligatory conduct)

- In democracies, to appreciate the force of the rule of law, we need the intervention of courts - Is there such a thing as a civilist style of justice? Do Quebecois judges depart from it?

Brief History- In the Middle Ages, Justinian codified Roman law in 529. At the end of the 12th century, Domat

divided civil law and public law and regrouped matters of private law into a logical plan - The French Revolution made the adoption of new rules in private law applicable to all of France- In 1790, to consecrate the rules of private law, a Civil Code was ordered – a Civil Code was

adopted in 1804 after Napoleon’s efforts

27Nicole Spadotto

- The civilist style is easy to distinguish: find the rule of law that’s applicable in Codes adopted by legislatures, as opposed to common law countries where the source of the law resides in court’s decisions

- The fundamental characteristic of civil jurisdictions is when a society chooses to express rules of private law in a civil code. In this case, what are the consequences that result for a judge? What is the importance of jurisprudence?

Does a society’s adherence to civil law have consequences for the judge’s role?France Approach

- The first society which was equipped with a civil code, revolutionary France, conceived of a system where judges, constituted in Parliaments, interpreted regional customs and adopted true rules of law applicable to all – the revolutionary parliaments established a clear separation between the legislature the judiciary

- The Parliament instructed judges to interpret laws in abstracto (they refused that jurisprudence would be a source of law)

- In the legal system conceived by the revolutionaries, the office of the civil judge is a sort of syllogism, with concrete application of a general law to a particular affair, with a conclusion which results in the principles of law enunciated in the civil code

- In adopting a civil code with general principles, Bonaparte and other writers were conscious that concrete application of the enunciated rules in the code may be difficult in certain situations, and recognized that judges needed a certain latitude (practical necessity). If the legislature didn’t agree in the interpretation of a rule of law (that the judges put forth), they could appeal to a Court of Cassation attached to the National Assembly – to make precise their intention

- This legislative referral was abolished in 1837, which gave jurisprudence the opportunity to be a new and true source of law in France

Quebec Approach - In Quebec, the French approach was retained in 1866 with the adoption of the CCBC, inspired

largely by the Napoleonic Code – the capacity and obligation of judges to interpret the rule of law was recognized in CCBC 11 and CCBC 12. The 1001 reform reflected that the CCQ didn’t seem to derogate from this approach.

- In a civilist system, a judge is not on principle to create rules of law: his role is limited to applying what was adopted by the legislator. The application at the same time is not generally conceived as purely mechanical – the judge is allowed to interpret dispositions to apply them to the affair at hand (certain creator role, but limited in principle to the case at hand)

- The Civil Code is an important institution in society, and the fruit of a complex reflection, and they don’t evolve when society is changing – we thus need judge to supplement by creating, and contributing in effect to the formation of law

- The situation in Quebec resembles that in France – with time, the Civil Code becomes more and more obsolete in certain aspects, and the civilist judge is invited more and more to create (though this “creation” role is limited from the perspective of common law precedent system still)

- Finally, if the legislature adopts a disposition which is a philosophical principle more than it’s a precise rule – in this case, the judge isn’t only to apply the rule, but also to define the rule of law (the role of a judge like a creator of legal norms is recognized in this delegation) - This is the case notably for the obligation of parties to execute good faith in their obligations (CCQ 1375), and for all persons to respect the rules of conduct imposed on them in certain circumstances (CCQ 1457)

- In sum, the role of the judge conceived by the Civil Code in Quebec is the same manner that France doesn’t want mechanical application of the rules of law put forth by the legislature

Does the adhesion of a society to the civilist style necessitate a particular judicial organization? - In many civil jurisdictions, throughout Europe, we find a judicial organization inspired by the

French model. Firstly, we note the presence of career judges – must go to specialized school to accede to the bench (access is highly selective); all have the same schooling and practical experience. Secondly, the system of promotions ensures that remuneration and the importance of judge’s functions increase in measure as the judge climbs the ladder – candidates are chosen based on parodical evaluations. Thirdly, even if parties don’t take action with the result of a

28Nicole Spadottoprivate dispute, the state’s general counsel (ie, Attorney General) can appeal it if they believe it’s against the interests of justice/law. Fourthly, the style of the decision claims to hold syllogism: exposition of litigation or facts, a direct style, motivation for which article in the code, and disposition/conclusion). Fifth, in courts of big instance, the function is collegial where dissidence isn’t permitted – the application of a rule is thus anonymous. Sixthly, decisions are written, and they’re an expression of excellence of the work of a judge. Finally, French judges aren’t invested in the fullness of judicial power (it’s more about the function). In sum, the archetype of the civil judicial organization is bureaucratic, corporatist, collegial, and anonymous – it’s built like an administrative structure of big dismemberments of the state

- Quebec is unique: the judicial organization is modelled after the Britannic system. It’s worth noting the principle of the unique judge in the Superior Court and civil chamber of the Court of Quebec. Judges are nominated federally or provincially – they have between 15 and 25 years to practice in this way, in many domains. There’s no evaluation for promotion – the system doesn’t offer a great possibility for promotion. While Quebec judges must explain in concise ways and the motive of their decision, a style of writing isn’t imposed on them. The superior courts of Quebec (ie, Superior Court, CoA, SCC) exercise many adjudicative functions in all domains of law (public, private, penal) – judges in Quebec courts thus don’t only specialize in civil law. Judicial organizations tends to accentuates the importance of the judge’s personality (diverse experience and origin, for example)

- Canadian constitution separates powers and independence of judicial power (interpreted in favour of judicial power, contrary to the French revolution). Not only does the Canadian constitution protect the independence of the judiciary, but it also confers judges the faculty to define what constitutes institutional and individual components, as well as the limits of the judicial power in relationship to the executive and legislative powers

- All this underlines that the organization of the judiciary in Canada is a strong sentiment that the judge doesn’t function as the state, or a bureaucrat, but only that they are the guardians of the rule of law (including Charter), invested with powers that aren’t limited only to regulating private conflicts between citizens

Are Quebecois judges not really civilist judges because of the different characteristics in the judicial structure?

- Adhering to the traditional French structure isn’t necessary to qualify a judge as a civilist – the French model of judicial organization isn’t a consequence only of adopting the Civil Code, but is the fruit of particular historical circumstance that didn’t exist in Quebec. The French organization of the judiciary isn’t what all civilist jurisdictions look like

Does a society’s adherence to the civil law style preclude jurisprudence as a source of law? - Quebec jurisprudence is largely diffused and accessible, and is used widely by pleaders and jurists

who are giving their opinions, and by professors of law. At the same time, the Civil Code is not being progressively supplanted by jurisprudence as the first institution of Quebec law

- The importance of jurisprudence can be seen in the form of redaction – judgement style are different in Quebec and France: to illustrate this point, in France, judgements are anonymous with a collegial character, and there are divergent opinions in judgement that we know of. The hierarchical structure of the system permits a certain unity of jurisprudence. In Quebec, the personality of the judge is accentuated

- The situation in Quebec conforms more to the spirit of the civilist legislature, wherein the role of the judge is to apply the rule to the case in particular

- Also of note is that civilist systems are being exposed to concepts in the common law (author welcomes decision of Canadian gov’t to interpret laws while recognizing the distinct character of the civil law system of law in Quebec). In sum, Quebec judges experience influence of common law, and have adopted measures to protect the civilist style – European colleagues can be inspired by this experience

Conclusion - The role of a civilist judge isn’t only to mechanically apply the rules of law adopted by the

29Nicole Spadottolegislature, but also to bring a big dose of creativity in necessary interpretation of the rule. This means jurisprudence is important, even more than doctrine

- Wants to underline that Quebecois judges because of Britannic origin and Canadian judicial structure, developed a manner of rendering justice in civil affairs with a personality and characteristic of the Anglo-American tradition. Also, Quebec judges evolved in a system exposed to issues of common law, and they’re obligated to guard civil law. Concludes that maybe Quebec civil law judges are the prototype of civilists of the future

Derrida, “Force de loi” (extraits) – general rules vs. particular cases - A just or unjust decision can never be assured by a rule - How can we reconcile the act of justice, which must always look at unique situations and thus is

singular based on the case, with the rule and imperative of justice which necessarily has a general form?

- In the end, justice always addresses singularities, despite prestation to universality – we thus must always question the origins, foundations, and limits of what we believe justice to be

- This responsibility to constantly question the source of what we believe to be justice comes before the responsibility to the rules which regulates our behaviour and decisions

MacDonald and Brierly, “Quebec Civil Law” (supplementary reading) - Decided cases (jurisprudence) is considered only secondary (or interpretive) sources – it’s a

authority that contributes to the elaboration of the law, but unlike legislation and custom are not imperative for judges

- Part of it is custom – a rule that lower courts ought to follow previous decisions of higher courts is a procedural customary rule developed and followed by judges in practice

- Normative status of jurisprudence has been a controversial question in Quebec Civil law, because it raises the question of whether Quebec is a mixed jurisdiction

- Judicial decisions have both an official origin and a permanent and obvious formulations – they’re very accessible to the legal community

- Until recently in France and in the European Civil law, decided cases weren’t considered a true source of law – this view has been increasingly contested

- In Quebec, judicial methodology and organization of courts is derived from the Common law, which means the decisions of courts have a vocation in Quebec which exceeds the role they are traditionally ascribed

- Quebec judgements are primarily exemplifications and justifications of the application of a rule rather than fact-specific reformulations of the general law (there is still comingling of the rule and the reason for the rule, which is a CML tendency)

- A judgement that formulates a customary norm has higher normative weight because it renders the legal rule accessible (it’s more than just an exemplification of the norm, and actually has the function as the first official expression of the legal rule). When a judgement interprets a legislative or codal text, its normative force is substantially reduced

- A principle of judicial precedent in Quebec has always existed, even in relation to the Civil Code (because stare decisis applies even to codal interpretation). This practice, however, doesn’t resemble the Common law in the sense that the criterion of authority is sometimes seen as an end to the analysis rather than as an opening to further development

c. Doctrine and Jurists** Why is it a question that doctrine is a source of law? Because it’s a descriptive text that speaks about the prescriptive law. It’s a commentary, interpretation, description of the law. Doctrine merits particular attention because it’s the body of knowing the Civil law. It links to the science of the Civil law, because doctrine is an activity of knowing, so it nourishes the science of the law. We are looking at the place of doctrine in the construction of the system, and by extension the place of jurists in constructing the system. Doctrine instructs our proper knowing of the Civil law, but it is difficult to say the influence of juridical text.

30Nicole Spadotto

Doctrine – Habitual Conception Juridical Vocabulary – Henri Capitant

- Doctrine is an opinion commonly professed by those who teach law or those who, even without teaching, write on the law

- All legal works- And all authors of legal works

Link between doctrine and jurisprudence- There is a presence of doctrine generally in the fabrication of law - In the hierarchy, the loi is the primary source and the doctrine is a necessary

supplement

Doctrine and jurists – instances of formalization Forray: since the founding moment of Roman law and since the invention of this form, what we call the law is always two things which are difficult to name:

- 1) The imperativeo Prescriptive: the force of laws, what is obligatory (ie, the Code)o Judgments are prescriptive because judges have the power to say the law

- 2) The interpretation/explanation o Descriptive: not the law, but explains what the law is (specific contemporary

form that is an intellectual capacity to explain the law) o Doctrine is not imperative, but indicative; it’s not prescriptive, but

descriptive o Doctrine proposes a solution and proposes an argumentation of what the

juridical system is to doo Even texts which say that the law should be a certain way are not legally

prescriptive in nature o Forray, in his own writing, says that doctrinal activity has a transformative

role in legal training

Shaping the Law- Doctrine is a legal activity that doesn’t form legal norms, but rather produces forms

of law (it has a certain influence on the determination of the law)- This form is in harmony with current Codes and laws – a text is a form, and this form

is a form of primarily knowing the law. This knowing of the law produces a certain harmony within the system of law itself

- The argumentation of doctrine must take the form of a decision – in this way, it facilitates the judge’s decision-making task

- Doctrine doesn’t just indicate thoughts – it also prepares judges to make their decisions on cases (ie, memos are important for the mise-en-forme of the law)

- Necessity of questioning an argument (doctrine) a. Understanding the influence of doctrine

Doctrine as a source of law poses a problem, because it’s not a statute – is it an authority? A source? An opinion?

Need to understand the relationship between Civil law and a supposed original text (positive law), and the descriptive text

b. The production of a form has an impact on the world Doctrine exposes a different normative experience – that the

text is always a form is a consequence of writing in a positivist system

** Civil law is a legal system. In clarifying the relationship between the “original” text and the text that refers to it, we must keep in mind that the normative legal activity necessarily passes in the Civil law through any text (to facilitate the system). Knowing the Civil law is

31Nicole Spadottoto know 1) its contents; and 2) to know its form, structure, and functioning (see through doctrine)

Doctrine as descriptive – with potential prescriptive results- The intent of doctrine is descriptive, because all doctrine can do is describe the law

(doctrine is ultimately descriptive because its intent is to be descriptive) - However, the fact of writing is transformative as we transform our legal knowledge

into a new doctrinal text- The result can be prescriptive, because doctrine introduce solutions that can be

integrated into law as it is taken up by legislatures (and thus have prescriptive effects)

Thus, we have three forms of Civil law: 1) the law (the authority); 2) jurisprudence (the interpretation); and 3) doctrine (the principles)

- Doctrine fabricates jurisprudence. And jurisprudence fabricates doctrine. It’s very symbiotic

- Jurisprudence yields doctrine, as legal scholars will look at the judicial activities and describe them (they produce analysis of the law and case law, and are mandated to do so by their function of teaching the law)

- Doctrine is responsible for building juridical corpus, because doctrine is used, studied, and argued by the judge. Doctrine is used this way less because of its influence and more because of the fact of its own proper discourse/speech. The doctrine fabricates the jurisprudence because it affirms that it does so. This is circular reasoning, but it’s the best reasoning we have. It also makes doctrine quite influential

Forray, “La responsibilité du fait doctrinal”What is doctrine?

- An opinion, knowledge, a source, an authority, a way to study the law, a community, or a notion - Doctrine is a speech which can be conceived as a fact generating responsibility

What is doctrine? A fact? A discourse? A responsibility?

A Discourse- On one hand, we have the imperative expression of law, which has an intrinsic power. This is

embedded in the law, which is the exercise of power. On the other hand, we have the indicative expression of the law characterized by authority, which is concretized in the practice of jurists, which proceeds from the exercise of knowledge.

- The doctrinal discourse is drawn within this dual structure as an element of expression indicative of the law. It’s a scholarly activity

- There is no legislation without the speech that clarifies the interpretation - Codification is the most developed attempt to establish the entire legal form in a unit, and marks

the triumph of legal positivity - Adhémar Esmein talks about the rupture between doctrine and jurisprudence. The meaning of this

rupture: judicial activity is the law in movement/living, compared to an aged/static Code. The judicial activity develops with the passage of humans (change in culture), and is thus chaotic and does not appear in the world as an ordered whole. It is therefore necessary to extract from judicial activity the principles and order of the solutions. In short, doctrine must do with jurisprudence what doctrine has done with the Code for centuries. Judges say the law; scientists say the prudence.

- Position. historical study shows the presence of a discourse which is indicative of the law (a discourse produced by jurists themselves). It allows us to understand the way in which this discourse has always worked profoundly on a the legal aspect; alongside and sometimes on the margins of rule of law, doctrine supplements the existence of law by ensuring their deployment in a world of intelligibility. The doctrinal discourse is that something more that accounts for/reflects

32Nicole Spadottothe law.

A Fact- What do the producers of the doctrinal discourse do? They talk about the law. They indicate it

without pretending to create it. They're trying to represent it. More precisely, they determine what they have to say about it through writing.

- The works of doctrine are like testimonies: there are long and short, useless, decisive, routine, good and bad, naive amateurs, professional experts. It is fundamentally a question of credibility, not according to the author but according to the content. I would say generously that any source of legal information is relevant in principle (Popovici)

- The written text is a fact – we see that the text is a product of a deliberate action (the representation of law is decided, transcribed, and assumed by the author (the doctrine follows a descriptive intention). However, the author is not the master of his text, because the signification of the text is constructed independently of the intention of the author

- Each text in which lawyers represent the law is a rupture between the intended and the de facto meaning projected by the text. A distance is established between the author’s willingness to describe and the actual description. The written representation of the law leads to its floating which the author cannot avoid

- The author of the doctrine is also constrained by an order of discourse – the composition of the text obeys specific literary modalities; this confers the juridical discipline a certain autonomy and, in law, a certain discursive force

- The doctrine accomplishes continuous things which didn’t exist before it: doctrine gives form. Juridical texts, with different forms from the indention of those who wrote it, indicates the existence of an activity of formalization of law for jurists. To summarize:

o Jurists write doctrinal texts. o These texts are always, initially, the fruit of a descriptive intention of the law, which is

inspired by the proper vocation of the jurists, as shown by the continuous presence of the indicative discourse of law.

o The intention in question refers to the law as jurists understand it by means of the knowledge which qualifies them as lawyers, for various purposes.

o Descriptive texts, by the play of the writing which weaves them, produce an effect which is withdrawn from the intention of the author even though it is a consequence of it. In this, there is a doctrinal fact beyond the control of the author.

o The fact in question is the production of legal forms, that is to say of a discourse fixed by the doctrinal writing which makes the law different from what the author intended to say. The doctrine, thinking to describe the law, de facto makes a formal modification of it.

- Position. The doctrinal fact escapes those who are at its origin - just as some facts of things escape the person who made them. Here arises a question of responsibility.

A Responsibility- This involvement of jurists in the system they claim to describe has been brought to light by the

French sociologist Pierre Bourdieu. In his text "The force of law - Elements for a sociology of the legal field"

- The very form of the legal corpus, particularly its degree of formalization and standardization, undoubtedly depends very closely on the relative strength of “theoreticians” and “practitioners,” professors and judges, exegetes and experts, the power relations characteristic of a state of the field (at a given moment in a given tradition) and these people’s respective capacity to impose their vision of law and its interpretation.

- What concerns Bourdieu more specifically is the power struggles that animate the legal field: which of the actors tends to dominate the discursive production that characterizes the activity of this field?

- It is up to the jurists, at least in the so-called Romano-Germanic tradition, not to describe the existing practices or the conditions of implementation of the rules declared compliant, but to formulate the principles and rules involved in these practices in the form of a systematic body of rules, based on rational principles and intended for universal application

33Nicole Spadotto

- The doctrinal fact of formalization is a political fact. The awareness of the potentially harmful repercussions of our actions gives rise to our permanent responsibility. This creates an ethic for those who write about the law

Conclusion - If the positivism were to end, taking with it the principle of legality, what would remain of our

legal tradition? A discourse that organizes references into texts distributed to judges and legislatures. The law without the law shows an emergence of a spontaneous order of forms. This shows us that the question of the essence of the law matters little in our responsibility to make it

Bourdieu, “La force du droit: éléments pour une sociologie du champ juridique”Thesis

- Bourdieu's central claim is that the juridical field, like any social field, is organized around a body of internal protocols and assumptions, characteristic behaviors and self-sustaining values -- what we might informally term a "legal culture." The key to understanding it is to accept that this internal organization has its own incomplete but quite settled autonomy (even as it’s not completely indifferent to the larger and grander social functions of the law)

- At this point, we must consider what separates the notion of the juridical field as a social space from the notion of system

- The practical content of the law which emerges in judgment is the product of a symbolic struggle between professionals possessing unequal technical skills and social influence

- The juridical field is a social space organized around the conversion of direct conflict between directly concerned parties into juridically regulated debate between professionals acting by proxy

- Rather, we must take account of the totality of objective relations between the juridical field and the field of power and, through it, the whole social field. For example, as the power of dominated groups increases in the social field and the power of their representatives (parties or unions) grows in the political field, differentiation within the juridical field tends to increase

Definitions- Formalisme: affirms absolute autonomy of the juridical form from its relationship with a social

world. - L’instrumentalisme: law and jurisprudence are direct reflections of existing power relations (where

the interests of dominant groups are expressed – instrument of domination) - La science juridique: Law as autonomous and closed system, with its development understood in

terms of its “internal dynamic”- Bourdieu is interested in the effects of legitimisation attached to the juridical neutrality and

universality: the law conceals the power relationships that are at its core and thus are linked with mechanisms of domination and symbolic violence

What is a juridical field?- A “field” is an area of structured, socially patterned activity or “practice,” in this case disciplinarily

and professionally defined. The “field” and its “practices” have special senses in Bourdieu's usage. - They are broadly inclusive terms referring respectively to the structure and to the characteristic

activities of an entire professional world. If one wanted to understand the “field” metaphorically, its analogue would be a magnet: like a magnet, a social field exerts a force upon all those who come within its range. But those who experience these “pulls” are generally not aware of their source. Bourdieu's analysis seeks to explain this invisible but forceful influence of the field upon patterns of behavior – in this case, behavior in the legal world.

Professionals in the legal field- Crucially, in Bourdieu’s view, professionals within the legal community are constantly engaged in a

struggle with those outside of the field to gain and sustain acceptance for their conception of law’s relation to the social whole, and of the law’s internal organization

- The juridical field thus is a site of competition for the monopoly on the right to determine the law – it’s the capacity to interpret a corpus of texts which enshrine the “correct” vision of the social

34Nicole Spadottoworld

Speech-Act Theory (strain of philosophy on which Bourdieu bases his views)- Ordinarily, we think of language as describing a fact. The texts of the law are thus quintessentially

texts which produce their own affects (Bourdieu looks at the social power of the law to “do things with words”)

- Essential to this capacity of the law (reproduction, continuation, and legitimization of the law) is what Bourdieu terms the law’s “power of form” – this power is in the law’s tendency to formalize and codify everything which enters its field of vision

- Bourdieu argues that this formalization is a crucial element in the law’s ability to obtain and sustain general social consent (because it’s taken – illogically – as a sign of law’s impartiality, neutrality, and intrinsic correctness of its determinations)

- Bourdieu argues that the written formalization of legal texts and codification of legal procedures maintains and universalizes people’s tacit grant of faith in the juridical order. Thus, this contributes to the stability of the juridical field itself.

MacDonald and Brierly, “Quebec Civil Law” (supplementary reading) - Doctrine is considered to be a secondary (or interpretive) source – it is a mere “authority” that

contributes to the elaboration of the law, but in contrast to legislation and custom, are not imperative for judges

- Romanist tradition shaped role of doctrine 1) expert opinion was sought in relation to the meaning or interpretation to be placed on Roman legal texts; 2) in Justinian’s codification, an attempt was made to give the law a systematic structure that allowed commentary on the texts in search of their immanent rationality

- This second aspect of scholarly tradition led to the production of a doctrinal commentary, largely in universities, that actually helped to form legal rules (pre-Napoleonic codification)

- This scholarly tradition has continued in France and Quebec – jurists in Quebec have produced a corpus of scholarship that is without parallel elsewhere in Canada

- Not all expert opinion is of equal authority – different factors influence the value of a given commentary, including 1) reputation of the author (central factor); 2) form of legal writing; 3) place of publication; and 4) substance

- Legal scholarship is doctrine, and scholarship about law is commentary which doesn’t have the same normative force

- Doctrine attempts to discern, display, and evaluate the law. More specifically, it 1) has a puzzle-solving/explicative function; 2) provides a critical perspective on judicial decisions, legislative provisions, and customary practices; 3) it elaborates the logical and ideological infrastructure of the law, making foundational concepts manifest; 4) examines the evaluation of legal rules, and explores their projection into new circumstances

- To the extent that expert opinion does this, doctrine seems more than a commentary on the law and is actually constitutive of the law it purports to display/describe

- However, traditionally, French approach has been to deny doctrine as a source of law and to question its role as an authority – a similar view exists in Quebec (though its more tempered than the French view)

- How does expert opinion then actually contribute to the elaboration of the Civil law? Doctrinal writing serves to synthesize material not otherwise available or digestible to judges. Experts are used by courts as an authoritative interpretation of the law, and in this respect the formulations of legal rules by scholars do in fact direct the evolution of judicial interpretation and the extensions to which Codal and other legislative rules are taken

General Theory of Obligations(III) Sources of Obligations

35Nicole SpadottoObligations and its sources – Plan of the CCQ

- Two titles in Book 5: Obligationso Obligations in General

a. General rules: in Civil law, to speak of contract law is to refer directly to the contract as a source of law (so the very idea of a contractual obligation is a civilian idea)

b. In Common law, contracts are not binding o Named Contracts

a. Named contracts called so because they have a name (ie, contracts of sale, employment contracts, insurance contracts)

b. They are not contracts as sources of law, but rather are an economic transaction with more or less a specific legal regime associated with them (synonymous with an economic operation)

c. Ie, we apply the specific regime of sale and remove ourselves from the otherwise general contractual framework

d. Named contracts have 1) imperative laws (many particularities from which one cannot make derogations) and 2) supplementary laws (can make derogations in some cases)

The Notion of Obligations- “Notion” because the CCQ has no definition of obligations - Définition: “obligatio est iuris vinculum, quo necessitate adstringimur alicuius

solvendae rei, secundum nostrae civitatis iura", Corpus Iuris Civilis, Institutes, livre 13.

o Translation: “the obligation is a legal obligation, which binds us to the necessity of accomplishing something, according to the laws of our civilization”

o The obligatio is a "legal tie" (iuris vinculum) that binds us to render a performance to another person according to our laws

- Necessary presence of two parties – in bilateral contracts, always each party creates commitment to the other

o Ie, the price and the thing (which explains all notions of object and cause) - Juris vinculum – there is a link in law where one person is held by another to do or

not do something, using a prestation (ie, to pay something) - Obligation Definition : a legal relationship (creditor and debtor) by which a person is

bound towards another person by a service (allicius solvendae rae – can be paying something in the sense of performing a service), of an act or an abstentation (to do or not do something)

o Ie, “payer quelque chose” is a prestation in legal language (obligation)

** Context of a contract is synallagmatic: each party is simultaneously debtor and creditor of a certain good or service (the cause for one party is the performance of the other). As soon as we have an obligation, we have 1) debtor; 2) creditor; 3) legal link.

Elements of identification of “obligations” in the CCQ – The CCQ gives us only elements of identifying an obligation, and not strictly speaking a definition CCQ 1371: It is of the essence of an obligation that there be persons between whom it exists, a prestation which forms its object, and, in the case of an obligation arising out of a juridical act, a cause which justifies its existence.

- Prestation : positive or negative - Object : object of an obligation is to do or not do a certain thing (prestation).

o The object is the service assumed by the debtor and the obligation towards the creditor

- Cause : to be understand as cause = cause; source = origin

36Nicole Spadotto

o The cause is the objective reason for the existence of an obligation. This is the cause of the obligation/prestation

o The obligation must always have a cause – your obligation to deliver a good/service is the cause of my obligation to pay (in bilateral contracts, the cause of one party’s obligation is the other party’s performance)

a. If we didn’t have cause, there wouldn’t be contract o The justification for the obligation is that the patrimony is involved: the

question of liberty is central Legal link between two people/the presence of a debtor and a creditor creates:

- 1) A personal right (as opposed to a real right) – link between two people creating a type of obligation wherein the person/patrimony is engaged

o A patrimonial right allowing its holder, the creditor, to require a service from the other person, the debtor

- 2) An action – the faculty to ask for the enforcement/sanction of a right

Real right vs. personal rightPersonal right: you have a right of action against a person. The bond of an obligation gives rise to a creditor’s right against the debtor.

- Historically: the engagement was personal and physical (pawned ourselves), and if you violated your obligations you became a slave

- Today, the commitment is no longer on your physical person, but on your assets (it only applies to the legal person, your patrimony)

o Thus, if you violate your obligations, the alienation of the debtor's freedom can only be partial (ie, we can no longer enslave someone)

Real right: you have a right of action over property (against the whole world) – this is a right against all persons, creating an obligation

Sources of obligation- Gaius : omnis enim obligatio vel ex contractu nascitur vel ex delicto (the law of

obligations is contracts and delicts)- Digeste : Obligationes aut ex contractu nascuntur aut ex maleficio aut proprio

quodam iure ex variis causarum figuris (the law of obligations is contracts, delicts, and all that remains as a residual category)

- Pothier: contracts, quasi-contracts, delicts, quasi-delicts, law/equity (introduces distinction between law as common law and equity as an order of natural law)

- Planiol: to simplify it: sources of the obligation are la loi and the contract- The link of an obligation gives birth to a law of creditor vs. debtor (keep in mind

there can also be real rights without debtors, like civil rights and human rights)CCQ 1372: An obligation arises from a contract or from any act or fact to which the effects of an obligation are attached by law. An obligation may be pure and simple or subject to modalities.

Duty/devoir vs. obligation- Duty imposes normative behaviour that is otherwise not an obligation - Typical example: good faith- The CCQ imposes good faith – we are obligated to act in good faith even before

there is a creditor-debtor relationship

BOOK FIVE – OBLIGATIONSTITLE I – OBLIGATIONS IN GENERALCCQ 1371: It is of the essence of an obligation that there be persons between whom it exists, a prestation which forms its object, and, in the case of an obligation arising out of a juridical act, a cause which justifies its existence.

- Element of identification of the obligation – legal link between two people (creditor and debtor), personal right, and action

37Nicole Spadotto

CCQ 1372: An obligation arises from a contract or from any act or fact to which the effects of an obligation are attached by law.An obligation may be pure and simple or subject to modalities.

- Contract or “act or fact” which makes an obligation deemed by law- Contractual obligation relates to a specific matter, as its source is the agreement of wills

CCQ 1373: The object of an obligation is the prestation that the debtor is bound to render to the creditor and which consists in doing or not doing something.The debtor is bound to render a prestation that is possible and determinate or determinable and that is neither forbidden by law nor contrary to public order.

- The object is the service assumed by the debtor of the obligation towards the creditor - Cause of the obligation is objective: it’s that the cause of the obligation of one party is the

performance of the other (synallagmatic)

CCQ 1374: The prestation may relate to any property, even future property, provided that the property is determinate as to kind and determinable as to quantity.

MacDonald and Brierly, “Quebec Civil Law” (supplementary reading)- Object : Object of an obligation is the prestation that a party is obliged to give, or to do, or to not do

according to the nature of the legal operation in view- Cause : The objective reason for undertaking an obligation of the type in issue - The law of obligations is central to the regulation of the social interactions of persons: in both Civil

law and Common law, the obligation designates the duty to perform, but there’s a more extensive and technical significance in the Civil law

- In the Civil law, obligations are the juridical link between persons by virtue of which one, the creditor, can demand of the other, the debtor, some performance (prestation), or abstention

- The general theory of obligations is: the creditor has a claim and the debtor has a debt, and how such juridical positions are attained, transferred, sanctioned, proven, and extinguished

- In codal presentation on the topic, the contract predominates the plane of obligations – the general theory of obligations is articulated through the prism of contract (ideological reason is that the individual in conjunction with others was seen as the ultimate and essential source of obligations and the law itself, and thus the constitution of the state)

- Real rights : rights that are exercised directly in relation to things without the intervention of another

- Personal rights : those rights which enable the titular to claim performance of an obligation from another (perform, transfer, do something, abstain from doing) – the right so characterized is that of the creditor in relation to the debtor, the relationship of which constitutes an obligation

- Principle classification scheme set in the Code is that attaching to the source of obligations – arise from contracts, quasi-contracts, delicts, quasi-delicts, and from the operation of the law solely

a. The Contract – Special Studyi. Contractual Obligations and Duties: the duty of good

faithGood faith – source of obligations? CCQ 1375: The parties shall conduct themselves in good faith both at the time the obligation arises and at the time it is performed or extinguished.

- This is a general clause of good faith – good faith is a normative element posed by Civil law to govern the relations between parties

- The scope of duty is very broad (before, during, and after the contract), even when parties are not in a contractual relationship (bound by duty of good faith even before the legal relationship is established)

- The CCQ notes that the parties are possible parties to a relationship: the CCQ creates an obligation to inform

38Nicole Spadotto

- Even the question of whether good faith can be a source of law reveals its normative power, and generates rights in of itself (resistance of Common law because importing the duty of good faith is a strong normative force, and is deeply anti-liberal as it restricts the freedom of the parties)

- One can therefore situate good faith as a general duty, not strictly speaking of the domain of obligations. However, this general duty of good faith implies obligations

o Good faith in Civil law is a mode of governance, and as such restricts liberty o The function of good faith is general, and to police the behaviour in contracts

– there’s potential for it to be the master of the obligations (even as it may not be a source)

o Ie, Collaboration, information, renegotiation maybe (in relational contracts), abstention to profit unduly from the contract

Notion of EquityCCQ 1434: A contract validly formed binds the parties who have entered into it not only as to what they have expressed in it but also as to what is incident to it according to its nature and in conformity with usage, equity or law.

- A mode of determining effects of a contract- Equity only affects contracts, whereas good faith is more broad

Churchill Falls and Good Faith - The generality of good faith is very clear in Churchill Falls - SCC said there was no obligation to renegotiate this contract as a result of good

faith – however, the duty of good faith may pose an obligation to renegotiate in some cases (just not in this one)

- Left the door open that good faith could create obligations, including a sense of abstention

Two modes of governing parties- The relationship between the source of the obligation and the contract are consent

and economic responsibility – this creates only a partial limitation on liberty - 1) Consent – voluntariness

o The law of contract is the consent to an object – the voluntariness of engagement for an economic operation

o The voluntariness is the limit to the contract – the consent forms the limit to contractual obligations

- 2) Economic responsibility o Economic operation forms a limit to obligations – the SCC and CoA really

looked at this in Churchill Falls o Ie, contracts fundamentally are common operations, which colours the

obligation of the parties in a certain way - Example: Churchill Falls

o The relations were governed by good faith, which isn’t a limit, but rather an extension of what one must do in contract

o If there’s no obligation of good faith, there’s no fundamental legal collaboration

o Judge has the power of interpretation over a contract when it’s silent or obscure, but the notion of expanding obligations of the contract under good faith has a different result – because good faith is at the exterior of the contract

39Nicole Spadotto

Churchill Falls – important paragraphsPara 112: In the context of Book Five of the Code, in art. 1375, good faith takes the form of an objective standard of conduct: “The parties shall conduct themselves in good faith both at the time the obligation arises and at the time it is performed or extinguished.” As Lluelles and Moore note, good faith gives rise to a requirement of [translation] “ethical conduct in the performance of the contract,” of a “general attitude” or even of “a state of being” The codified concept is similar to the one that was developed by this Court to the effect that good faith is an obligation that requires parties to exercise their contractual rights in accordance with the rules of fair play and equity: Houle. Baudouin, Jobin and Vézina write that [translation] “[g]ood faith has . . . become the behavioural ethic required in contractual matters.” The form this standard takes therefore necessarily depends on the clauses and the nature of the contract at issue.

Para 113: But because good faith is a standard associated with the parties’ conduct, it cannot be used to impose obligations that are completely unrelated to their conduct. What constitutes unreasonable conduct contrary to the duty of good faith must be determined on a case - by - case basis . For example, in a situation of “hardship” that corresponds to the description of that concept set out in the Unidroit Principles, the conduct of the contracting party who benefits from the change in circumstances cannot be disregarded and must be assessed.

Para 115: The authors recognize the existence of a duty to cooperate that flows from the requirements of good faith. This duty is sometimes described as a “positive” obligation that requires a party to be proactive in accommodating the interests and legitimate expectations of his or her contracting partner, as opposed to the “negative” obligations imposed by the duty of good faith, which require a party to refrain from doing certain things that would harm the other party: Lluelles and Moore; LeBrun; Baudouin, Jobin and Vézina. The duty to cooperate means, for example, that one party must look out for the other party’s interests by acting in a reasonably conciliatory and proactive manner when receiving and performing prestations under the contract.

Para 116: That being said, a review of the case law shows that this duty to cooperate has only quite rarely led a court to find that an obligation to amend a contract applied, and that no court has yet found that an obligation to redistribute profits earned under a contract did. Although CFLCo can argue that for a party to consider only the words of the contract without taking the other party’s situation into account can become wrongful conduct, it is wrong to rely on this to argue that a refusal to renegotiate a contract or share profits is contrary to the general duty of good faith. One does not necessarily entail the other.

Churchill Falls (Labrador) Corp. v. Hydro-QuébecFacts: Churchill Falls and Hydro-Québec signed a contract in 1969. Hydro-Québec agreed to purchase over a 65 year period most of the electricity produced by the Churchill Falls plant in Labrador, whether it needed it or not. This allowed Churchill Falls to use debt financing for the construction of the plant, and Hydro-Québec to purchase electricity at a fixed price for the whole term of the contract. After the contract was signed, the electricity market changed. The purchase price set in the contract is well-below current market prices. Hydro-Québec sells excess electricity at current prices, allowing them to vastly profit. Churchill Falls is asking the courts to order a renegotiation of the contract and reallocation of benefits. Churchill Falls wants the fixed rate paid by Hydro-Québec to be replaced with a new rate to ensure the contract reflects the equilibrium of the initial agreement.

Issues: 1) Should the contract be modified to match current electricity prices and to reflect the equilibrium

reached in the initial agreement?2) Does the general duty of good faith, due to unanticipated and changing market circumstances,

warrant the renegotiation of a contract?

Judicial History:The Quebec Superior Court concluded that the intervention sought by Churchill Falls was not warranted,

40Nicole Spadotto

and the CoA dismissed Churchill Fall’s appeal.

Decision:Appeal should be dismissed with costs. No duty to renegotiate the contract.

Legal Reasoning:Gascon: Neither party is alleging defect in the formation of the contract. Thus, Churchill Falls cannot argue the contract contains abusive clauses or require the contract be interpreted in its favour (not arguing lesion). Deference: Mixed Fact and LawThe court cannot change the contents of the contract, nor require parties to renegotiate items of the contract to share benefits other than that which is in the contract. Deference must be paid to the trial judge unless there was palpable and overriding error (which there was not), because the interpretation of the contract is of mixed fact and law. Joint Venture/Relational ContractThe contract is not a joint venture (where businesses agree to become partners by investing resources and sharing profits) or relational contract (rules for close cooperation, and emphasizes parties relationship and ability to cooperate and agree). Though the contract is long-term and interdependent, it doesn’t indicate that the contract is relational. Relational contracts provide for economic coordination as opposed to setting out a series of defined prestations. Churchill Fall’s proposed definition of the relational contract as a long-term contract requiring a high degree of trust and cooperation, this doesn’t prove that there was a relational element justifying heightened duties of good faith on the parties. The joint venture characterization conflicts with the words of the contract and conflicts with the apparent intent of the parties when they entered the contract (very much look to the wording of the contract to determine the parties’ intent at the time of drafting). The parties did not seem to jointly assume responsibility for the project – they rather created specific prestation’s. Their specific roles in cooperation were predefined into what each party was responsible for at each part of the project. Implied clauseThere are no implied clauses in the contract that impose on Hydro-Québec a duty to cooperate and renegotiate the prices. An implied duty per CCQ 1434 is in the nature of the contract if the duty is consistent with the general scheme of the contract and if the contract’s coherency may require such a duty (ie, if it needs to fill a gap, not merely to enhance the contract). In this case, there’s no gap requiring this duty. The prestation’s are clearly identifiable: Hydro-Québec obtains electricity while Churchill Falls gets the agreed-upon price for it. Doctrine of UnforeseeabilityDoctrine of unforeseeability also doesn’t serve as a basis for forcing Hydro-Québec to renegotiate the contract. Some civil law jurisdictions recognize this doctrine where parties can be required to renegotiate the contract is performance is excessively onerous for one of them due to unforeseen circumstances. Unforeseeability cannot be relied on when it’s clear that the disadvantaged party accepted the risk that these changes would occur – and it only applies where the new situation makes the contract less beneficial for a party and not more beneficial for the other (ie, it’s applied in very narrow circumstances). This doctrine doesn’t exist in Québec civil law right now, and developments of this doctrine must take into account that the legislature’s choice to not turn this doctrine into a universal rule. Additionally, the parties intentionally allocated the risk of electricity price fluctuations to Hydro-Québec. The contract specifically allocated risks and benefits; Hydro-Québec agreed to assume the risks associated with the project so the plant could be financed (and agreed to buy all excess electricity). This allowed Churchill Falls the possibility of being relatively well-protected against risk of lower returns. This meant that Hydro-Québec would bear any loss or receive any profits from fluctuations in electricity princes. Good Faith and EquityThe principles of good faith and equity don’t pose a duty to renegotiate the contract. Good faith in the CCQ shows the legislature wanted to temper bindingness and autonomy of the will of parties on contracting. Good faith allows broad, flexible power to create law and a basis for courts to intervene and impose on contracting parties obligations per contractual fairness and protect equilibrium of the contract – but it cannot be used to violate that equilibrium and impose new bargain on the parties. Churchill Falls is seeking to use concepts of good faith and equity in a way that goes beyond limits of unforeseeability

41Nicole Spadotto

doctrine, even as Quebec legislature has refused to incorporate that doctrine. If unforeseeability has been rejected, a protection analogous to it should not become a rule in the civil law (would be to extend good faith principles too far). Good faith cannot be expanded to penalize a party whose conduct hasn’t been unreasonable, or to renegotiate contracts in all circumstances. The duty to cooperate is important, but this doesn’t mean one’s own interests must be sacrificed. Good faith is policing behaviour. The contract doesn’t say anything explicitly or implicitly that profits and losses should be shared, because the risks were assumed by Hydro-Québec in exchange for any profits it might obtain. Thus, there was no intention in the contract to share profits and losses fairly. Equity also cannot be relied upon, because it’s effect would be to bring unforeseeability or lesion into Québec law in every case. This conflicts with the legislatures intent. CCQ 1434 can sometimes serve as a basis for courts to intervene in order to remedy unfair situations, but this isn’t one such unfair situation: there’s no inequality or vulnerability in the relationship. Both parties agreed to the contract, were experienced, and negotiated clauses. They knew what they were doing when they bound themselves. To use equity here would be to argue that fairness requires negotiation whenever parties experience a change – this isn’t the legislatures intent. Equity is not so malleable that it can be detached from the common intent of the parties.

Dissent: Rowe: The contract is relational in nature and both parties are subject to a duty of cooperation, which Hydro-Québec breached. Characterizes the contract to find the true nature of the agreement/intention of the parties and impose it on the parties. This is a question of law, so reviewable on the standard of correctness. Relational contracts are often when parties have obligations to perform on a continuing basis. Undefined obligations, duration of contract, and creation of ongoing economic relationship are indictors of a relational contract. Here, this is a long-term relationship established by contract – with parties committed to offering each other assistance during the duration of the contract, and parties contemplated need for consultation and revision. A relational contract has attached to it certain implied obligations which are necessary complements to the contract and reflect the presumed intent of the parties. The implied obligation is warranted where a reasonable person in the same circumstances sees an important and intrinsic connection between the implied term and nature of the contract. Good faith and equity guide defining the scope and content of implied obligations. This includes the implied duty to cooperate, and maximizing advantages of the contract for each party. If the parties must work together to achieve the object of the contract for a long time, the relational element of the contract imposes higher duties of good faith. The courts cannot modify contracts, but they can enforce what appears equitable (remedy imperfections of a contract and re-establish equilibrium where division of burdens and benefits don’t align with contract’s intended scheme). Here, because of relational nature and how it informs good faith and equity, the parties had a duty to cooperate in establishing a mechanism for the allocation of extra profits.

Ratio: “The general duty of good faith serves as a basis for courts to intervene and to impose on contracting parties obligations based on a notion of contractual fairness. But while good faith can avoid rigidly interpreting words of contracts, it also serves to maximize the meaningful effect of a contract and of the prestation’s that are the object of the contract.” To understand the scope of this duty of good faith, we must look closely at the obligations that the contracting parties imposed upon themselves. Good faith takes its form from the terms of the contract, so it cannot serve to undermine the contract’s paradigm.

Notes:The doctrine of unforeseeability/imprévision was debated at length during the recodification of the CCQ, and the legislature deliberately chose to ignore it. However, even if this was in the CCQ, it is not a case of unforeseeability – unforseeability assumes that the hardship leads to “ruin.” Churchill Falls argued here that good faith required renegotiation. If the obligation to renegotiate were to be accepted, due to the obligation to cooperate, then what would be the source? The contract? It could be an obligation to renegotiate in fact to the extent that the contract was relational. The argument was that what had been lost because of unforeseeability could be recovered through the duty of good faith. The SCC says that the legislature’s rejection of the doctrine of

42Nicole Spadotto

unforeseeability/imprévision cannot be ignored. There is a gap between the rejection of the unforeseeability doctrine and the possibility of finding an obligation to renegotiate based on the duty of good faith. Good faith is a general clause, so the SCC left the door open that good faith may lead to a duty to renegotiate: the obligation to cooperate could lead to an obligation to renegotiate (the SCC is not specific in which cases this would happen). So, is good faith a source of obligation (to renegotiate)?Simply, it’s an indirect source. There needs to be something else present to produce an obligation through good faith. This is the reconciliation between the general duty and the contract. Hesitation whether good faith is an interpretive tool or a rule that directly creates obligations with respect to behaviour (haven’t found a duty to renegotiate a contract yet because of good faith).

CCQ Articles – Churchill FallsCCQ 1375: The parties shall conduct themselves in good faith both at the time the obligation arises and at the time it is performed or extinguished.

- “Good faith is a standard associated with the parties’ conduct, it cannot be used to impose obligations that are completely unrelated to their conduct.” Good faith is to be determined on a case-by-case basis

- A duty to cooperate rarely leads a court to amend a contract – good faith is presumed, and a party in meeting good faith must also be able to satisfy their own interests (Churchill Falls), and good faith requires consideration of the spirit of the law or the agreement (to give the contract the broadest scope possible): but since good faith takes its form from the terms of the contract, it cannot serve to undermine the contract’s paradigm

CCQ 1431: The clauses of a contract cover only what it appears that the parties intended to include, however general the terms used.

- Per Churchill Falls, this article can only be relied upon when interpreting a contract that is ambiguous (that wasn’t the case in Churchill Falls). The contract’s clauses had a precise and identifiable meaning

CCQ 1434: A contract validly formed binds the parties who have entered into it not only as to what they have expressed in it but also as to what is incident to it according to its nature and in conformity with usage, equity or law.

- “An implied duty may, within the meaning of CCQ 1434 be incident to a contract according to the nature of the contract if the contract’s coherency seems to require such a duty and if the duty is consistent with the general scheme of the contract”

- This clause is to fill a gap in the contract – if there’s no gap in the contract, there’s no need to use this clause to fill it

ii. The particular effects of certain contractsCCQ Articles – transfer of real rights CCQ 1453: The transfer of a real right in certain and determinate property, or in several properties considered as a universality, vests the acquirer with the right upon the formation of the contract, even though the property is not delivered immediately and in operation may still remain necessary for the price to be determined. The transfer of a real right in property determined only as to kind vests the acquirer with that right as soon as he is notified that the property is certain and determinate.

- “Universality” is a reference to patrimoine d’affectation (patrimony of assets) – because everyone has one

- “Upon the formation of the contract” – the transfer of the real right at the same time as the contract formation maintains the separation between real rights and personal rights. There’s no confusion between personal rights and the transfer of ownership (principle of immediate transfer of ownership)

43Nicole Spadotto

- The contract can transfer a real right, as a sale has the automatic effect of making you the owner, but this must be distinguished from the creation of personal obligations

- There’s an interdependence between obligations: payment and delivery depends on the object so if the object disappears then it is impossible to deliver, and the correlative obligation to pay also disappears

o Real rights are automatically transferred upon consenting to the financial operation: it is instantaneous without the need of further intervention on the part of either party

o On the other hand, personal rights still require that both parties fulfill their respective obligations (ie, payment and delivery in the case of a sale of a movable). Thus, contrary to real right, the personal rights cannot be instantaneous. They do not follow the real right (ie, title transfer and delivery and payment don’t all happen simultaneously)

o Therefore, real and personal rights are not merged and thus they are separate

CCQ 1454: If a party transfers the same real right in the same movable property to different acquirers successively, the acquirer in good faith who is first given possession of the property is vested with the real right in the property, even though his title may be later in time.

- If a buyer in good faith does not know the property has already been sold and has first possession by the fact of the contract, they’re the owner

- The first buyer who did not get possession can recover the price if he already paid because his object was without cause (the object was no longer available). If he didn’t pay already, he won’t need to because he won’t get the object.

Three obligations illustrated in a contractual relationship- 1) Transfer of ownership (subdivided into two obligations)

o a. Obligation to deliver the thing is a personal right The seller has a patrimony with a credit and a debt

o b. In exchange for the obligation to pay, which is a personal right The buyer has a patrimony with a credit and a debt

- 2) Transfer of the real right over the property is a real right ** There’s a link of rights between the buyer and the seller (vinculun juris). There’s another line which represents obligations. Two obligations are formed, creating personal rights: for the buyer, the obligation is to pay. For the seller, the obligation is to deliver the thing. These obligations are reciprocal and mutually linked by the same cause.

- The right of a specific person (creditor) to exercise a power of constraint is limited by the patrimony of the other person (debtor)

** Personal right = Link between two people creating a type of obligation wherein the person/patrimony is engaged.** Real right = a right of action over property vis-à-vis the whole world (it’s an act of transferring the property).

- It may be the subject of a personal relationship. - Many obligations have the purpose of an economic transaction, which is the transfer

of a real right over an object. - This transfer is characterized by a personal relationship between the creditor and

debtor.

CCQ 1455: The transfer of a real right on immovable property may not be set up against third persons except in accordance with the rules concerning the publication of rights.

- This is because the opposability of the transfer of ownership of the immovable property depends on its publication

44Nicole SpadottoCCQ 1456: The allocation of fruits and revenues and the assumption of risks incident to property forming the object of a real right transferred by contract are principally governed by the Book on Property. The debtor of the obligation to deliver the property continues, however, to bear the risks attached to the property until it is delivered.

- The buyer is only exposed to the risks at the time of delivery of movable property- Paragraph two specifies that the risk is transferred at the end of the execution of

the obligation – this is when the property is delivered, not when the pay is transferred

- This is an important principle, because it describes the economic system, the reality of the economic world; usually, the buyer would assume the risk, but the CCQ makes an exception – the big thing to take away is that the Civil law is a system, this contributes to its structure and the logic of the system

The contract as transferring risk- A contract is an act of transferring property by the fact of the consent between two

parties- Say A is selling and B is buying a computer, and the computer explodes. Who

assumes the risk? The seller does, because he shoulders the risk in his property even though it’s not his fault.

- Transfer of the real right takes place at the time the legal transaction was consented to, but transfer of risks is delayed until the fulfillment of the obligation to deliver

- For all real rights, the transfer of the risk is the execution of the obligation

b. Civil Responsibility i. The hypothesis of the age of responsibility

** The distinction between contract and other sources of obligations is clear: the contract is a voluntary source of obligations. However, this distinction is not so clear if we consider the subject of contractual non-performance: it can be a source of (contractual) liability. Liability is a type of obligation (obligation to compensate the victim for their damage).

45Nicole SpadottoSources of obligations: contours

- The only limit to the sources of obligation in Civil law is the law itself (thus, under implemented laws, sources of obligations can be infinite)

First source of obligation: the Contract - The contract is the first source of obligation in law in an economic and social world

(CCQ 1372) - Historically, in the Medieval period, obligations were rooted in fiefs – your birth

determined your obligations, so contracts weren’t so important (but today, they’re the first source of obligations in the legal order)

- Contracts are both the first and primary source because it became the source of economic realities (ie, related to trade and economic growth, juridical mode of exchange which affected the political society)

- Significance of the contract: they’re voluntary and rooted in “consent,” which differentiates it from other sources of obligations

o There’s a specificity to the contract: its formation and its execution are singular and a source of parties’ voluntariness

Responsibility as a source of obligation- Civil responsibility is not the premiere source of obligations, as the contract is- The creation of a claim of responsibility comes with the conditions of fault,

prejudice, and causality – the foundation of responsibility/the cause of obligation in a modern world is fault (a pre-existing obligation, a rule of conduct)

- Historically, responsibility is a question of fault and failing to perform one’s duties – if the fault was the source of the damage, an obligation arise to compensate

- Liability is a system for creating compensation claims. Responsibility grows in terms of the source from which the obligations are emitted

** Thus, civil responsibility is a source of obligations, because it’s a juridical regime which creates obligations

Age of responsibility- Though contract is considered the first source of obligations, Forray wonders if the

dominant source of obligations has now become “responsibility” o Responsibility is unlimited, as one is responsible for the extent of the harm

you cause for where you have influence, whereas contracts are delineated by their parameters

o If responsibility is the primary source of our obligations, then our obligations are unlimited and not delineated/limited by the contract

o Civil responsibility is pervasive and has infiltrated contract law - Liability/civil responsibility has penetrated contract law in two ways:

o 1) Obligation of good faith – policy that guides behaviour in contracts Good faith is a principle of responsibility and dictates behaviour

within a contract Good faith as an extension of contractual obligations, as a contract

was created with the intent to perform an obligation which delineates responsibility

The question is how far does responsibility go in contract, because good faith is not legal altruism

CCQ 1375 sets out a policy of good faith from which obligations can be derived

If your conduct is contrary to good faith, it’s possible that contractual obligations will arise not from the contract itself, but of your conduct in relation to CCQ 1375

46Nicole Spadotto

CCQ 1375: The parties shall conduct themselves in good faith both at the time the obligation arises and at the time it is performed or extinguished.

o 2) Contractual responsibility Inexecution of the contract is sanctioned – failing in your contractual

obligation is reprimanded as failing in your responsibility CCQ 1458: Every person has a duty to honour his contractual

undertakings. Where he fails in this duty, he is liable for any bodily, moral or material injury he causes to the other contracting party and is bound to make reparation for the injury; neither he nor the other party may in such a case avoid the rules governing contractual liability by opting for rules that would be more favourable to them.

Non-performance of a contract is a breach of contract, but also a general duty to honour your engagements

This is the opposite of contractual logic/the inverse of the logic of contractual obligations – failing in contractual performance is failing in the contractual obligation, but the remedy for this failing is sourced in the responsibility to honour your contractual obligation

The cause of the remedy for failing in a contractual obligation is not the same as the cause to fulfil the contract

By not doing what you said you would, you have to pay for the prejudice. Why? Because if you can’t realize the operation, it causes a prejudice for which the failing party has to pay

The cause for this remedy is not the contract; the cause is the responsibility and you’re responsible for compensating for more than just the unfulfilled cause of the contract (ie, may have to make material reparations, moral reparations, etc.)

The possibility for reparations is potentially endless if the harm extends beyond the cause of the contract

This transforms the risk of human activity into a debt In Common law, the contract is considered an exchange of promises +

an economic operation (so non-performance = liability) ** In short, according to Forray, perhaps the logic of responsibility takes precedence over contractual logic, which is the historical first and primary source of obligations.

Two possibilities to determine the role of responsibility in contract (read CCQ 1458 alongside CCQ 1590)

- 1) In the event of non-performance of the contract, my action aims to obtain the performance of the contract (procure the equivalent of the performance of the contract in money)

- 2) Compensation for damages – this is a liability claim following the failure to fulfil the obligation claim (the responsibility which arises from the failure to fulfil the contract)

o CCQ 1458: Every person has a duty to honour his contractual undertakings. Where he fails in this duty, he is liable for any bodily, moral or material injury he causes to the other contracting party and is bound to make reparation for the injury; neither he nor the other party may in such a case avoid the rules governing contractual liability by opting for rules that would be more favourable to them.

Treats the breach of contract as a fault giving rise to damages, which shows how civil responsibility has infiltrated into the law of contract – damages are for moral, material, or bodily harm which can go beyond paying just for the breach itself

47Nicole Spadotto

Reparation: predictable damages to which the other party could have expected following the execution of the contract. The contractual obligation is the obligation to perform the contract, and liability to compensate the victim for non-performance turns responsibility into an obligation

Contractual responsibility modifies the function of contractual damages (the function being the right to contractual performance) because it involves the concept of fault/damage suffered. Therefore the damages are there to compensate for a prejudice suffered, and not only a contractual non-performance. Thus, the cause is different: cause of the claim is no longer the contract but the contractual breach. This is capable of explaining contractual responsibility – law of contract are modified by the penetration of the law of responsibility

CCQ 1590: gives the options of compensation building off of CCQ 1458

o CCQ 1590: An obligation confers on the creditor the right to demand that the obligation be performed in full, properly and without delay.Where the debtor fails to perform his obligation without justification on his part and he is in default, the creditor may, without prejudice to his right to the performance of the obligation in whole or in part by equivalence,(1) force specific performance of the obligation;(2) obtain, in the case of a contractual obligation, the resolution or resiliation of the contract or the reduction of his own correlative obligation;(3) take any other measure provided by law to enforce his right to the performance of the obligation.

Here, performance of the obligation by equivalence is interest damages

This is the execution, which is the regime of obligations and not the source – but need to understand this to understand the source, because CCQ 1590 is the remedy (creation of interest damages is a principle of CCQ 1458)

** When we read CCQ 1590 in line with CCQ 1458, we see that responsibility has penetrated the law of obligations/K.

Evolution of liability and risk- Khoury writes that new risks characterized by uncertainty have not changed the law

of liability, but has changed specific laws (ie, employment law, agro-food insurance). The evolution shows that the risk itself is uncertain

- There’s an evolution in the foundations of civil responsibility, as the true foundation is the fault, not the risk – but the risk is determinate of the fault and is always present

- 1) First stage of evolution: There’s an emergence of risk, and when the risk is realized damage is caused

- 2) Second stage of evolution: Risk is changing responsibility, and a legislative system is emerging to counter the risk (ie, collective insurance)

o We see this in the medical field, as risk becomes a question of technology (etc.) and is thus characterized by uncertainty

o The point of this evolution is that the risks are uncertain, so it makes it difficult to identify them and their place. Damage is the realization of these uncertain risks

- 3) Third stage of evolution: the simple fact of navigating contemporary conditions is dangerous, so we need precaution

o We know there’s a possibility of risk, but we don’t know what they are or that they will be fulfilled

48Nicole Spadotto

o In medicine, there’s secondary medical effects – there’s risks which create risks and these are not considerations (a problem, because it comes up in the medical field)

o There’s thus been the invention of a principle which is juridically in dispute – the principle of precaution

o Responsibility is the system that is the foundation of repairing the risk** Thus, because of the evolution and because of the logic of the contract being infused with responsibility, responsibility has taken a bigger role in legal obligations, and is situated as a source of obligations

Khoury, “A new revolution for the law of responsibility? Biomedical risk governance and the compensation of its victims”Summary

- Biomedical innovation, particularly in pharmacology and medicine, forces the reconsideration of several fundamental principles of the law of civil liability.

- The uncertainty often affecting the determination of the risks that these innovations pose for human health jeopardizes the capacity of the law of civil liability to compensate its victims and to sanction the behaviours at the source of these risks.

- This reality has forced the law to re-examine its role in the governance of medical and pharmaceutical activities and in providing adequate support to victims of biomedical developments.

- A discourse has emerged that pleads for the transformation of private law to allow it-to better contribute to risk prevention.

- The failings of private law in assisting victims of biomedical risk have also led to the gradual transfer of their compensation to public law

- This text studies the influence of precautionary and regulatory objectives on the development and transformation of the law of civil liability in its application to biomedical innovations.

- It also focuses on the increasing role the State plays in the compensation of injury flowing from the realization of biomedical risks. The exploration of these two tendencies reveals the extent of the contribution of scientific developments in the transformation of the law.

Introduction- The relationship between law and science is usually viewed as the law regulating scientific

developments, imposing limits on the ways in which their development must be conferred. Yet, it’s often the advances in science that force the law to move

- Scientific and technological innovation, particularly in pharmacology and medicine, forces the law to question its functions and its capacity to achieve those functions – which can sometimes lead to a transformation of its basic structure and its philosophical foundations

Source of scientific uncertainty pose legal challenges (uncertainty has two consequences in civil lability law)

- 1) It makes it difficult to identify reasonable productions to prevent potential (but uncertain) risks- 2) Makes it uncertain whether compensation will be paid to those who believe they are victims of

innovative development o It will be difficult to argue that failure to take precautions against an indeterminate risk

constitutes wrongful conduct, but it will also be difficult to establish that the harm suffered actually results from that indeterminate risk (the innovation)

o This dual challenge has fuelled doctrinal, jurisprudential, and legislative movements examining the ability of law to adapt to ensure greater governance of medical and pharmaceutical services and adequate protection for victims of biomedical developments

Two Approaches- To increase the law of responsibility in the prevention and regulation of risks - To handle breaches of rights in victim’s care through compensation policies without

responsibilities The Biomedical Revolution

- The rise in massive industrialization gave birth to new risks which have high levels of complexity

49Nicole Spadottoand pose difficulties in identifying who caused them (created compensation funds to counter)

- Today, the biotechnological revolution is requiring law to respond how to process accidence – which is now one of the leading causes of death in Canada (similar conditions to the industrial revolution)

- Traditional models of responsibilities are ill-suited to handle these new risks and their consequences: difficult to demonstrate a fault at the beginning of the creation of risk because of factual and scientific uncertainty surrounding the identification of risks of medical innovation

- Absence of responsibility/fault, and causation will result in either no liability OR from the beginning point of the risk being realized

o Solutions: can use ideals associated with the precautionary principle to amplify the functions of the law of responsibility (this questions the ability of the rules of private law to play a strong role in biomedical risk management)

o OR can award compensation regardless of responsibility (this reacts to the failures of the law of responsibility)

The governance of biomedical risk by civil liability - The field of biomedical innovation entails an increased emphasis on the need to develop

preventative and deterrent functions of this area of extra-contractual liability law - The analysis assumes that the law of responsibility doesn’t pursue a single/predominant goal, but

is influenced by many goals – including the pursuit of social objectives like protection of public health/quality of the health system

- Can this foundation justify imposing precautionary obligations on actors involved in biomedical risk management to aim at reducing/eliminating the risk? Does it justify regulatory schemes?

- Blame-based liability has an inherently deterrent effect, which can encourage changing practices/norms, and taking precautions

Civil liability as a regulation tool- Contrasting ideas to understand whether the precautionary/prevention principle is good for

private law/civil responsibilityo Viney Kourilsky: there’s a social requirement to strengthen the prevention principle, and an

unprecedented application of instruments of prevention o Christophe Radé: takes the opposite view that the precautionary principle has the purpose

of looking at the behaviour of the actors when it’s still possible to prevent the damage but where it has not occurred. The law of civil liability presupposes that damage has been committed. In these circumstances, when damage has occurred, the reliance on precaution cannot raise civil liability

- The field of medical innovation has thus resulted in an increased emphasis on regulators liability law – jurisdictions have developed strict liability regimes for better compensation for biomedical harms

Reactive public law - The importance of the restorative function in law decreases as public law is effective as a

compensation mechanism - The victims must prove the fault and the causal link – this becomes a major concern in civil liability

scheme - Also, harm suffered by victims of biomedical innovations is often the result of systemic failures of

precaution and management of risk reduction, rather than individual and human error – this explains the growing interest in a regulatory scheme to support victims

- The idea of collective responsibility for social risk isn’t new – it’s partially rooted in the theory of risk developed in the aftermath of the industrial revolution. It makes compensation based on the notion of risk. Therefore, it becomes the responsibility of the community without needing to dwell on assessment of individual behaviour

Compensation by collectability - Compensation by collectability is based on the recognition that accidents do not result from

individual actions, but social decisions about how the whole society will live - Only France has created a compensation fund for victims of health-care related infections (in

jurisdictions we’re interested in)- These regimes are based on the acceptance of social or community responsibility for the harms

50Nicole Spadottosuffered by members of a society or community. This shared responsibility being expressed through government action. At their source is the idea that the individual is granted the fundamental right to receive a benefit because of the fact that the victim became a victim of society

- The proliferation of compensation funds without regard for liability in the field of biomedical science was not made because of a philosophical reconsideration of the compensatory functions of the civil and public law, but rather because of external factors. However, these external factors had a major effect on the transformation of the respective functions and responsibilities of these two legal fields (tort and regulatory).

Conclusion- Biomedical developments play a significant role in the evolution of the law of civil liability. In

response to biomedical risk, these two legal spheres (public law and private law) do not act in isolation. They share the roles traditionally assigned to them, collaborating to give aid through separate mechanisms (para 64)

- This gradual removal of fault as the basis for liability to improve compensation has caused greater concern for the role of civil liability law as a preventive mechanism

- There was no radical legal revolution under the pressure of scientific developments. The public law does not see a dramatic shift towards compensation, as it remains concerned about risk regulation and prevention (para 65)

- Fault vs. collective responsibility is based on the idea of social risk (para 65)- We are witnessing [...] a questioning of the inflexible allocation of roles to one or the other of the

legal sectors or, in other words, a disappearance of the rigid boundaries between private law and public law and a strict vision of what falls within each domain. (Para 65)

- When mass harms are caused by products or activities - such as asbestos, chemical production, hazardous waste, nuclear power, atomic testing, contraceptives and bio-technologies, and environmental / human disasters - the ensuing legal battles cannot be conceived of strictly private disputes, even though they do not fit neatly into the class of disputes by public law.

- The issue of biomedical risk [...] requires a difficult coordination between the compensation needs of victims, the governance objectives of health care safety and the desire to protect activities considered to have a critical social value, namely the public health system (in the Canadian case) and the health industry. (Para 65)

- Biomedical risk also calls into question the strict divisions between the moralistic, corrective, instrumentalist and distributive functions of each field of law

c. Other Sources of Obligationsi. General prestation

Other sources of obligation- Unjust enrichment - Management of the business of another- Reception of a thing not due- Ambiguous sources

o Good faith (though this is a delicate source, not clear)o Arguable that some things are sources (ie, a testament with directions)

** Prof raises the notion of the need to limit the number of sources of obligations to limit state control over the individual, because obligations = limitations on freedom

History – Roman Law- Roman text exposed contract and délit as sources of obligation; it also exposed neo-

contract and neo-délit as sources (these are obligations in the text which don’t quite fit into contract or tort)

- Indeterminate category which does not correspond to an identifiable source (residual category, but this is okay)

51Nicole Spadotto

- Obligations are a limit on your liberty and someone else’s liberty – all juridical interpretation is a theory of the consequence of the idea that obligations are a restriction on liberty

Reception of a thing not due and unjust enrichment – similarities - These are grouped together, because there’s an acquisition without a cause, or with

an unjust cause - In both cases, we’re dealing with an acquisition without cause or with an unjust

cause (thus, the cause is faulty) – therefore, there is an acquisition without a cause/source of an obligation

- Absence of cause obligates restitution/compensation – this the source of the cause of the obligation

Three conditions in which we can have payment without cause - 1) The solvent (third-party) is not a debtor (does not owe anything) - 2) Acceptor is not a creditor (the person receiving the thing isn’t the one who paid

for it) - 3) Payment was made for an action that’s a null and void deed (because it was

crainte, violence, or otherwise undue) o Error means it’s a destruction of cause (demanding restitution without cause)

Logic of obligation - The cause is the source of the obligation - This is part of the system of the Civil law – have to look at this to understand the

system (vision of being for the system)** Always keep in mind to look for the cause of any obligation: there can be no obligation with the absence of a cause

MacDonald and Brierly, “Quebec Civil Law” (supplementary reading) - Quasi contracts deal with benefits that are conferred upon parties by the acts of others, and do not

have their source in contracts- The term “quasi contract” is not entirely appropriate – it doesn’t describe the source or origin of

the obligation, but rather the appearance of its effect (ie, solved as if the parties had actually contracted and one party now has a debt)

- Intention plays an important role in quasi contracts, even though there was never any meeting of the minds

ii. Management of the business of anotherManagement of the business of another – different logic from receipt of a thing not due and unjust enrichment

- Logic of mixing yourself in/interfering with the affairs of another person - Two situations: 1) managed doesn’t know that the manager is managing his

business; 2) managed knows that the manager is managing his business, but is not in a position to influence management (ie, temporary incapacity)

Limits of creating obligations under management of the affairs of another- 1) Opportune management

o Opportunities which just arrive at the door and the person strives to fix it (ie, if a fire starts, that person is going to try to put it out, not put oil on it – therefore opportune management serves the cause)

o There’s a legal criteria of opportune management, which leads to a creation of reimbursement – ie, jurisprudence does not support management of the business of another in situations of weak opportunity

52Nicole Spadotto

o One cannot interfere in the affairs of another for an abusive reason – the “opportune” element controls the abuse (abusive mixing with the affairs of another is inopportune)

o If the interference is inopportune, see CCQ 1490: management inopportunely undertaken by a manager is binding on the principal only to the extent of his enrichment

- 2) Management only for a term and for certain developmentso For bad management, you get damages o Rules consider inexecution of management of the affairs of another, which

triggers civil responsibility and is a fault o Management of the affairs of another triggers a finality: it’s not about the

work itself, but that the work has been completed which creates the obligation

Mirabel (Ville de)- Why did he ask us to read it?

o 1) Justifies interest of analysing the (other) sources of obligation o 2) To understand practically the managing the affairs of another in the CCQ

Facts:- Katsaros’s car was stolen and turned up in Mirabel, there was a fire, and he got the

bill at the end of the fire (and the firefighters didn’t even put out the fire) - He became a debtor for this, and like a good civilist is asking where the source of

the obligation came from – asking what justifies his position as the debtor- The municipality points to a municipal regulation, but the regulation requires

certain interpretation o Strict interpretation: the bill is a bill for a certain service rendered, if those

services are solicited (it’s like a contract, a voluntary fact) Two arguments from Baudouin in the case which give a good idea of managing the business of another

- 1) Paragraph 23: “If it is assumed that the request must be made by the owner of the vehicle himself, it must logically be concluded that another person can nevertheless do so on his behalf and with his authorization. This would be the case for his representative or agent (qui per alium facit, per seipsum facere videtur: whoever asks another to act for him is responsible for what his representative does).”

o If you ask someone to help, you’re responsible for their actions- 2) Paragraph 24: “In addition, when the service is rendered for the benefit of the

person, by a third party, but this time outside his knowledge, there is then management of the business of another within the meaning of the Civil Code”

o Management of the affairs of another – mandated or spontaneous agent can engage your obligations

o Idea that the person who called the fire department acted on behalf of the guy whose car was on fire

DefinitionCCQ 1482: Management of the business of another exists where a person, the manager, spontaneously and under no obligation to act, voluntarily and opportunely undertakes to manage the business of another, the principal, without his knowledge, or with his knowledge if he was unable to appoint a mandatary or otherwise provide for it.

- Agency is quite crucial in this regime - Management of the business of another is a case of mixing yourself into the affairs

of another person in a spontaneous manner- Two indications for when someone is taking on the management:

53Nicole Spadotto

o 1) Not deliberate for the person whose affairs are being managed (without intention) (another person mixes themselves in with your affairs without you asking)

o 2) Without prior legal obligation (without source) (if another person executes an action, this becomes the source of an obligation)

Similar position as to the inexecution of a contract, it’s a mandate without voluntariness (like a special contract)

** The source of the obligation is managing the business on behalf of another, so the person who’s business was managed must reimburse the manager based on CCQ 1486

Obligation on the person who’s affairs are being managed: 1) to reimburse; and 2) to indemnify CCQ 1486: When the conditions of management of the business of another are fulfilled, even if the desired result has not been attained, the principal shall reimburse the manager for all the necessary or useful expenses he has incurred and indemnify him for any injury he has suffered by reason of his management and not through his own fault. The principal shall also fulfil any necessary or useful obligations that the manager has contracted with third persons in his name or for his benefit.

- Managing the business of another is the source of two obligations:o 1) Reimbursement/the costs (le dépens) o 2) Indemnisation: where applicable, for the damage suffered by the manager

due to undertaking the management

** Managing the business of another is a source of obligations to another party, but also creates obligations on the manager (creates the obligation of management)

Obligations of the manager: 1) to inform the managed; and 2) to continue the management CCQ 1483: The manager shall as soon as possible inform the principal of the management he has undertaken.

- Management must have been undertaken in ignorance of the managed, but then revealed

CCQ 1484: The manager is bound to continue the management undertaken until he can withdraw without risk of loss or until the principal, or his tutor or curator, or the liquidator of the succession, as the case may be, is able to provide for it.The manager is, in all other aspects of his management, subject to the general obligations of an administrator of the property of another charged with simple administration, insofar as the obligations are not incompatible, having regard to the circumstances.

- The manager has to let the other party know that he has ended the management – obligation to continue/complete the management is thus built into this assumption

** The cause of the first person’s obligation to pay the money is the cause of the obligation to inform and continue the management

Management of the business of another like a quasi-contract- Because it creates a double source of obligations for both parties who are in the

affair, and there are reciprocal and interdependent obligations between the parties - Management creates obligations on both sides of the relationship (obligation to

complete management, obligation to repay/compensate)- But it’s not a contract because it’s not voluntary on the part of the managed

MANAGEMENT OF THE BUSINESS OF ANOTHER CCQ 1482: Management of the business of another exists where a person, the manager, spontaneously and under no obligation to act, voluntarily and opportunely undertakes to manage the business of another, the principal, without his knowledge, or with his knowledge if he was unable to appoint a

54Nicole Spadotto

mandatary or otherwise provide for it.

CCQ 1483: The manager shall as soon as possible inform the principal of the management he has undertaken.

CCQ 1484: The manager is bound to continue the management undertaken until he can withdraw without risk of loss or until the principal, or his tutor or curator, or the liquidator of the succession, as the case may be, is able to provide for it.The manager is, in all other aspects of his management, subject to the general obligations of an administrator of the property of another charged with simple administration, insofar as the obligations are not incompatible, having regard to the circumstances.

CCQ 1485: The liquidator of the succession of the manager who is aware of the management is bound to do only what is necessary to avoid loss in matters already begun; he shall immediately account to the principal.

CCQ 1486: When the conditions of management of the business of another are fulfilled, even if the desired result has not been attained, the principal shall reimburse the manager for all the necessary or useful expenses he has incurred and indemnify him for any injury he has suffered by reason of his management and not through his own fault.The principal shall also fulfil any necessary or useful obligations that the manager has contracted with third persons in his name or for his benefit.

CCQ 1487: Expenses or obligations are assessed as to their necessity or usefulness at the time they were incurred or contracted by the manager.

CCQ 1488: Disbursements made by the manager with respect to an immovable belonging to the principal are treated as provided in the rules established for disbursements made by a possessor in good faith.

CCQ 1489: A manager acting in his own name is bound towards third persons with whom he contracts, without prejudice to his or their remedies against the principal.A manager acting in the name of the principal is bound towards third persons with whom he contracts only if the principal is not bound towards them.

CCQ 1490: Management inopportunely undertaken by a manager is binding on the principal only to the extent of his enrichment.

Mirabel (Ville de) c. KatsarosFacts:Not contested. During the night of the 8th or 9th of August in 1993, the defendant’s car was stolen in Montreal. He found it in flames the next day on the appellant’s territory. The firefighters intervened, but the automobile was totally lost. He didn’t know that the car was on fire until authorities notified him. Mirabel invoiced the defendant many weeks later a bill of $1232.98 for the costs of the firefighters. The defendant refused to pay the bill based on two principal motivations: 1) he wasn’t a resident of the municipality; and 2) he insisted a disadvantage because it was his vehicle that was stolen and he didn’t request the municipal service. Also, since the vehicle was totally lost, he didn’t benefit from the intervention of the firefighters.

Issues:- Can the appellant impose a tariff on a person who is not a resident of the municipality? [YES]- Is the tariff applicable when the owner of the vehicle didn’t’ request the service in question, and

the vehicle was stolen?

Judicial History:

55Nicole Spadotto

At the Court of Appeal. At the Municipal Court, Paquin J rejected Mirabel’s claim. He was of the opinion that the power to require a payment doesn’t apply in cases of theft, on the grounds that the motive of the proprietor wasn’t to request the service. Mirabel appealed this decision, saying the rules don’t make a distinction for a service that contributes vs. one that doesn’t.

Decision:Appeal granted. K must pay.

Legal Reasoning:Baudouin: a rule of the municipality says that a charge can be imposed on a person who doesn’t live in Mirabel for the intervention of a service for the protection against fires in Mirabel, or to combat fires in a vehicle, and to compensate for the costs inherent to that intervention. This rule gets its validity from the Loi sur la fiscalité municipale. There are restrictions: person need not pay if the municipal action is in the domain of public safety. However, this scheme may not be imposed for the purposes mentioned if the request is made at a time when there is imminent danger to the life/health of persons or animals; tariffs can also be imposed on non-residents of the municipality to combat fires in their vehicle. It’s okay to impose the tariff. It seems clear that one of the direct purposes of the enabling legislation is precisely to allow the tariff to be imposed on people other than residents. The defendant pled that (in the view that he was ignorant of the theft of the vehicle) and that he didn’t ask for the service in question, that by consequence he shouldn’t pay for the tariff. The judge looks to a formal and literal interpretation of the text (the decree): “if the good or service is used by the debtor, or if the debtor benefits from the activity at his request.” The Supreme Court said, “to promote the accomplishment of what appears to be the purpose of a legislative instrument, a judge may give a provision a broader meaning than it would have by taking into account only the literal meaning of the words.” The judge thus favours a literal interpretation. Even if the vehicle is completely lost, the benefit is the operation or the attempt of saving the vehicle, not that the vehicle was actually saved.

Dissent:Nuss: wants to dismiss the appeal. To determine whether K is liable, we have to determine the intention of the legislature regarding the provisions of the Act Respecting Municipal Taxation that a person who is not a resident or a taxpayer must pay a tariff for the intervention of a protection service counter to a fire in Mirabel (to prevent or combat the fire of their vehicle). The parties are right to analyze the enabling legislation set out in the Act to determine whether K has to pay. The National Assembly in the Act gave the gov’t authority to decide whether municipalities have the power to impose tariffing – the Act provides that a tariff cannot be put in place unless there’s a regulation which sets out conditions or restrictions (Mirabel did this – ie, can only tariff if the property or service is actually used by the debtor or if the debtor derives benefit as a result of his request). Thus, the debtor’s request is what triggers the allowance of a tariff. The second regulation also highlights the language of “request” – this sets another condition on tariffing. Mirabel relies on the second paragraph, which provides that if a request is made re a burning vehicle of a non-resident or non-taxpayer, the non-resident cannot invoke the imminent danger to the lives/health of persons or animals to avoid the imposition of the tariff. However, the language of “the request” is uniform throughout the paragraphs – thus, the debtor had to have requested to enable the tariff. If the legislature had the intent to impose liability on the debtor whether or not a request was made, it wouldn’t have deliberately imposed explicit conditions or restrictions. We cannot know whether it was K who called the fire department (ie, requested), and the regulation doesn’t permit tariffing on the sole criterion of providing the use of services.

Ratio: If a service is rendered for the benefit of a person without his knowledge, this is management of the business of another in the sense of the CCQ.

MacDonald and Brierly, “Quebec Civil Law” (supplementary reading) - Requirement that arises under definition of management of the affairs of another is that the

manager’s intention be to look after the business of another (ie, manager cannot mistakenly believe they are undertaking their own affairs, and the beneficiary must not intend unlawfully to

56Nicole Spadottotake value from the manager – if this happened, manager frames claim in unjustified enrichment or delict)

- Intervention of the manager cannot be known to the person whose affairs are managed, because otherwise it would be a tacit mandate

- Manager must not intervene in the business of another with an exclusively altruistic motive, because that would amount to a liberality

- Managed business can be a juridical act or a juridical fact (ie, putting out a fire or paying a debt)- When conditions are met, CCQ imposes legal obligations on the manager and the person whose

affairs have been managed – manager is obligated to continue the management until the business is completed, or until the person for whom he acts is in a condition to provide for the management himself

- In the conduct of the business, the manager has the obligations that result from an express mandate – he is bound to exercise the management in the care of a prudent administrator, and is liable civilly for failure to do so (liability can be moderated based on circumstances)

- The obligations on the persons whose affairs are “well-managed” (assumed management must have been profitable for the beneficiary) – beneficiary is bound to all contracts entered into in his or her name, and obliged to indemnity the manager for personal liability the latter has assumed, and to reimburse the manager for all necessary and useful expenses that have been made

- Beneficiary’s liability to third parties doesn’t however extend to damages arising from delicts or quasi-delicts committed by the manager

iii. Reception of a thing not due (réception indue) Reception of a thing not due (réception indue)

- Receiving a thing without due/which is not due - An acquisition without a cause – important, because no cause means that there’s no

source of an obligation - The transfer of riches without cause creates an obligation on the patrimony which

receives it - Obligation of restitution if you receive something that comes into your patrimony

without a cause - Thus, it’s a source of obligations

DefinitionCCQ 1491: A payment made in error, or merely to avoid injury to the person making it while protesting that he owes nothing, obliges the person who receives it to make restitution.However, a person who receives the payment in good faith is not obliged to make restitution where, in consequence of the payment, the person’s claim is prescribed or the person has destroyed his title or relinquished a security, saving the remedy of the person having made the payment against the true debtor.

- Payment implies a cause/debt. Payment can be performance of an obligation, not necessarily monetary payment

- Three factors which are explicit in this text:o 1) Erroro 2) Avoid a prejudice o 3) Without cause (condition of indebtedness without cause)

** Réception indue creates a reciprocal obligation of restitution. It undoes something that has been done incorrectly (like the unknitting of a scarf) – the act of receiving is the source of the obligation to return. The object of the obligation is restitution.

Typical case – payment in error- Payment given in error or without consent is the cause of the obligation. It’s the

act/fact of the reception which is the source of the obligation (the creation of

57Nicole Spadotto

prejudice with creates the obligation of payment). The payment given back is the execution of the obligation

- You mistakenly believe that you are a debtor or a creditor - To get restitution, need to establish the error – the error destroys the cause, so it’s

important to concentrate analysis on causality between the error and the undue payment

Example: Bank pays you money which is not yours. This creates a juridical obligation for you to make restitution of the money, because the payment was made in error. The error is the cause. There is no technical consent here (which creates the same obligation).

The person paying to avoid prejudice/harm - The responsibility is very precise, that if you pay because of crainte or violence – the

payment is null by crainte - Protesting is a sign of understanding that you should not be paying in this situation

(signals a lack of liberal intention/understanding that there is no cause for the payment)

** The presumption of the liberal intention explains the need for the protest (to showcase that a loss of freedom occurred here) – if there’s no protesting, the payment is assumed to be gratuitous and not undue

Undue payment not made in error- If make an undue payment (without cause) but not by error, like I made the payment

on purpose, it’s presumed to have a liberal intention (that the payment was done freely)

o Ie, I paid you some money I thought I owed you. Your assistant doesn’t know anything about the relationship, and thinks the payment is due

o It’s a fair transfer of undue value, because there’s no relationship of obligation between us

- The payment undue, because there’s a debtor without a reciprocation, but it wasn’t made in error (so this liberal intention doesn’t create an obligation to repay since it was donation)

- Absence of error + good faith = presumption that payment stems from a liberal intention (donation)

o The proof that there wasn’t a liberal intention is in the circumstances/facts to overcome the presumption (that’s why we need the protesting, to prove that it wasn’t done freely)

Exception: good faith - If the party does not know he is a debtor/creditor and paid/took money, then they

are in good faith- In this case, they do not know that the payment was undue/null- CCQ says they’re not obligated to make the entire restitution when prescription is

up or the person has destroyed title

RECEIPT OF A PAYMENT NOT DUECCQ 1491: A payment made in error, or merely to avoid injury to the person making it while protesting that he owes nothing, obliges the person who receives it to make restitution.However, a person who receives the payment in good faith is not obliged to make restitution where, in consequence of the payment, the person’s claim is prescribed or the person has destroyed his title or relinquished a security, saving the remedy of the person having made the payment against the true debtor.

CCQ 1492: Restitution of payments not due is made according to the rules for the restitution of prestations.

58Nicole Spadotto

Ville de Montréal c. Octane Stratégie inc.Facts:To prepare for the launch of its transportation plan, the city of Montreal retained Octane, a public relations firm, not long before the planned launch date in 2007. Representatives from Octane attended a meeting at City Hall with officials and political representatives from the City. At that meeting, Richard Thériault, the director of communications and administration in the office of the mayor, allegedly gave four mandates to Octane, two of which involved preparing the launch and organizing the event. To fulfill its mandate to organize the event, Octane hired Production Gilles Blais. Over the course of half a month, Octane sent Montreal various budget estimates and plans relating to the organization of the event. The final estimate forecasted fees, costs, and dismemberments totalling $123,470. Following the event, octane sent three invoices over multiple dates. The invoices were not paid. Octane filed a motion to institute proceedings. Four years later, Octane sent Thériault a formal notice to pay in the amount of $82,898.63. Octane amended its motion to institute proceedings to bring Thériault in as a defendant.

Issues:- Did the Superior Court err in law by ordering Montreal to pay Octane even though there was no

contract between Octane and the City?

Judicial History:The Superior Court granted Octane’s motion to institute proceedings and ordered the City to pay $82,898.63 plus interest and the additional indemnity under CCQ 1699. Now at the Court of Appeal.

Decision:The benefits should be returned.

Legal Reasoning:Mainville: The judge concludes that there were four mandates assigned to Octane as part of the launch of the transportation plan. These mandates relate to (1) consulting services for $ 24,997.78; (2) graphical achievement for $ 14,500.94; (3) production and printing costs for $ 12,705.42; and (4) Productions Gilles Blais' production costs and scenic and technical equipment of $82,898.63. By paying the bills related to the first three mandates and filing the list of payments with the Montreal board, the City ratified the first three contracts with Octane. For the fourth contract, all acknowledge the services provided but not one in the City formally approved the mandate for the services of Gilles Blais productions. Each municipal stakeholder believed it would be another service that would pay the bill. The judge affirms that Octane’s claim can be upheld through CCQ 1699. The purpose of CCQ 1699 is to precisely allow the restitution of benefits whenever a person is, by law, required to return to another value that it received without right or by mistake, or by virtue of an act which is subsequently annihilated retroactively. CCQ 1699 is used in the case where a legal act, such as a contract, is annihilated for failure to obtain approval. The restitution cannot be made in kind (ie, the event already happened), but rather must be done by equivalent which is the cost assumed by Octane for the services of Production Gilles Blais totalling $82,898.63. The City argues on appeal that the restitution of benefits provided by CCQ 1699 is inapplicable in the case of municipal contracts. The City argues that if it does apply, the court should use its discretion granted by the second paragraph to refuse restitution in this case. The City argues that there’s no contract between it and Octane regarding the services of Gilles Blais, which would prevent the application of CCQ 1699, since this isn’t a situation where there was a contract that was cancelled. The absence of a contract would render the principle of the return of benefits inapplicable.The non-respect of the formalities and the absence of approval do not mean, in the context of refunding the value, that no contract has intervened, but rather that the contract intervened is null since it does not respect the formalities prescribed by the law. Of course, this contract is "deemed never to have existed" as required by article 1422 CCQ. This does not preclude that "each of the parties is, in this case, obliged to return to the other the benefits it has received" as precisely prescribed in that article. Even if the court accepts the City’s contention that there was never any contract, the restitution of the benefits should still be given. In this case, it would be a reception of a thing that’s not due by the City, since Octane provided the services of Gilles Blais Productions for a future cause that has never been

59Nicole Spadotto

accomplished. This situation constitutes reception of a thing that is not due, thus giving rise to an obligation to return benefits for a cause after the payment. Thus, even if the court were to accept the City’s contention that there was an absence of a contract, Octane would be entitled to obtain the undoing of what it has provided, the provision of services of Productions Gilles Blais. Octane would then be in the situation where they agreed to provide these services by virtue of their mistaken belief that the City had contracted with her in this regard. This mistaken belief was in good faith. Restitution of benefits would be appropriate even in this case.

Ratio: - All contracts which don’t conform to the necessary conditions of its formation is presumed to be

relatively null (CCQ 1416). When a contract is deemed null, it is deemed to never have existed which means that the party is bound to restitute the other party of the prestations that it received (CCQ 1422).

- Restitution benefits can still be awarded regardless on if there was an ab inito contract between parties.

Notes: This is reception of a thing not due because the contract was deemed null and therefore the cause was non-existent. This differs from unjust enrichment because in unjust enrichment the cause exists but is not valid.

CCQ 1699. Restitution of prestations takes place where a person is bound by law to return to another person the property he has received, either without right or in error, or under a juridical act which is subsequently annulled with retroactive effect or whose obligations become impossible to perform by reason of superior force.The court may, exceptionally, refuse restitution where it would have the effect of according an undue advantage to one party, whether the debtor or the creditor, unless it considers it sufficient, in that case, to modify the scope or modalities of the restitution instead.

CCQ 1422: A contract that is null is deemed never to have existed.In such a case, each party is bound to restore to the other the prestations he has received.

CCQ 1553: Payment means not only the turning over of a sum of money in satisfaction of an obligation, but also the actual performance of whatever forms the object of the obligation.

CCQ 1554: Every payment presupposes an obligation; what has been paid where there is no obligation may be recovered.

Baudoin, Jobin, et Vézina: “In any event, the nemo auditur rule has implicitly been repealed, in our view, since the reform of the Civil Code and the adoption of the provision granting the judge a great deal of discretion with regard to the restitution of benefits: depending on the circumstances of each case, if there is immorality, the judge must now use his discretion either to order the normal restitution of benefits or, on the contrary, to refuse it, in whole or in part, or to set specific conditions. This margin of manoeuvre is essential to prevent the blocking of restitution from sometimes leading to the unjust enrichment of the party who has violated public policy. This new provision is likely to apply to a situation qualified as a nemo auditor like any other situation, and with all the flexibility that it entails....”

Carbonnier: “Restitution of a later undue payment. The situation differs from the previous one in that initially the solvent pays what he owes. His payment has a legitimate cause, whether it is a contract, a court decision or even a law or a regulatory provision. But later, this cause disappeared retroactively. By virtue of this retroactivity, the payment becomes undue and thus gives rise to repeated entitlement. The solution was chosen for cancelled contracts, even for unlawful cause,” “the action for recovery of undue payment is open to the person who claims the services he has rendered in execution of a null agreement

60Nicole Spadotto

for unlawfulness of the cause”

Jobin, et Véniza: “A person who has received a payment over which he has no right is required to return it, because otherwise he would be unjustly enriched at the expense of the solvent”

Lluelles et Moore: “Articles 1699 to 1707 cover not only the consequences of the retroactive annihilation of a legal act - such as the annulment of any contract, the termination of a bilateral contract or the revocation of a gift due to ingratitude - but also any situation where, under the law, a person must return what he has received ‘without right or by mistake’”

MacDonald and Brierly, “Quebec Civil Law” (supplementary reading) - Obligation to restore under reception of a thing not due arises when a value in any form is

transferred to another who has no entitlement to it, and the transfer is made by mistake- The obligation to restore only arises if the value received is not due – so it cannot have been

transferred pursuant to a natural, contractual, or legal obligation - Recipients are in good faith when they do not know that the thing is being received without any

entitlement - Recipients are in bad faith when they know they’re getting the thing without entitlement

iv. Unjust enrichment Unjust enrichmentCCQ 1493: A person who is enriched at the expense of another shall, to the extent of his enrichment, indemnify the other for the latter’s correlative impoverishment, if there is no justification for the enrichment or the impoverishment.

- There’s a cause, but it’s unjust or unjustifiable (unlike réception indue where there is not a cause)

- It’s quasi-contractual, because someone is profiting off the situation (they’re unjustly profiting)

- This is so large a scope that it’s almost a general clause – the enunciated conditions are subsidiary, but we use them to limit the application of unjust enrichment

- The CCQ isn’t specific about the conditions for unjust enrichment, so conditions have been developed through jurisprudence

** Restitution exists in a contract that’s deformed, missing, or incorrect – and restitution also exists in unjust enrichment (consequence of the patrimony being enriched unjustifiably)

Conditions of unjust enrichment – the unfulfillment of one of these conditions defeats the claim

- Enrichment- Impoverishment - Correlation between the enrichment and impoverishment - Absence of justification - Absence of another recourse- Absence of fraud

** Principle effect = indemnisation of the measure of impoverishment

Example- Homeowner wants to construct and immovable, and contracts with an entrepreneur - The contractor contracts with a subcontractor to do some of the work, and the

contractor does not pay the subcontractor- The unjust enrichment finds its source in the work of the subcontractor, because he

was not paid and this was without justification – the true source of the enrichment isn’t the contract, it’s the work that has been completed by the subcontractor

61Nicole Spadotto

- The enrichment of the homeowner does not come from the contract – it comes from outside the contract

- No other recourse is likely to succeed – there’s no contract between the homeowner and the subcontractor, which opens the door to unjust enrichment

** Viger says that if enrichment is based on the work done, it’s unjustified (hence the quasi-contractual nature, because it has its source in fact)

Enrichment – one party is enriched (ie, homeowner is enriched)

Impoverishment – one party is impoverished (ie, subcontractor is impoverished)

Correlation between enrichment and impoverishment – the cause of the enrichment must be the impoverishment (ie, the work the subcontractor did enriched the homeowner)

Absence of justificationCCQ 1494: Enrichment or impoverishment is justified where it results from the performance of an obligation, from the failure of the person impoverished to exercise a right of which he may avail himself or could have availed himself against the person enriched, or from an act performed by the person impoverished for his personal and exclusive interest or at his own risk and peril, or with a consistent liberal intention.

- Article does not specify that the obligation must be due to a co-contractor (only mentions the enriched/impoverished relationship)

- Related to asking about the cause and the source of the enrichment at the expense of the impoverishment

- In absence of justification, then cannot get the enrichment because there’s an absence of judicial cause

- Relations between people can be a reason for justification/cause (ie, if people want to get married it can be a justification for splitting property)

- Two points of view:o 1) Causality: what is the cause/emergence of the source

Must ask first whether non-payment was due to poorly executed work (would be a justification, and is a question of juridical causality) – otherwise, the source of the enrichment has to be the impoverishment to find causality

The logic of unjust enrichment is the transfer of value which has led to enrichment that is not based on legal grounds

The juridical cause is the source of obligations – if this doesn’t exist, no obligation

Factually, there is always a justification for unjust enrichment, but there is not always a juridical justification – we need strict judicial causality as the source of obligation

Example: love of conjointes in fact is not a legal justification o 2) Juridical justification

The cause is the juridical justification (ie, the work someone did for you, contractual justification)

This is a limited situation (hard to prove since often the source of the enrichment is not juridical)

Example: if a homeowner contracts with a contractor, and the contractor contracts with a subcontractor, and the work the subcontractor did enriches the homeowner but the subcontractor wasn’t paid by the contractor – this is an absence of justification (because there’s an enrichment, an impoverishment, and a correlation between the two through the transit between the intermediary contractor). The recourse under unjust enrichment is against the homeowner, because that’s who benefitted.


In order to see if there is a juridical justification for the enrichment, you must identify the REAL source of the enrichment (beyond what seems to be the cause/reason)Ie, if there’s a subcontractor doing work for you, but that has a contract with a contractor, and you are enriched because of the subcontractor’s work, the cause for the enrichment is the work that was done by the subcontractor, not the contract. Thus, no juridical justification in this case because the cause doesn’t rely on the contract

62Nicole Spadotto

Absence of another recourse – if you can get recourse through contract (against the person who was enriched), then there’s no action for unjust enrichment

- Another recourse is always going to be possible, so why unjust enrichment? Ie, the subcontractor could go through the contract with the contractor to get recourse from the contractor

o BUT there is not another recourse between the homeowner and the subcontractor, so if the subcontractor wants to recover from the homeowner, the only option he has is unjust enrichment

Absence of fraud – a limit imposed by the legislature, not a general clause

Super important thing: look at the aims of the action- Unjust enrichment is a parallel system/alternative mechanism of compensation - Action of unjust enrichment is below a contract, because it doesn’t have the benefits

of the contract (it does not replace the contractual actions) - It’s the LAST recourse – it’s an alternative system of justice - It’s an action of indemnisation against impoverishment, and the Code says this

** Unjust enrichment is a complementary source, and very rare to go through this channel. Unjust enrichment is rejected in contracts in a chain, unless no other recourse is available. The subcontractor wouldn’t have an action in unjust enrichment against the homeowner unless this was the only option he had.

B(M) c. L(L)- Unjust enrichment does exist in the context of conjoints in fact

Judge: “I agree with the respondent when she states that two presumptions can arise from a long-term common-law relationship, namely, the correlation between enrichment and impoverishment and the absence of grounds for enrichment”

- Unjust enrichment is an instrument that permits the compensation of the economic disequilibrium that is very serious in the rupture of a conjoint in fact relationship

- Two presumptions relative to unjust enrichment: o 1) Correlation between enrichment and impoverishment

In a union in fact, there’s a presumption that there’s a correlation – the cause of the enrichment of the man is presumed to be the impoverishment of the woman

o 2) The cause doesn’t have a justification The reason for the correlation doesn’t justify it: the raison d’être of

the enrichment is normal, but this is not a justification because there is an absence of a motive for the enrichment – thus, it’s unjustified

“I am of the opinion that the objective of an unjustified enrichment action must not be to rebalance the assets or share the assets of each person accumulated during their vie commune, but only to compensate one party for a contribution, in goods or services, which has enabled the other to find himself in a position superior to that which would have been his had it not been for the common life, in short to enrich him”

- Unjust enrichment does not play a role in balancing the sharing of the patrimony (it’s not an instrument of liquidation of the matrimonial relationship/union in fact)

- The idea of unjust enrichment is to indemnize the impoverishment – the enriched person is to be equally off to how they were before it happened (so they pay the lesser of the two of impoverishment or enrichment)

UNJUST ENRICHMENTCCQ 1493: A person who is enriched at the expense of another shall, to the extent of his enrichment, indemnify the other for the latter’s correlative impoverishment, if there is no justification for the enrichment or the impoverishment.

63Nicole Spadotto

CCQ 1494: Enrichment or impoverishment is justified where it results from the performance of an obligation, from the failure of the person impoverished to exercise a right of which he may avail himself or could have availed himself against the person enriched, or from an act performed by the person impoverished for his personal and exclusive interest or at his own risk and peril, or with a consistent liberal intention.

- Juridical justification exists where: 1) contract or other obligation the impoverished must perform; 2) the impoverished person not bringing the complaint forward; 3) the impoverished person performing the act for his own personal and exclusive interest; 4) the impoverished person performing the act at his own risk and peril; 5) the impoverished person performing with a constant liberal intention through the work (ie, gratuitous)

- In these cases, cannot recover for unjust enrichment, because there is a juridical justification for the enrichment

CCQ 1495: The indemnity is due only if the enrichment continues to exist on the day of the demand.Both the enrichment and the impoverishment are assessed on the day of the demand; however, where the circumstances indicate the bad faith of the person enriched, the enrichment may be assessed as at the time he benefited therefrom.

CCQ 1496: Where the person enriched disposes of his enrichment gratuitously, with no intention of defrauding the person impoverished, the action of the person impoverished may be taken against the third person beneficiary if the latter could have known of the impoverishment.

B(M) c. L(L)Facts:The respondent was an ex-conjointe in fact with the appellant. The appellant is demanding a reformulation of the Cour supérieure’s judgment which condemned them to pay the respondent (the ex-conjointe in fact) $50,000 in compensation for unjust enrichment which was born from their 14 consecutive year co-habitation. The parties met in 1983, when the respondent was 23 years old and was employed as a server in a restaurant. The appellant was a car salesman and was 30 years old – he had just separated from his second spouse. The parties moved into an apartment in Laval. The rent was paid entirely by the appellant. The respondent said that they were going to use the capital to start an enterprise which sold and bought used tricks. The enterprise was ended after buying two trucks and not making a significant profit off them. They had a child and the appellant spent $74,000 for a new residence, and invited the respondent to live there with their child. She accepted and the parties resumed their vie commune. She bought furniture at a value of $3000. She returned to part-time work at a restaurant, and also helped around the house by cutting the trees, participating in the construction of a patio, renovations of bathrooms and kitchen, etc. The appellant worked long hours, and generated good income. The defendant contracted cancer which forced her inactive for 6 months. She began working two years later. The hours were long, but the income was good. The appellant wanted to construct a garage, and the same year the defendant borrowed $6000 for renovations. The appellant declared that this loan affirmed that he didn’t pay for renovations. She also borrowed $5000 to pay for the installation of a pool. The appellant argues that a verbal agreement was reached between the parties that the respondent would pay for the pool in exchange for a car. She later borrowed $2000 and $3500 for different familial needs. The appellant got sick and was hospitalized. The respondent left the residence, and the parties definitively separated definitively a year later. She took the furniture at the moment of rupture in the relationship, and kept the Volkswagen. In December of that year, the defendant launched an action where she alleged the appellant was enriched by these expenses (he kept the house, which increased in value). In defense, the appellant said the participation of the defendant was limited to washing, renovation, and education for their child. He said that the defendant benefitted from a comfortable life without needing to pay for electricity, heating, costs related to the car, partially groceries, trips, renovations, etc. He did admit that the pool was paid for by his ex-conjointe, and offered her $6000 in that regard.

64Nicole Spadotto

Issues:- Was the man unjustly enriched in the course of his vie commune with his ex-conjointe in fact?

Judicial History:On appeal from a 2002 decision by the Superior Court. The SC found that the appellant had to pay the respondent $50,000 for unjust enrichment.

Decision: Finds unjust enrichment, but reduces it from $50,000 to $25,000.

Legal Reasoning:The relationship between the two parties was in a space of a union that functions similarly to a married couple. During this union, the prove shows that the defendant assumed essentially the domestic jobs and was primarily responsible for the education of their child. When the appellant worked, she took on organization of the family needs and residents, and played an important role in the renovations of the residence. During the vie commune, the annual revenues of the appellant were in the realm of $55,000, and hers were around $11,000. By the end of the union, her revenues were about $25,000 per year. They also didn’t sign a document relative to their union – they didn’t have a joint account or acquire goods in co-property. The Quebec Legislature has chosen not to impose any judicial frameworks onto a union in fact which has ended, and which has all the characteristics of a matrimonial union. This includes even in cases where a child was born from this union. In the silence of the legislature and in the absence of a contract, it’s up to the court to look at this. Considering the commentary from the SCC on the importance of respecting the choice of couples who decide not to marry and who do not have a contract regarding the economic aspects of the vie commune, the judge thinks its inadvisable for the court to introduce after the end of a vie commune, to consider the partnership quasi-patrimonial. The SCC found four conditions for unjust enrichment without cause: 1) enrichment; 2) impoverishment; 3) a correlation between the enrichment and the impoverishment; and 4) an absence of justification. In the new CCQ, the Quebec legislature codified the principles in CCQ 1493-1496. Baudouin and Jobin identified six conditions which would require a recourse for unjust enrichment: 1) an enrichment; 2) an impoverishment; 3) a correlation between the enrichment and impoverishment; 4) absence of justification; 5) absence of fraud in the law; 6) an absence of another recourse. The two first presumptions are fulfilled because the union in fact was of a long duration, and there was a correlation between the enrichment and impoverishment and an absence of motives for the enrichment. The judge isn’t adopting an approach that’s liberal – namely that enrichment corresponds to the increase in the value of the appellant's assets between the beginning of the vie commune and the end of it. Indeed, this would be akin to creating a kind of partnership of acquisitions for quasi-marital unions. This is not for the courts to decide, but for the legislator.In consequence, the judge is of the opinion that the objective of an action in unjust enrichment doesn’t give rise to an re-equilibrium in dividing the patrimonies of all that was accumulated during the vie commune, but to compensate a party for their goods or services which permitted the other to find a superior position which wouldn’t have been possible without the vie commune – thus, briefly, enrichment. Here, she had done that by educating the child and ameliorating the property and fulfilling the needs of the family – all without remuneration – while the man concentrated on his career which permitted him to generate income. During a period of 5 years, it’s reasonable to conclude that the domestic work of the woman benefited her partner and their child. She had also borrowed a lot of money, totaling $16,500 by the first judge. The judge calculates that based on this money, the appellant benefitted the residence by 13% ($6000). Based on this and her domestic work and supervisions of the renovations, he finds $25,000 reasonable compensation.

Ratio:- There are six conditions which would require a recourse for unjust enrichment: 1) an enrichment;

2) an impoverishment; 3) a correlation between the enrichment and impoverishment; 4) absence of justification; 5) absence of fraud in the law; 6) an absence of another recourse.

65Nicole Spadotto

- The objective of an action in unjust enrichment in a vie commune is to compensate a party for their goods or services which permitted the other to find a superior position which wouldn’t have been possible without the vie commune.

- In a union in fact, there’s a presumption that there’s a correlation between enrichment and impoverishment – the cause of the enrichment of the man is presumed to be the impoverishment of the woman

- Unjust enrichment does not play a role in balancing the sharing of the patrimony (it’s not an instrument of liquidation of the matrimonial relationship/union in fact)

Notes: Jobin et Vézina in “Les Obligations, 7e edition”: “with respect to unjust enrichment between common-law spouses, the case law now accepts, on the basis of the long duration of the relationship, a presumption of the correlation between enrichment and impoverishment and a second presumption that there is no justification for enrichment in this context”

MacDonald and Brierly, “Quebec Civil Law” (supplementary reading)- In Compagnie Immobilière Viger c. Lauréat Giguère, the SCC enunciated five criteria for the

application of unjust enrichment - 1) Defendant must have been enriched by the activity of the plaintiff: monetary valuation and still

exists at the moment the suit is brought - 2) Corresponding impoverishment in the plaintiff: may be a direct diminution of the plaintiff’s

patrimony, or in the form of a failure to make a gain (capable of monetary valuation) - 3) Causal connection between impoverishment and enrichment - 4) No justification (or legal cause) for the enrichment – enrichment must not be justifiable as

resulting from the performance of an onerous obligation (legal, natural, or contractual) or as a gift - 5) Must not be or have been any other legal basis for claims of plaintiff (requirement that plaintiff

not be able to exercise any other recourse) – exact scope of this condition is uncertain, because it appears that plaintiffs may raise a claim in unjustified enrichment as an alternative ground in an ordinary action upon a contract

- NOTE: sixth condition of no fraud has since been added- If these six conditions can be established, the defendant will be obliged to restore value to the

plaintiff - Two substantive principles distinguish the action from the quasi-contractual repayment of a thing

not due: 1) enrichment and impoverishment are to be determined at the date of the trial (if no enrichment or impoverishment remains, there is no action); 2) defendant is only obliged to return the lesser of the enrichment that he or she retains, or the impoverishment that the plaintiff still suffers

Baudouin et Jobin, “Les obligations, 7e edition”ABSENCE OF JUSTIFICATION

- Endorse saying “absence of justification” instead of absence of cause (given the ambiguity of the word cause)

- The action de in rem verso was created only to compensate for situations where enrichment is not regular, i.e. not provided for, sanctioned, or imposed by law – enrichment must therefore be without legal reason, ie, without legal or conventional justification. Thus, the action will be dismissed in the situations indicated in Article CCQ 1494, having regard to the existence of a justification for enrichment or impoverishment: performance of an obligation, act done in his personal and exclusive interest or at his own risk, act done with a constant liberal intention, and finally act for which the author could or could have exercised another remedy against the enriched person (also contract, as contracts are implemented because a person is to benefit economically and thus justly)

- CCQ 1494 is in fact an attempt of codification of jurisprudence and doctrine- Enrichment that has its source in a legal, natural, or in a contract or will is not an unjustified

enrichment – because we can precisely find the reason for it in a law, in a juridical act, or in a moral or natural order consecrated by a natural obligation (ie, execution of a contract of sale, for

66Nicole Spadottoexample, permits that the co-contractors enrich themselves save for cases of lesion). Enrichment thus is found as a justification for the exercise of contractual liberty and autonomy of wills.

- When acts are done in the personal and exclusive interest of a person, the person cannot claim the enrichment of others

- The act performed by the impoverished at his own risk and peril is also a valid justification for his impoverishment: the rule of interpretation which gives the expression “at your own risk and peril” has a difference sense from the expression “in your personal and exclusive interests.” The former in the sense of CCQ 1494 raises serious difficulties to the application of cases where there’s a strong social or moral connotation (ie conjoints de fait)

- Impoverishment which results in an act completed with a liberal intention (or gratuitous contracts) do not invoke unjustified enrichment

- If one voluntarily gives their service, without hope of return, they may not be entitled to an action of de in rem verso – ie, when services are rendered between parents, the familial relation that exists between parties presumes a gratuitous fact

- However, for conjoints de fait, jurisprudence has re-evaluated – on the contrary, some of these decisions have admitted that the person acting under an implicit promise of reward, or with a reasonable expectation of one day receiving certain benefits in return (thus, right to an action de in rem verso)

v. Synthesizing elements Order of the sources of obligations (privilege it this way)

- 1) Contract- 2) Delict- 3) Quasi-contract

Reception of a thing not due vs. unjust enrichment - Reception of a thing not due is an action permitting the undoing of a prestation

without cause or with error o Gives rise to restitution (the restoration of something lost to its proper

owner)- Unjust enrichment is an action to be compensated for loss suffered as a result of the

enrichment o Gives rise to compensation (pay for the enrichment)

- In reality, reception of that which is undue is also unjustified (they’re the same type of problem), so look to the principles to differentiate them

- Forray wants to emphasize that unjust enrichment and reception of a thing not due are complimentary sources of obligations and quasi-contract

(IV) Regime of Obligationsa. The modalities of obligations

Archetype of obligations – obligations are born in the contract- Modality is very often a contractual obligation – contract is the center of the

constitution of modalities of obligations - Contracts are to unroll economic operations through time

Modality of obligations- The way of being (« manière d’être ») of an obligation, except it has force: it’s the

manner of an obligation executed (the effect, efficaciousness of the obligation) - As indicated by the plan of the Civil Code, the modality of obligations is the

beginning of the regime of obligations (and simple modalities is the beginning of this)

- Effect of the modality: the juridical act is the contract with modalities as certain restrictions to modify the efficacity of the obligation

67Nicole Spadotto

- Two simple modalities of obligations: condition (conditional obligation) and the term (obligation in term)

Regime of obligations- The rules which dictate the obligations, and the relationship with obligations - Source: contract, délit, quasi-contract (ie, what’s the juridical cause for me needing

to pay? Pay is a prestation, an obligation to do a certain thing. The cause is that I’m engaged in a relationship/link of obligations which has at its source the contract, civil responsibility, or quasi-contract)

i. Simple modalities: the term and the condition Simple modalities

- Enounced in the first section of Chapter 5 of Book 5 of the CCQ - This is the very beginning of the obligation regime: the rules that govern the

relationship of obligations regardless of the source - Signification: the modality supposes the presence of a pure and simple obligation

(pure and simple obligation is that the debtor to a contract is committed to perform the obligation immediately and for always). This is the normal situation (we start from the conception the modality is pure and simple)

- In the majority of economic transactions, however the obligation is not immediately realized (affected by modality): the contract is accompanied by certain restrictions called terms and conditions which modify the effectiveness of the obligation

- A modality is a way of being, so the modality of the obligation is the way in which the obligation must be performed (any modality consists in the designation of a future event envisaged by the parties and on the achievement of which depends on the achievement of the act)

- Effectiveness of the obligation may be affected by a future event designated by the parties

- There are two ways of affecting an obligation: o 1) To suspend an obligation – relationship between the effect of the juridical

act to the designated event, where the juridical act produces an event. If the thing doesn’t happen, then no obligation is realized (could be for a short period or for forever)

Postponement of the effects of the legal act until the arrival of the designated event

o 2) Extinction of an obligation: the effects of the act is a precursor to when the event happens

Effect of the act ends when the designated event occurs (extinctive or resolutory mode)

Condition and Term- Condition: suspends the birth of a link of law/effect of the obligation to an event that

is future and uncertain (event designated by the parties either implicitly or explicitly). Marked by a temporality (the time of the condition is the conditional element)

o Ie, parties have engaged together in a contract, and this is a clause that says if the event doesn’t happen, then the engagement doesn’t happen (birth of the link of law is suspended till this uncertain event)

Ie, I engage in a sale of real estate as a buyer on the condition that I obtain a bank loan for a certain amount (I undertake to buy this property if I obtain a bank loan for this amount). The obligation to pay the price of the immovable is suspended until the event does or does not occur

The birth of the legal relationship is subject to a future and uncertain event

68Nicole Spadotto

Ie, I am a store owner and a supplier offers a new product for sale, and there’s a contract to sell the products. There’s a clause in the contract that states that if I have not sold X products of your brand, the business between us will terminate

The obligation is conditional because the cancellation of the commitment is suspended by a future event

o In suspensive state, the obligations existence is subordinate to the realization of a hypothetical event (there’s a temporality to the condition)

o Best characterized by English word “would” (as in, “I would do something if this uncertain event is realized”)

- Term: the execution of the obligation depends on an event that’s future and certain (something that will actually happen). The certainty of the term is subjective from the point of view of the parties. Probably the most common modality of obligations

o Certitude is the date of realization – a certain term is when you know in advance the date of realization of the event. An uncertain term is when you know the event will happen, but you don’t know when (ie, death): in these cases, the expiry date of the term is uncertain

We distinguish the certain term (ie, the first of the month) from the uncertain term (ie, death) by our knowledge of the expiry date of the said term

o Best characterized by English word “will” (as in, “I will do something when this certain event is realized”)

o Note also that the CCQ speaks of an extinctive term, which isn’t really a modality of obligation/effect of obligation as its simply a designation of term (it’s a mode of extinction of the obligation – so not a way of being). Lluelles, Moore, Beaudoin, Jobin, and Vézina seem to agree that the extinctive term is not a modality of the obligation itself, but a cause of the extinction of the obligations. Forray agrees

o For example, you have a telephone contract with Videotron for two years. You must either renew or change the operator in two years (term is a date calculated by the contract). After two years, the contract is resolved (ie, can terminate).

This is when a term occurs – a period calculated at the beginning of the contract. The contract ceases to have effect on this date.

** Extinctive as a term is simply the extinction of an obligation, while modality is the way of being of an obligation. This is the difference between extinctive and exigibility (due date, to be charged or levied)

Distinguishing between term and condition- The term relies on a certain future event; the condition relies on an uncertain future

event: the certainty of the realization of the event/the realization of the future event being inevitable is the key difference

- Problem with distinguishing between a term and condition: what’s an uncertain event? Answer: the certitude is subjective, as from the point of view of the party (use the density of the link of obligation between the parties as the measure)

- What about an adhesion contract? We have to examine the point of views of the parties to ascertain the density of the obligation (very subjective point of view)

- Example: “when the contractor is paid, the subcontractor will get paid” = term (because this is a certain event from the point of view of the parties)

- Example: “I am borrowing money from you, and I will pay you back when I can” – term (because you say when, it indicates certainty and thus a term. If you said if, then it’s uncertain and a condition)

- Attention! The condition/term as a modality is not to be confused with the conditions and terms in a contract.

69Nicole Spadotto

o In CML, terms and conditions in contracts are the contents of contracts, which is different from a modality of obligation – must respect the division of the systems, and take care not to confuse the two (they’re not the same!)

o In CML, conditions are a state of doing which are essential for the formation of the contract; terms are stipulations within the contract. In CVL, term and condition are obligations in a certain manner

o Often the term and condition as terms of the obligation are held in the part of the contract called “terms and conditions.” Do not confuse the actual factual conditions for the contract between the parties with the terms or conditions of the obligation. One way to avoid the confusion is to apply legal concepts rigorously and ask whether the clauses stipulate a way of being of the obligation.

Condition CCQ 1497: An obligation is conditional where it is made to depend upon a future and uncertain event, either by suspending it until the event occurs or is certain not to occur, or by making its extinction dependent on whether or not the event occurs.

- The text begins by mentioning the conditional obligation: the condition is in itself the designation of a future and uncertain event. The obligation is subordinate to the arrival of the thing that will make it extinguished

- Juridical characteristics of the event:o Future event - CCQ 1498: An obligation is not conditional if it or its

extinction depends on an event that, unknown to the parties, had already occurred at the time that the debtor obligated himself conditionally.

The future nature of the event that constitutes the condition simply means that if the event has already happened, it’s not a condition (even if parties didn’t know that the event already passed – not sufficient to indicate the event is uncertain in the sense the parties do not know whether or not it has occurred; an event that’s already occurred, with or without the knowledge of the parties, cannot constitute a condition)

Note that where the parties stipulate an event has already occurred, the obligation does exist. However, this obligation is not conditional, but rather pure and simple. The debtor is committed from the moment the contract is formed, and the condition clause is simply removed from the contract

o Uncertain event - CCQ 1500: An obligation that depends upon a condition that is at the sole discretion of the debtor is null; however, if the condition consists in doing or not doing something, the obligation is valid, even where the act is at the discretion of the debtor. (This is to regulate that an event can be dependent on the voluntariness of the parties)

Uncertainty refers to the fact the event may not occur. The parties speculate whether or not the event will take place. This means the event is factually uncertain – there’s the idea that the event is not in the power of the parties (if the parties have power over the occurrence of the event, it’s not a condition).

Here, if it’s completely in one of the parties’ discretion, the obligation is null (the aim is to avoid completely discretionary control by the other party)

For example, “I’ll reimburse you if I want to” (this is pure discretion/power as to whether the event from which an obligation arises will come to pass or not, so the obligation here is null). This places the dependence of an event at the existence of my own will. There is not enough of a commitment on my part to see a real bond of obligation – it’s totally within

70Nicole Spadotto

my power whether the event happens, so the obligation is null and void

The idea is that if the event that is to happen is in my own power, then the other party is put within my power. It’s this type of discretionary control over the other party in the relationship of the obligation that we week to avoid

Second part of the text is an exception to this principle: if the condition consists of not doing something or doing something, the obligation is valid (this is very similar to unilateral contracts in the Common law; ie, “if you find my cat, I’ll compensate you”)

For example, “I’ll pay you $10,000 if you repaint the entirety of my house during a week” – here, there’s an equilibrium of power because there’s a voluntariness of the person doing the painting to do the work or not

These cases allow the obligation to be valid because there is a balance of powers, and therefore there is a will to make the relationship of obligations exist. This becomes the will of the parties to decide whether or not to comply. The creditor’s obligation to pay is suspended and conditional on the debtor’s choice about whether or not to engage in the work and thus be paid

o Times of occurrence (the period of time in which the event is to occur or not) – at which moment do you know if the condition is realized? The period of time in which the event must happen or not is uncertain (CCQ 1501, 1502). This affects the character of the obligation

CCQ 1501: If no time has been fixed for fulfillment of a condition, the condition may be fulfilled at any time; the condition fails, however, if it becomes certain that it will not be fulfilled.

If not time has been fixed during which the uncertain event is likely to occur, there’s a situation of suspension of the obligation will continue indefinitely

Where the condition is likely to be realized, we are in a situation called “pendante conditionne”

o Ie, I make the purchase of your home dependent on the sale of my own home. (If I manage to sell my home at a certain price, I commit myself to buy yours)

There’s a perpetual limit, but the condition is defeated if it’s certain that the event will never form/occur

o Ie (failure hypothesis), if the condition is you’ll get married to your fiancé, and then your fiancé leaves you, it becomes certain the condition won’t be fulfilled (we have not defined in time the period in which the thing cannot happen, but we are certain now this event will not occur)

CCQ 1502: Where an obligation is dependent on the condition that an event will not occur within a given time, the condition is considered fulfilled once the time has elapsed without the event having occurred, and also when, before the time has elapsed, it becomes certain that the event will not occur. / Where no time has been fixed, the condition is not considered fulfilled until it becomes certain that the event will not occur.

The production or non-production of the event was framed within a period of time. This is the inverse situation of CCQ 1501

71Nicole Spadotto

First paragraph of CCQ 1502: We’re interested in the production of the event or not – if time passes without the event happening, then there is an obligation (if the parties agreed to this)

o Ie, “I undertake to buy your house at X price, unless I get married within the year. If I haven’t married within the year, I have to buy your house”

o Ie, “I undertake to buy your house at X price, unless I get married within the year. If I break up with my fiancée one day before the end of the year, I have to buy your house”

Second paragraph of CCQ 1502: when no time has been fixed, when it’s certain the event will not happen, the condition is fulfilled

o Ie, “I undertake to buy your home unless I have a child. For women, there will come a time in my life where I will become certain I will not have children, because I will be physically incapable.” The condition is then considered fulfilled

** Both CCQ 1501 and 1502 operate within the framework of time

Conditions of validity of the stipulation itself CCQ 1499: A condition upon which an obligation depends is one that is possible and neither unlawful nor contrary to public order; otherwise, it is null and renders null the obligation that depends upon it.

- Event that is impossible renders the obligation null o A typically impossible condition would be an unrealistic interest rate: for

example, I undertake to buy your home if I succeed in securing, within a week, a $100,000 mortgage at 0.1% interest. However, given the current state of the market, this condition is impossible

- Second condition posed by the text: can’t have an condition that’s against the law (ie, if a person sells alcohol outside of the SAQ, which is against the law)

o The condition may be invalid by virtue of its unlawfulness (ie, opening a liquor business that’s not the SAQ)

- Third condition posed by the text: can’t have an obligation against public policy o Hinges on a question of lawfulness and of public morals – if against public

morals, the condition is null. Invalid due to it’s probity (ie, using sexual favours or definitive engagement of the body as a condition)

- What happens when there’s an impossible condition, a condition prohibited by law, or a condition against public order?

o The object of the contract is null as well – it’s not simply the contract that’s null, but also the obligation upon which it depends (the invalidity of the condition contaminates the act itself)

Regime/effects of conditional obligations- A strange state of obligations, because these obligations are suspended to the

production of an event. Future and uncertain events suspends the birth of the obligation (suspensive obligation), but there’s still an entitlement/relationship between the parties.

o CCQ 1503: A conditional obligation becomes absolute when the debtor whose obligation is subject to the condition prevents it from being fulfilled

A debtor who is bound by a suspensive obligation (a quasi-obligated debtor) is subject to certain duties – in particular, the duty to not make the condition fail, unless as a result of this action he becomes bound by the obligation itself


Exigible debt: if the conditional event doesn’t arrive, the debt isn’t exigible, and the debtor need not pay

72Nicole Spadotto

This is something the conditional debtor must refrain from doing – otherwise, if the debtor prevents the conditional event from being fulfilled, the obligation must then occur (if the debtor prevents the event from happening, then he is engaged as if it was a pure and simple link of obligations)

If an event isn’t realized not because of the normal course of things but because of the debtor’s inaction/action – this person is responsible for the non-realization of the event, and it’s in the charge of the debtor and he is engaged in an obligation

Ie, if I oblige myself to buy your house at X price if I get a loan at Y interest rate within a reasonable time. If I don’t consult any banking institution to seek the loan, the event will not have happened as a result of my inertia – not because of a normal course of events. In such a case, I am liable for the non-realization of the event. I therefore take responsibility for the failure to carry out the event and am then engaged in the relationship of obligations

o CCQ 1504: The creditor, pending fulfillment of the condition, may take any useful measures to preserve his rights.

The power of the conditional creditor, even though the obligation is suspended – even when the obligation is suspended, the creditor has certain powers

This article refers to protective measures (a number of legal provisions) that enable a creditor to ensure the performance of the future obligation in the event the creditor has doubts, for example, about the debtor’s solvency.

This is conservation – legal disposition which allows the creditor to assure the execution of future obligations (to guarantee their rights)

This article demonstrates that the creditor’s right still exists in its substance. Even if the relationship of obligation has not yet arisen, pending the fulfillment of a condition gives rise to rights between the parties

Ie, your debtor has certain assets that have determined your commitment with him, and you have reason to fear the loss of these assets, then you can take protective measures to guarantee your right as a creditor

o CCQ 1505: The conditional nature of an obligation does not prevent it from being transferable or transmissible.

Patrimonial rights – the credit is considered like a thing for the purpose of the patrimony (the possibility of the obligation being fulfilled constitutes a transferrable property right). This is because the potential claim is an asset, and an asset allows me to generate credit or cash because an asset can always be sold

You can sell the conditional credit (this is for later, when we talk about transmission of obligations/cession de créance) – that is, it is possible to sell the claim, even if it does not yet exist

There’s a risk towards transferring the credit in these cases, which is marked by the condition – it’s a transfer of the risk in these cases

Regime of obligations is very important to the economic world (it’s the base of the law of credit of obligations)

For example: You are a seller and I’m engaged to buy your house at a certain price – can sell credit because of patrimony (conditional obligation – eventual credit for the price of sale – is an asset, which generates credit. Because you can sell an asset)

73Nicole Spadotto

o CCQ 1506: The fulfillment of a condition has a retroactive effect, between the parties and with respect to third persons, to the day on which the debtor obligated himself conditionally.

The existence of the event produces a characteristic effect: the retroactive effect (CCQ 1506 and 1507). The retroactive effect is absolute: the obligation is formed on the day of the engagement (but if the event is not realized, it’s as if the obligation never existed). It is assumed that the obligation existed as soon as the contract stipulating the condition was concluded

For example, you’re engaged to buy a house. I get a loan three weeks, and so you’re obligated to pay a price retroactively – we act as if I were obligated to pay the price as soon as the sales contract is concluded

What’s important is that with respect to third parties: this need not only be between the parties, as it may be of importance where third parties have constituted competing rights

o Realizing the suspensive obligation – CCQ 1507: The fulfillment of a suspensive condition obliges the debtor to perform the obligation, as though it had existed from the day on which he obligated himself under that condition. / The fulfillment of a resolutory condition obliges each party to return to the other the prestations he has received pursuant to the obligation, as though the obligation had never existed.

Distinguishes between a suspensive condition and a resolutory condition from the point of view of retroactivity

Line one: Forray says the paragraph is very clear (suspensive condition means the birth of the obligation is suspended) – once suspensive condition is realized, debtor must perform the obligation as of the date he obliged himself under this condition

Line two: fulfillment of a resolutory condition: resolutory is like a nullity – if the event occurs, it’s like a resolution of the contract/obligation

If resolutory condition is completed, obliges the other party to restitute the other of the prestation that they received (condition which suspends the legal relationship if the event stipulated is produced). Parties revert to initial state by restitution law

In other words, if the stipulated event occurs, each party returns to the original state through restitution law, much as if there were a contractual nullity

Obligations with a term- Hypothesis: the economic effects that the parties stipulate in the contract has the

effect of unrolling in time, and here the term is the technical instrument that permits the punctuation of this economic operation in time

- The term refers to a future and certain event (this future event can be qualified as uncertain, but the uncertainty is the date of occurrence – ie, we know death is certain, but its date is not certain). It’s common to set a specific date as a term: the term is said to be certain in the case that it will expire

- The arrival of the term is called the “expiry of the term” - Certain term vs. uncertain term:

o Certain term: when we know in advance the date of the future event Ie, rent must be paid on the 1st of each month

o Uncertain term: when the date of the future event is not known, even though we know the event will occur

Ie, death

74Nicole Spadotto

- Suspensive term vs. resolutory/extinctive termo Suspensive: the effects of the act are postponed until an event occurso Resolutory/extinctive: effects will end when an event occurs

- Structure of the Code, definitions, and characteristics :o CCQ 1508: An obligation with a suspensive term is an existing obligation

that does not become exigible until the occurrence of a future and certain event.

There is already an obligation because the event is future and certain. What’s suspended is the exigibility of the obligation (not the obligation itself). The obligation exists, but a delay in its execution is introduced even as the link of the obligation is already in place/committed

Ie, I have committed to buying your home and we have agreed that I will pay the full monthly price within three months (the obligation already exists – we do not speculate on the existence of the link of obligation – but only the enforceability of the obligation is suspended)

o CCQ 1517: An obligation with an extinctive term is an obligation which has a duration fixed by law or by the parties and which is extinguished by expiry of the term

The extinctive term is the end of the link of obligation by the passage of time (when a point of time is reached, the obligation is extinguished)

Lluelles and Moore say this isn’t a modality. The extinctive term is not a modality of the obligation itself, but a cause of extinction of the obligation. This is because the end of term is going to happen regardless of the obligation (whether it happens or not), so it’s not an obligation’s way of being. Other doctrine unanimously agrees (also see Baudouin, Vézina, and Jobin)

An extinctive term is really only a mode of extinction of the obligation – not a true juridical notion

However, the CCQ has dealt with the extinctive term in the section on the terms of the obligation – just keep in mind that the extinctive term is a way of extinguishing the obligation

- Sources of the term ?o The contract, and the laws – this is the primary/privileged source

Main source of the term is the contract: the parties agree to defer the payment of an obligation until the occurrence of an event, either on a certain date or an uncertain date

However, the law can equally fix certain terms: the law postpones the due date of the obligation

o Customary term – terms which find their sources in usage; certain types of contracts have this

The very order of things means that it is possible to postpone the due date of the obligation over time

Example: contract with a work contract to renovate a roof, and it’s stipulated in the contract that the work must be completed as soon as possible, as a matter of urgency. However, if the weather conditions do not allow the work to be carried out, as is customary in the construction sector, the execution will be postponed in time until the temperature is better. The term then postpones the due date in time.

A tacit contractual term obligation is of such a nature that it cannot be performed immediately because, for example, the work performed involves a passage of time (ie, some work cannot be done without prior work being completed – when the inexecution of obligation Y is


Not an explicit term, but is tacit from the nature of the contract or the obligation. Term may be tacit or implicit - difference with the condition that must be clearly expressed.


Custom is the notion of regular practice in a certain industry


Ie, “You have to get me a cake every day until my birthday.” And then once the term expires, you no longer have to give me a cake.

75Nicole Spadotto

impossible before the execution of obligation X (some work cannot be done without prior work being completed).

o Grace period terms – the court is capable of giving this. To distinguish the source of the term: if it’s a judicial decision or decision of the creditor, it’s a grace term. If it’s voluntary by both the parties, it’s not.

Term which finds its source in the decision of the court or the creditor For example, the court may have to offer a grace period to a debtor in

difficulty. Similarly, a creditor may agree to postpone the due date of the debtor’s obligation, in particular when the debtor is in difficulty. He then grants him an additional period of time to execute the payment.

The three other sources (contract, laws, customary term) are opposable to the grace term

** CCQ 1512: The court may also fix the term where a term is required by the nature of the obligation and there is no agreement as to how it may be determined (ie, the court can fix a term if the parties don’t determine it after reasonable time based on the “nature of the obligation”)

Judicial character of the event- Computation of delay: the term stipulated is not at a certain date, but a term is

constituted by the expiration of the date (exigible) o CCQ 1508: An obligation with a suspensive term is an existing obligation

that does not become exigible until the occurrence of a future and certain event

In the case of a conditional obligation, the very existence of the obligation is suspended until the condition occurs, which may never happen. In this sense, the obligation has not yet been born. However, in the case of a suspensive term, only the due date is postponed. In this sense, the obligation already exists, but it’s enforceability only is suspended.

We therefore don’t speculate as to the future existence of a link of obligation

It is because the event is future and certain that the link of obligation already exists, and only the enforceability of the obligation is suspended

- This still means that the event could count as certain (very notion of conditional obligations formed in CCQ 1509 and 1510):

o CCQ 1509: Where the obligation does not become exigible until the expiry of a period of time but no specific date is mentioned, the first day of the period is not counted, but the day of its expiry is counted.

Just about how you count/calculate the days (time limits) – not super important

The problem of computation of the time limit – when one has a stipulated term not on a certain date, but when one has a term consisting of the expiry of a time limit

Technical mode of delay of calculation – counting from the end- Certainty is subjective per the perspective of the parties (a term needs the event to

be certain, but for the parties!): o CCQ 1510: If an event that was considered certain does not occur, the

obligation is exigible/due from the day on which the event normally should have occurred. (Showcases that the certitude is subjective on the part of the parties, since it’s possible for an event considered certain to not occur)

This says a lot about the certainty of the upcoming event, and gives us the means to distinguish the condition from the term


The term may derive from the very nature of the obligation (see Uniprix), CCQ 1512 al 2.

76Nicole Spadotto

The first part: If the certain event doesn’t arrive, then the event objectively isn’t certain…so this shows that the certainty is totally subjective in the eyes of the parties (because if it was objectively certain, it actually would have happened)

“Considered certain” means we are talking about an inevitable event from the parties point of view. We can’t make it not happen. However, objectively, an even that’s considered certain may, in the real course of events, not occur

Fundamentally, there’s an incertitude in obligations – the only certainty in a term is death (thus, certainty is from the point of view of the parties; since it’s reasonable to want to be paid for the work you’ve done, this is a juridically certain event)

Distinguishing between the term and condition: the condition refers to a future and uncertain event in the sense that it may not happen; the term refers to an event the parties can consider to be certain (inevitable event from the parties point of view)

Ie, the QCCA gave a decision regarding whether a clause in a contract between a construction company and subcontractor was a term or condition. The clause was that the main contractor undertakes to pay the subcontractor as soon as he has received payment for the work from the primary contractor. Objectively, this seems to be a condition because we are not sure whether the event will occur. However, subjectively, from the point of view of the parties, it is an event that can be considered certain because contractor of the work is certain to be paid (making the second payment conditional on the first is simply postponing the payment)

The second part: From the day when the certain event normally should have occurred, the creditor may exercise the actions of a creditor who has not yet been paid. From this moment here, the mechanism of forced execution of obligations has been put in place. Not only is it possible to establish in term an event that is considered certain by the parties, but if the event does not happen we will act as if it did happen. This is because there is a sufficiently solid foundation for the postponement in time of the execution of the obligation.

Extinctive term vs. suspensive term- Extinctive term: not really a modality, just a mode of extinction of the obligation

(Baudouin, Jobin, et Vézina)- Suspensive term: this is an obligation which postpones the exigibility (due) until the

arrival of an event that’s future and certain, which constitutes the term

Example for distinction between term and condition (ie, the certainty of the event)- The contract states that the owner of the house must pay the contractor for work

done within five months after the bill is given o Term or condition? If the clause says you must pay, in the eyes of the parties

it’s certain and thus a term (there is still a risk that the owner won’t pay, but this isn’t about sharing the risk)

o If the owner doesn’t pay, the event wasn’t produced – then look at CCQ 1510 to see if the obligation is exigible

o The obligation is that you must pay, and if you don’t pay this is an inexecution of the obligation

77Nicole Spadotto

o The parties consent is really important, the stuff they agreed upon together. Must interpret contractual voluntariness to determine whether the parties consider the event to be certain or uncertain

The case of uncertain terms – this is an event that does not have certitude as to when it will happen (like death)

The Regime – term (Uniprix case) - Note here we’re talking about the suspensive term and not extinctive term (which

isn’t really a modality)- A forward obligation is an obligation that has been deferred until the future and

certain event which constitutes the term – the whole regime of the term is based on this notion of exigibility

o A debt that is due can be the subject of an action for enforcement: the creditor then can take action against the debtor (when the debt is due). However, when the obligation is not yet due, it means the creditor cannot take any action to be paid before the expiry of the term (CCQ 1513)

- Benefits of the term:o CCQ 1511: A term is for the benefit of the debtor, unless it is apparent from

the law, the intent of the parties or the circumstances that it has been stipulated for the benefit of the creditor or both parties. / The party for whose exclusive benefit a term has been stipulated may renounce it, without the consent of the other party

In the silence of the law, the term is a modality stipulated for the benefit of the debtor – the term is a thing fundamentally accorded to the debtor, because of the exigibility of the term

If the term is in the interest of the debtor, what happens if the debtor pays before the event? Is this undue reception? This is a big question, but the term is for the benefit of the debtor which means that if they pay earlier they’re just exercising their option to do so. It’s not undue reception.

Advanced payment is only valid if the term has been granted for the exclusive benefit of the debtor. It’s impossible if the interest was granted for the benefit of both parties, or the exclusive benefit of the creditor. If the term stipulation is to the benefit of both parties or for the creditor, the advance payment would therefore be invalid and the creditor cannot be forced to accept it (see explanation under CCQ 1513)

Second paragraph: where the term is in the exclusive benefit of the creditor, the creditor may waive it – and can then sue the debtor for payment

Attention! Legally this is not the same as advance payment. - Existence of the fixation of term:

o CCQ 1512. Where the parties have agreed to delay the determination of the term or to leave it to one of them to make such determination and where, after a reasonable time, no term has been determined, the court may, upon the application of one of the parties, fix the term according to the nature of the obligation, the situation of the parties and any appropriate circumstances. / The court may also fix the term where a term is required by the nature of the obligation and there is no agreement as to how it may be determined. (See Uniprix inc. c. Gestion Gosselin et Bérubé inc.)

Determination of the term is at the discretion of the parties, but it’s important to note that sometimes the term is not determinate (ie, parties have not provided information on this point, or may not have

78Nicole Spadotto

even planned to postpone the determination of this term). In such a case, the court will be able to supplement the will of the parties

In other words, the parties agreed to introduce a term into the contract, but the determination of that term was also delayed or at the discretion of a party

This article permits any of the parties to bring an action before the court to fix the term after the expiration of a reasonable delay (courts to consider the nature of the obligation, the situation of the parties, and all other appropriate factors to supplement the intention of the parties)

In paragraph 2, when the court can fix a term when required by the nature of the obligation and there’s no agreement – provides for a change in the situation, but where the parties haven’t provided anything on this point. The court will supplement the will of the parties in this case

o The question of perpetual engagements : Uniprix Inc. v. Gestion Gosselin: situation where there was an automatic renewal of the contract in which one of the parties had not informed the other party of its intention to terminate or renew the agreement. The other party wanted to terminate the relationship and used this clause, so the question was whether the party wishing to terminate the contract could use a renewal authority given to the other party in the contract.

The argument developed by the party who wanted to terminate the contract (which was not mentioned by the clause, but who benefitted from the clause) was that denying them the benefit of this clause meant permanently chaining him to this contract, because the contract could be renewed indefinitely by the other party – thus, we see a “perpetual commitment”

The court looked at the convention of the renewal. The question was whether one party could use the power to renew or get out of the contract without the agreement of the other party. One side argued that the contract renewed indefinitely at the sole discretion of the other party, and concluded that it was a perpetual engagement. The CoA looked at CCQ 1512 and said the clause wasn’t perpetual (did not subscribe to this argument); they mobilized the power of CCQ 1512 and used the power of the court to fix the term, looking at the intention of the parties to do so.

In Uniprix, the Court of Appeal authorized the termination of the contract not by subscribing to the argument related to the perpetual undertaking of the contract, but on the basis of CCQ 1512. The CoA relies on the analysis of the parties’ intention, which shows that it was not the intention of the parties that the agreement should be perpetual.

Note that the possibility of a perpetual commitment seems quite conceivable, including through automatic renewal of the contract at the end of the term (QCCA ruling did not preclude this).

- The consistency of the law (this whole regime is formed around this article here): o CCQ 1513: What is due with a term may not be exacted before the term

expires, but anything performed freely and without error before the expiry of the term may not be recovered.

Exigibility (part one is crucial because it is the point of articulation of the legal regime of the term)

The whole regime of the term starts from the notion of exigibility, because the debt due is a debt that can be the subject of an action for enforcement

79Nicole Spadotto

The creditor may take action against the debtor from the time the debt is due. However, when the obligation is still in term, the debt is not payable. The creditor cannot take any action to be paid before the end of the term. Until the event has occurred, the debt is not due, and therefore the creditor cannot act for payment beforehand.

In this article, there is already an almost perfect link of obligation: there’s creditor and already a debtor; the quality of the prestation has already been determined. The obligation only lacks its enforceability/exigibility. The creditor’s right to demand payment is only temporarily paralyzed (this explains the second part of the article)

Advanced payment made in liberty/without error generally cannot be recovered

Fundamental for the logic of terms with CCQ 1511: the term has exigibility, which means the creditor cannot force the debtor to pay beforehand. But the debtor is at liberty to perform his obligation in advance, before the expiry of the term, if they want to. If the debtor does pay in advance, they can’t ask for that money back (contributes towards their obligation). If it’s performed freely and without error, then it’s not undue reception.

However, if the advanced payment was made under duress or error, the debtor who paid before the expiry of term has at his disposal an action for recovery of the undue payment (réception indue)

This paragraph/notion corresponds to the idea that the term is tied to a period of time granted to the debtor (the term is stipulated in the interest of the debtor) to enable him to perform his obligation. Implicit principle in CCQ 1513 is that the term is stipulated in favour of the debtor, so that the debtor has granted time to fulfil his obligation. (The CCQ specifies this in CCQ 1511(1): “the term is for the benefit of the debtor, unless it is apparent from the law, the intent of the parties or the circumstances that it has been stipulated for the benefit of the creditor or both parties”).

o However, if the term was stipulated for the creditor or even for the benefit of both parties, the debtor paying ahead of time will not be possible (ie, a contract with interest payment – the creditor is not obligated to accept advanced payment because he gets more benefit of interest the more time goes by)

o The concept of advance payment is subject to the fact that the term must be stipulated in favour of the debtor (which is the presumption). However, exceptionally, the law, will of parties, or circumstances will cause it to be stipulated in favour of both parties or the creditor (see CCQ 1511)

- The responsibility of the debtor at term:o CCQ 1514. A debtor loses the benefit of the term if he becomes insolvent, is

declared bankrupt, or, by his own act or omission and without the consent of the creditor, reduces the security he has given to him. / He also loses the benefit of the term if he fails to meet the conditions in consideration of which it was granted to him.

80Nicole Spadotto

Insolvent, bankrupt, or act of omission – this article is in response to a situation that affects the relationship between the debtors obligation to the creditor, to the detriment of the creditor (losing the benefit of the term as a sanction to the debtor, and conceived as a response to a problem that affects the link of obligation to the detriment of the creditor)

o CCQ 1515: Renunciation of the benefit of the term or forfeiture of the term renders the obligation exigible immediately.

Ties to CCQ 1514: when the debtor loses the benefit of the term, the obligation is due

o CCQ 1516: Forfeiture of the term incurred by one of the debtors, even a solidary debtor, may not be set up against the other co-debtors.

- The ending/extinctive term: o CCQ 1517: An obligation with an extinctive term is an obligation which has a

duration fixed by law or by the parties and which is extinguished by expiry of the term

An extinctive term refers to the end of the link of obligation by the simple passage of time

When a certain point in time is reached, the obligation is extinguished

CONDITION AND TERMCCQ 1497: An obligation is conditional where it is made to depend upon a future and uncertain event, either by suspending it until the event occurs or is certain not to occur, or by making its extinction dependent on whether or not the event occurs.

CCQ 1498: An obligation is not conditional if it or its extinction depends on an event that, unknown to the parties, had already occurred at the time that the debtor obligated himself conditionally.

CCQ 1499: A condition upon which an obligation depends is one that is possible and neither unlawful nor contrary to public order; otherwise, it is null and renders null the obligation that depends upon it.

CCQ 1500: An obligation that depends upon a condition that is at the sole discretion of the debtor is null; however, if the condition consists in doing or not doing something, the obligation is valid, even where the act is at the discretion of the debtor.

CCQ 1501: If no time has been fixed for fulfillment of a condition, the condition may be fulfilled at any time; the condition fails, however, if it becomes certain that it will not be fulfilled.

CCQ 1502: Where an obligation is dependent on the condition that an event will not occur within a given time, the condition is considered fulfilled once the time has elapsed without the event having occurred, and also when, before the time has elapsed, it becomes certain that the event will not occur.Where no time has been fixed, the condition is not considered fulfilled until it becomes certain that the event will not occur.

CCQ 1503: A conditional obligation becomes absolute when the debtor whose obligation is subject to the condition prevents it from being fulfilled.

CCQ 1504: The creditor, pending fulfillment of the condition, may take any useful measures to preserve his rights.

CCQ 1505: The conditional nature of an obligation does not prevent it from being transferable or transmissible.

CCQ 1506: The fulfillment of a condition has a retroactive effect, between the parties and with respect to third persons, to the day on which the debtor obligated himself conditionally.

81Nicole Spadotto

CCQ 1507: The fulfillment of a suspensive condition obliges the debtor to perform the obligation, as though it had existed from the day on which he obligated himself under that condition.The fulfillment of a resolutory condition obliges each party to return to the other the prestations he has received pursuant to the obligation, as though the obligation had never existed.

CCQ 1508: An obligation with a suspensive term is an existing obligation that does not become exigible until the occurrence of a future and certain event.

CCQ 1509: Where the obligation does not become exigible until the expiry of a period of time but no specific date is mentioned, the first day of the period is not counted, but the day of its expiry is counted.

CCQ 1510: If an event that was considered certain does not occur, the obligation is exigible from the day on which the event normally should have occurred.

CCQ 1511: A term is for the benefit of the debtor, unless it is apparent from the law, the intent of the parties or the circumstances that it has been stipulated for the benefit of the creditor or both parties.The party for whose exclusive benefit a term has been stipulated may renounce it, without the consent of the other party.

CCQ 1512: Where the parties have agreed to delay the determination of the term or to leave it to one of them to make such determination and where, after a reasonable time, no term has been determined, the court may, upon the application of one of the parties, fix the term according to the nature of the obligation, the situation of the parties and any appropriate circumstances.The court may also fix the term where a term is required by the nature of the obligation and there is no agreement as to how it may be determined.

CCQ 1513: What is due with a term may not be exacted before the term expires, but anything performed freely and without error before the expiry of the term may not be recovered.

CCQ 1514: A debtor loses the benefit of the term if he becomes insolvent, is declared bankrupt, or, by his own act or omission and without the consent of the creditor, reduces the security he has given to him.He also loses the benefit of the term if he fails to meet the conditions in consideration of which it was granted to him.

CCQ 1515: Renunciation of the benefit of the term or forfeiture of the term renders the obligation exigible immediately.

CCQ 1516: Forfeiture of the term incurred by one of the debtors, even a solidary debtor, may not be set up against the other co-debtors.

CCQ 1517: An obligation with an extinctive term is an obligation which has a duration fixed by law or by the parties and which is extinguished by expiry of the term.

Uniprix Inc. c. Gestion Gosselin et Bérubé inc.Facts:The respondent companies decided to affiliate their pharmacy with the Uniprix banner. They entered into contract of affiliation for a fixed term of five years. There was a clause which the contract would be renewed automatically unless the member pharmacists gave notice that they didn’t want to renew. The contract was automatically renewed twice by virtue of that clause. Uniprix notified the member pharmacists that the contract would end. The member pharmacists objected and said the contract of affiliation was to be renewed automatically unless the member pharmacists gave notice to the contrary. Uniprix said they could oppose the renewal and terminate the contract upon expiry of the term. Uniprix said that the interpretation of the pharmacists could have the effect of binding the parties in perpetuity, which is against public order.

82Nicole Spadotto

Issues:Can Uniprix end the continuation of the contract, even though the clause said that the member pharmacists could terminate?

Judicial History:The Superior Court said the contract was renewed, and that Uniprix could resiliate the contract only for cause – and not without cause, as it tried to do here. The SC said that unilateral renewal clauses are valid in Quebec law, even though they might give a contract a perpetual affect.

Decision:Affirms judgement of the Superior Court. Appeal dismissed.

Legal Reasoning:Levesque and Émond: Uniprix through these actions was now trying to insert itself into the member pharmacist’s business decisions by trying to get the member pharmacists to participate in a disadvantageous project and threatening to end business if they didn’t participate. The cause is clear: the contract was for a fixed term and renewed automatically unless the member pharmacists gave notice to the contrary. Uniprix agreed to this, and agreed to be bound for many years and that if the member pharmacists didn’t object Uniprix would be continued to be bound. The damages clause (ie, damages if the member pharmacists ended the contract before the expiry of the term) was corollary to this principle. Even though the renewal mechanism may cause the contract to become perpetual, it didn’t make the notice given by Uniprix to end the contract valid (the CCQ doesn’t prohibit perpetual contracts). Courts may elevate certain principles grounded in the fundamental values of our society to the rank of public order: but no such value was violated by the possibility of the contract becoming perpetual. Uniprix wasn’t vulnerable, and the contract was a standard form that Uniprix themselves had drafted. It was also normal of Uniprix to bind themselves for a long term and not be able to cut off its members as it pleased (because Uniprix was created for the benefit of pharmacists and to protect their interests). Even if the contract had been for an indeterminate term, Uniprix had not acted in good faith – which barred them from resiliating the contract. If a contractual term is subject to only the will of one of the parties, CCQ 1512(2) can be used for the court to read in a term.

Dissent: Duval Hesler: The renewal clause made it impossible for Uniprix to know the contract’s termination date, which turned the contract into one for an indeterminate term. So the contract could be resiliated on reasonable notice (which is six months, given this is what the parties had chosen and given the member pharmacists had the option of joining another company or operating their businesses privately).

Ratio: - CCQ 1512 applies where there is no term or where the term is uncertain, but does not apply to

thwart the automatic renewal of a contract whose term is, as in this case, clearly defined. Where a term can be fixed subject to the will of only one of the parties, CCQ 1512 grants the courts the power to fix said term.

- In the CCQ, there is no general provision in obligations which specifically prohibits perpetual contracts

- To the extent that the parties have similar bargaining power, they may enter into a contractual agreement under which one or both parties waive the ability to terminate the contract by the sole force of their will. However, if one party is vulnerable to the other, the automatic renewal clause, which gives the contract its perpetual aspect, may be considered unfair in favour of the vulnerable party

Notes:From summary last year: CCQ 1512; COURTS HAVE POWER TO FIX TERM WHERE TERM IS EITHER UNKNOWABLE OR CONTRACTUAL OBLIGATIONS ARE UNCERTAIN THROUGH INACCURATE CONTRACTUAL LANGUAGE

83Nicole Spadotto

Dispute concerning the renewal of a lease for a franchising agreement. One of its clauses specifies both the term of the contract, and the modalities of its renewal – that it would automatically renew every 5 years, but was also only subject to the franchisor’s sole discretion as to whether to renew or not. This created both a perpetual contract, and one which could only be annulled by one party. Uniprix argues this creates a contractual link in perpetuity dependent on the will of only one of the parties. Reasoning: Court agrees that no such clause is possible. 1512 CCQ grants courts the power to fix a contractual term where there is a total absence of a term, the wording of the contract creates uncertainty as to the duration of the obligation between the parties, or the parties have not agreed to the term. Where a term can be fixed subject to the will of only one of the parties, as is the case here, the second para of 1512 grants the courts the power to fix said term. Court uses this to create a term for the contract between Uniprix and Gestion Gosselin.** Forray argues that the court was not bound to interpret and apply 1512 as it did in this case, but that it did so because of the significant power disparity between the contracting parties. It employed the law (1512) to reach a policy-based decision that would otherwise have been outside of its competence to rule on (since there is nothing in the Code preventing perpetual Ks)

Services immobiliers Gestram inc. (Sotheby’s International Realty Quebec) c. OhannessianFacts:

- Real estate brokerage contract for sale of building in Brossard - Obligations provided for Contract and incumbent have been fulfilled – promise to purchase land

submitted to sellers, promise in accordance with terms and conditions in contract - Sellers refused to sell by invoking new conditions regarding deadline for signing deed of sale and

occupation - Broker claiming amount of commission he should have gotten - Seller refused to pay, as the offer did not fulfill terms of contract terms- Seller allege they properly informed all necessary parties, and they seek reimbursement of extra

judicial fees

Issues: - Did the promise to purchase presented to the sellers fulfill the essential conditions of the contract

thus entitling them to the commission provided for?

Decision: - Yes, Broker can get claim for 6% of advertised selling price. Recourse against sellers is justified.

Judicial Reasoning: - Royal Lepage Des Moulins inc. c. Hélène Baril and Alain Grange: The mandate given to the

latter is not, in my opinion, simply to ensure that some people are interested in the building when all the conditions of the future sale have been specified and that the offer to purchase is , in addition, perfectly in line with the requirements of the sellers. The broker has, indeed, perfectly executed his obligation by bringing to the sellers an offer which one must qualify as perfect. It was therefore the sellers' obligation to enter into the agreement. To decide otherwise would mean that the payment of the commission of the real estate agent, within the framework of the contractual clause cited above, would depend on a purely potestative condition on the part of the respondent

- The Tribunal must refer to the contract between the broker and the Sellers to establish the rights and obligations of the parties and determine whether, had it not been for the Sellers' refusal, the sale would have materialized.

- In these circumstances, Sotheby's has fulfilled its obligations and is entitled to the compensation provided for in the Contract, now assigned to Mr. Worrell.

- The Tribunal cannot accept the Sellers' contention that it was not possible for Sotheby's to submit a perfect offer of purchase in light of the terms of the Contract. To conclude this way would enable the Sellers to free themselves from their commitment without regard to the obligations

84Nicole Spadottocontracted with Sotheby's and in their sole discretion.

Ratio:The principle is now clearly established that when a promise to purchase contains customary conditions and which correspond to the clauses of the brokerage contract, the owner-seller is not obliged to sell but, in such a case, the remuneration is due

Notes: CCQ 1497: An obligation is conditional where it is made to depend upon a future and uncertain event, either by suspending it until the event occurs or is certain not to occur, or by making its extinction dependent on whether or not the event occurs.CCQ 1500: An obligation that depends upon a condition that is at the sole discretion of the debtor is null; however, if the condition consists in doing or not doing something, the obligation is valid, even where the act is at the discretion of the debtor.CCQ 1503: A conditional obligation becomes absolute when the debtor whose obligation is subject to the condition prevents it from being fulfilled.CCQ 1507: The fulfillment of a suspensive condition obliges the debtor to perform the obligation, as though it had existed from the day on which he obligated himself under that condition.

MacDonald and Brierley, “Quebec Civil Law”- The Code attempts to structure every important variation on the root concept of obligation - these

“kinds” of particular forms of obligations, largely definitional in character, are described as “modalities”

- Because various provisions in the Code governing modalities are generally suppletive, parties to a contract are free to depart from them as they wish (though there’s a few which are imperative, including conditional obligations)

- Simple obligations: those between one debtor and one creditor, having a single object, and being immediately exigible are called “simple” - but there are also simple modalities (like a term)

- Term: by which the performance of an obligation is delayed until the happening of a future and certain to occur event (is a simple modality)

- A conditional obligation is an obligation whose very existence is made to depend on a future, uncertain event

- To distinguish between term and condition: in obligations with a term, the obligation itself isn’t suspended. Only the exigibility of its performance is suspended (or deferred to some future, and usually determinate, date). A term may be indeterminate, such as death, as long as it is certain. A condition may also relate to a certain event if it consists of a stipulation that the event will happen or will not occur within a fixed time (so condition can trigger if time stipulated lapses).

- Two types of conditional obligations:o The obligation can be subject to a suspensive condition, as where the existence of the

obligation is delayed until the happening of a predetermined event (ie, sale with a trial period is made under a suspensive condition, as in the sale is not perfected and title doesn’t pass until after the trial period has elapsed)

o An obligation can be subject to a resolutory condition, as where an existing obligation can be retroactively extinguished if a predetermined event occurs (ie, if a translatory of a right in property, if a stipulated event occurs like the birth of children to the seller, the purchaser is deemed to never have been the owner and all rights in or over the property granted by the purchaser to third parties are retroactively extinguished)

- An obligation is null if it is conditional on the will purely on the parties promising (because against public order for an obligation to hinge exclusively on the will of the debtor)

o Also because if the party bound under the condition prevents its fulfillment the obligation becomes absolute, as if the condition was fulfilled

o A condition that depends simply on the will of the party promising (ie, where some external event must also occur) is valid if it consists in the doing or not doing of a certain act (as it’s a condition dependent purely on the will of the creditor)

- Code provides that a condition is void if it is contrary to public order and good morals, and that the

85Nicole Spadottoobligation that depends on it is also null

o Tension here with contractual freedom, but the QC Charter today provides effective limitation on contracts that impose discriminatory conditions

- Effects of conditional obligations: slightly different depending on whether the condition is suspensive or resolutory. Must be assessed prior to the happening of the condition and after its occurrence

o Prior to the happening of the condition: the beneficiary of an obligation contracted under a suspensive condition has no existing legal interest, although the right may be transmitted to heirs and the creditor may also take conservatory measures to protect his or her interest The happening of the condition makes the obligation absolute, and this with retroactive effect.

o By a legal fiction, an obligation subject to a suspensive condition is deemed to have existed from the date of the original contract, and an obligation subject to a resolutive condition is deemed to have never existed

o When the obligation relates to the obligation to give (in suspensive condition), the debtor must deliver the thing to the creditor immediately

o When the obligation is resolutive, if there’s been performance of the obligation before the happening of the condition, there must be complete restitution between the parties in order to re-establish their respective pre-contractual positions

The retroactivity of the obligation also has consequences where its object has perished/deteriorated in the interim: if the object is destroyed without default of the debtor, the ordinary regime of risk applies. But where it’s merely deteriorated, the risk falls upon the creditor unless the loss was caused by the fault of the debtor of the obligation

- Functionally, retroactivity is the key feature that distinguishes the effect of a conditional obligation from that of an obligation with a term - prior to the arrival of the term, the creditor cannot demand performance, subject to a stipulation accelerating the performance of the obligation upon the occurrence of specified events, or to the debtor’s loss of benefit of the term should he or she become insolvent or diminish the security given to the creditor to ensure performance

o Though the term is expressly stipulated in favour of the creditor, the debtor cannot perform the obligation by anticipation

o The regime of risk for the loss of the thing is that applicable to ordinary obligations - Because conditions are retroactive, the distinction between the effect of terms and conditions

result from that retroactivity. This has been the rationale for legislative interventions in hypothecary loan contracts and consumer sale contracts

ii. Complex modalities: indivisibility and solidarity Obligations for complex modalities

- These are the rules that govern the relationship of the obligation regardless of its source (contract, tort, quasi-contract)

- Attention! These rules as a whole are likely to apply to obligations from any source – but most of the time the regime has been designed around the contractual obligation (but can apply to quasi-contracts or torts)

- This is the base of credit law (financial operations and bankruptcy) and the law of business associations (law of business is an instrument of obligations)

Terminology- Complex modalities: they’re complicated. When we talk about complex modalities,

we talk about a plurality of subjects and/or plurality of objects of the obligation o There may be several subjects of the obligation, objects of the obligation,

several creditors, and/or several debtors o When you have several subjects, the obligation is made complex because you

have several relationships o We will mainly reason regarding the plurality of debtors

86Nicole Spadotto

- The fundamental question is the relationship between these elements which together form obligations

- Definition of obligations: a link which embraces all the elements and the relationship between them (the elements are objects and subjects – persons to whom the law applies)

- The principle of solidarity: to understand this, we must look first to joint obligations and indivision

o Solidary obligations precludes joint liability

Joint obligations vs. solidarity- Solidarity: each debtor is held liable for the totality of the debt- Joint: the debt is divided, and each debtor is held to pay the proportion of their

contributions (if it isn’t stipulated, must pay in equal parts)

Joint obligations – the debt is divided into as many fractions as there are debtors/creditors (obligation is divisible) CCQ 1518: An obligation is joint between two or more debtors where they are obligated to the creditor for the same thing but in such a way that each debtor may only be compelled to perform the obligation separately and only up to his share of the debt. / An obligation is joint between two or more creditors where each creditor may only exact the performance of his share of the claim from the common debtor.

- The joint obligation is a state of the obligation (because the obligation is joint). The joint obligation involves an idea of division/indivision of obligations which is the prerequisite for solidarity. Here, the obligation is divisible

- The debtors are “obliged…for the same thing” – BUT are constrained separately - The rule: debtor or credit is divided in a fraction between debtors and creditors

respectively. In other words, this means the debt or receivable is divided into as many fractions as there are debtors or creditors (in principle, into equal parts)

- Main effect of the joint obligation: the creditor is allowed to claim from each debtor his share of the obligation. The creditor can only claim from one debtor that debtor’s share of the total debt – the debtors are only liable for the amount they are to contribute (divided in proportion).

- Each debtor frees himself from the obligation by paying his own share (separate obligations between each debtor and the creditor)

- Thus, the obligation isn’t technically “joint” (the label is misleading), but is contracted conjointly

Divisible or indivisible obligations:- Lluelles et Moore say that the divisible obligation may be split, whereas the

indivisible obligation must be performed in one and the same operation

Divisible obligations CCQ 1519: An obligation is divisible by operation of law, unless it is expressly stipulated that it is indivisible or unless the object of the obligation, owing to its nature, is not susceptible of division either materially or intellectually.

- Default position is that the obligation is divisible, unless it’s expressly said that it’s indivisible

CCQ 1522: A divisible obligation binding only one debtor and one creditor must be performed between them as if it were indivisible, but it remains divisible between their heirs.

- This is to protect the creditor: cannot force the creditor to divide the obligation, even if it’s possible to do so

- Forray says this rule is bizarre/useless. It follows from other rules in the CCQ, so isn’t in of itself that important

87Nicole SpadottoIndivisible obligation

- Indivisible : that which cannot be divided. It’s when the debtor must execute the obligation in one take.

- Dumoulin tells us that the obligation is indivisible when it is impossible for the debtor to perform it in part

- Indivisibility becomes a question when there is an object that can be divided, but may have been made indivisible

- The source of the indivisible obligation is double: 1) nature (by the nature of the thing/object); or 2) conventional (voluntariness expressed in stipulation)

- Indivisibility finds its place by nature, in the object of the obligation . The indivisibility of the obligation is a consequence of the indivisibility of the object of the obligation – ie, if you had to deliver a specific marble statute, it’s not possible to consider a split execution of this obligation. It’s by the very nature of the object that the obligation is indivisible. Can see this coming into play if there are two debtors to deliver the marble statute: at this moment, the indivisibility of the object has an influence on the obligation since there are several subjects. Indivisibility must thus in this case be taken into account as a modality of the obligation

- Indivisibility also finds its place in stipulation : we must reason as if we were bound by the nature of things, but nevertheless another source exists in the stipulation, where parties can make an object a priori divisible or indivisible.

CCQ 1519: An obligation is divisible by operation of law, unless it is expressly stipulated that it is indivisible or unless the object of the obligation, owing to its nature, is not susceptible of division either materially or intellectually.

- Text establishes the principle that the obligation is divisible ipso jure, unless the obligation has been made indivisible or the object of the obligation is not, by its nature, capable of material or intellectual division

o “An obligation is divisible by operation of law” – a ruleo “Expressly stipulated” – voluntary by the partieso “Object of obligation owing to its nature” – nature of the obligation o “Materially or intellectually” – things that are not able to be divided based on

the nature of the thing (not important for fundamental comprehension). Intellectual division refers to complex objects of the obligation. Ie, a house forms a whole, but it can be intellectually divided into two parts (ie, one debtor builds the roof and another builds the doors)

CCQ 1520: An indivisible obligation may not be divided, either between the creditors or the debtors or between their heirs. / Each debtor or each of his heirs may separately be compelled to perform the whole obligation and, conversely, each creditor or each of his heirs may exact the performance of the whole obligation, even though the obligation is not solidary.** Taken together, CCQ 1518 and 1519 establish that any obligation with multiple debtors/creditors is, by default, divisible between the debtors/creditors, unless it is indivisible by its nature or so stipulated

Solidary obligations: each of the debtors is liable for payment of the whole amount to the creditor (bear the risk) – the payment is indivisible (an indivisible obligation)

- To understand a solidary obligation, we must see it contrasted with a joint obligation – the consequence of the joint obligation is to divide the debt into as many portions as there are parties (divisional profit). Solidary obligation is the opposite: when one has a situation of solidary obligation, each of the debtors is liable for the entirety of the debt to the creditor (can also be a plurality of creditors)

- With solidarity, the creditor increases his chances of being paid because he has at his disposal two or more assets from which he will be able to collect his claim: says something about general economy of solidarity because credit is based on increasing the creditor’s confidence (because he has two patrimonies from which to draw). This aggravates the situation of the debtors


** Determining elements: it’s the right for the creditor to recover (stipulation for solidarity is the most secure situation for the creditor). Two+ patrimonies which guarantee the payment of the obligation in its totality for the benefit of the creditor


The indivisibility is brought about by the simple fact of solidarity. Once the co-debtor makes the indivisible payment to the creditor, the debtor who paid goes to get his money from the other co-debtors – this next payment is divisible, as each co-debtor is only responsible for his share.


When two debtors are solidarity liable for the whole of the debt. When one pays the debt, they pay the whole of the debt and thus also liberate the other debtor. But they become subrogated into the rights of the creditor and can get the other debtor’s share of the debt.Person A and person B are solitarily liable for $100 to a creditor. Person A pays the full $100, liberating person B from the obligation. Now, Person A can go after person B for their share of the $100, which unless stipulated otherwise, is half.

88Nicole Spadotto

o The way to go through key elements of solidarity is to conceive of solidary as an element that aggravates the debtor’s patrimonial situation and is a supplement to the creditor. The creditor increases his chance of being paid because he has two or more patrimonies at his disposal from which to collect his claim. Since solidarity aggravates the situations of the debtors, it’s not presumed to be (see CCQ 1525)

CCQ 1521: A stipulation of solidarity does not, in itself, make an obligation indivisible.CCQ 1523: An obligation is solidary between the debtors where they are obligated to the creditor for the same thing in such a way that each of them may be compelled separately to perform the whole obligation and where performance by a single debtor releases the others towards the creditor.

- The debtor is responsible for all the reimbursement vis-à-vis the creditor – solidarity is primarily a right for the creditor, because it reverses the risk of insolvency (it’s not the creditor, but the debtors, who bear the risk)

- The debtor is liable for the whole amount, even if the object is indivisible – the creditor can go to any debtor to have the obligation fulfilled (debtors are forced to the “same thing,” but are constrained in solidarity)

- A payment made by a single debtor releases the other debtors vis-à-vis the creditor. Debtor can then go after others to return their part of the obligation

- We must always keep in mind that in solidarity, there are two types of relationships:o The relationship between the solidary co-debtors vis-à-vis the creditor in

respect to the creditor (called “obligation to the debt” – “l’obligation à la dette”)

This is the question of the obligation to the debt, represented in the relationship between the co-debtors and the creditor

For example: a creditor lends $50,000 to co-debtor D1 and D2. The general obligation relationship is subdivided into two links of obligation: that between the creditor and D1, and the creditor and D2

o The relationship between the solidary debtors: in particular, what happens when one of the solidary debtors has paid all the debtors is that he releases the other solidary debtors from the creditor (called “contribution to the debt”)

The question of contribution to the debt is represented in the relationship between the co-debtors

The debtor who pays is not held for everything: they can sue the other codebtors to recover the latter’s portions

CCQ 1524: An obligation may be solidary even though one of the co-debtors is obliged differently from the others to perform the same thing, such as where one is conditionally bound while the obligation of the other is not conditional, or where one is allowed a term which is not granted to the other

- Important point concerning the solidary obligation appears in CCQ 1524- Even if obligated differently, can still have solidarity - Solidarity does not cease because a creditor has stipulated a condition to one of the

solidary debtors and not the others: ie, a $50,000 loan upon which one of them has a term

CCQ 1525: Solidarity between debtors is not presumed; it exists only where it is expressly stipulated by the parties or provided for by law. / Solidarity between debtors is presumed, however, where an obligation is contracted for the service or operation of an enterprise. / The carrying on by one or more persons of an organized economic activity, whether or not it is commercial in nature, consisting of producing, administering or alienating property, or providing a service, constitutes the operation of an enterprise.

- Line one: solidarity is not presumed. Solidarity exists only if stipulated by the parties or if provided for by law

o Stipulated by parties: the agreement must constrain a provision indicating solidarity, even if it’s not a specific formula that’s inserted


There’s two recourses:One from the creditor to one of the solidary debtors, and that one debtor is responsible for the entirety of the debt (creditor’s recourse) Second recourse is the debtor that paid the creditor who will sue the other co-debtors for the amount that they technically owed (debtor’s recourse) They divide the debt between themselves, but the creditor can only ask it from one of the debtors.

89Nicole Spadotto

o What’s provided for by law? Example is solidarity of spouses for certain debts o The reason we have this stipulation of non-presumption is because solidarity

aggravates the situation of the debtors- Line two: solidarity is presumed between debtors of an obligation where it’s

contracted for the service or operation of an enterprise- Line three: defines what is covered by an enterprise

Elements of the regime of solidary obligations CCQ 1528: The creditor of a solidary obligation may apply for payment to any one of the co-debtors at his option, without such debtor having a right to plead the benefit of division.

- Links to justice: the creditor has a right to the totality of the payment (gives the creditor a choice)

- Solidarity is a fundamental and discretionary choice: the creditor of a solidary obligation can obtain payment from the co-debtor he chooses: he can collect the debt from the debtor he considers most solvent, for example

- We see a resurgence of divisional profit hereCCQ 1532: A creditor who renounces solidarity with regard to one of the debtors retains his solidary remedy against the other debtors for the whole debt

- Creditor has the latitude to renounce his right also (important principle as a fundamental choice of the creditor) – he may waive solidary obligations with respect to one of his debtors, but may retain his claim against the others for the full amount. This means the creditor will only collect his share of the debt from this debtor, and not the entire debt

- Creditor will be able to claim all the debt of the other co-debtors, minus the part he has sought from the co-debtor from whom he waived solidarity

- Creditor can waive this right without the other debtors being able to contest it, because the creditor has a right to recover

CCQ 1535: A creditor who sues a solidary debtor for his share loses his solidary remedy against him if the debtor acquiesces in the demand or is condemned by judgment.

- There exists a legal presumption Solidarity is a political term: it’s a system of mutualisation and sharing of the risk

- CCQ 1538: A loss arising from the insolvency of a solidary debtor is equally divided between the other co-debtors, unless their interests in the debt are unequal. / A creditor who has renounced solidarity with regard to one debtor, however, bears the share of that debtor in the contribution.

o This means, in the joint obligation, that the creditor bears the risk of insolvency of each of the debtors because they can only be held for their respective portion of the debt

o In solidarity, the risk of insolvency is borne by the solidary debtors, because the creditor can claim full payment of any of them

o This right has procedural repercussions, as seen in article CCQ 1529- CCQ 1529: An action instituted against one of the solidary debtors does not deprive

the creditor of his remedy against the others, but the debtor sued may implead the other solidary debtors.

o Solidarity is not only a right, but also a right of action for the creditor o This article is the procedural translation of the creditor’s right to claim the

totality to any of the solidary debtors, and that he may repeat the action in order to be satisfied

o With the second part of this article (“but the debtor sued may…”) enters us into the counterpart of the creditor’s rights: the rights of the solidary debtors

Debtor’s rights and actions in solidary obligations (defenses) CCQ 1530: A solidary debtor who is sued by his creditor may set up all the defenses that are personal to the debtor, as well as those that are common to all the co-debtors, but he may not set up defenses that are purely personal to one or several of the other co-debtors.

90Nicole Spadotto

- A defense is everything that makes it legally impossible for a creditor to claim payment or act immediately

- This is a complicated question marked with incertitude, and the doctrine isn’t fixed on it – the term can be a defense in some instances

o The text sets out several categories of exceptions: if the creditor claims the amount before the expiry of the term then the debtor may defend himself/herself (the defence here is the existence of a term means the obligation is not yet due). The term itself isn’t a common or personal exception. It depends on the position of the debtor.

- Jobin : means of defense (those which can be opposed by all and reach the debt as a whole, and those which concern one of the solidary co-debtors and can only be used by the co-debtor concerned)

o Those personal to the debtor (can be invoked): exception that the other solidary co-debtors cannot avail themselves of (only the co-debtor concerned can raise this defense)

The term that is properly part of the link between the debtor and creditor is part of a personal exception, like if a term exists for only one of the co-debtors (but this depends if the term is personal or not – ie, nullity of contract is common and not personal)

The text tells us that personal exceptions can be opposed by the co-debtor

o Those common to the solidary co-debtors (can be invoked) Defense for all the co-debtors. Type of exception benefits all solidary

co-debtors because it works at the level of the obligation itself This is all that concerns the nature or purpose of the common debt Ie, nullity of the contract (CCQ 1665), tacit surrender (CCQ 1689),

force majeure affecting all debtors (CCQ 1693), extinctive prescription (CCQ 2875)

o Those personal to other debtors (cannot be invoked) ** These means of defense are three categories, but there is opposition in two parts: the ones which are purely personal ones (can only be addressed by the solidary debtors concerned themselves) and the ones which reach the debt as a whole

The solidary co-debtor’s contribution to the debt CCQ 1536: A solidary debtor who has performed the obligation may not recover from his co-debtors more than their respective shares, although he is subrogated to the rights of the creditor.

- If one of the solidary co-debtors has paid the creditor, who ensures the obligation is extinguished, then each of the solidary debtors is released since the creditor is satisfied

o There is no longer a relationship between the solidary debtors and the creditor; however there remains the relationship between the solidary debtors

- If the payment made by the co-debtor is liberal in regard to the creditor – then it rests; the debt is not divided in the eyes of the creditor (thus, indivisible)

- The debtor who pays also has a recourse against the other co-debtors to restitute him in the obligation – this remedy is limited to the respective shares of his co-debtors (so whoever paid for the others can recover the other’s share)

- The importance is the payment is liberal re the creditor, but the debt still exists between the co-debtors – this means that can exercise the same action as the creditor, but can’t benefit from the action of solidarity

- Two reasons why it happens like this: o Principle of the obligation that solidarity regulates the relationship between

the solidary debtors and creditors. But between the solidary debtors, the obligation is joint and not solidary

91Nicole Spadotto

So that the solidary co-debtor who has paid can contact the other solidary co-debtors to recover on the merits all the shares that remain to be paid

o The co-debtor who made the payment for everyone made a payment for all the others – so in a way it’s an undue payment that he then needs back

Subrogate : to be put in the place of; so here, the debtor that pays can bring an action to be put in the place of the creditor as he pursues the others to pay him (but the debtor who is subrogated cannot benefit from the solidarity of the co-debtors)

CCQ 1539: A solidary debtor sued for reimbursement by the co-debtor who has performed the obligation may raise any common defenses that have not been set up by the co-debtor against the creditor. He may also set up defenses which are personal to himself, but not those which are purely personal to one or several of the other co-debtors

- Between the debtors themselves, not between the creditor and debtor

Obligation in solidum- Obligation in solidum is different from a solidary or joint obligation: it’s an

obligation of several persons each of whom is held liable for the whole to the creditor. This is the obligation for all co-debtors to pay the entire debt since they are at the origin of the same prejudice

- Obligation in solidum creates solidarity between the debtors: it’s an obligation of several persons each held liable to the creditor. Unlike solidarity, there is no legal relationship between debtors.

- Depends neither on a stipulation nor an effect by law- Justified by the fact that the purpose of the law of obligations it to simplify the

realization of debts - Not explicitly contained in the CCQ; must be inferred from doctrinal writings (as

done in Prévost-Masson) – in Quebec law, the obligation in solidum is recognized the same way as in French law

JOINT, DIVISIBLE, AND INDIVISIBLE CCQ 1518. An obligation is joint between two or more debtors where they are obligated to the creditor for the same thing but in such a way that each debtor may only be compelled to perform the obligation separately and only up to his share of the debt.An obligation is joint between two or more creditors where each creditor may only exact the performance of his share of the claim from the common debtor.

CCQ 1519. An obligation is divisible by operation of law, unless it is expressly stipulated that it is indivisible or unless the object of the obligation, owing to its nature, is not susceptible of division either materially or intellectually.

CCQ 1520. An indivisible obligation may not be divided, either between the creditors or the debtors or between their heirs.Each debtor or each of his heirs may separately be compelled to perform the whole obligation and, conversely, each creditor or each of his heirs may exact the performance of the whole obligation, even though the obligation is not solidary.

CCQ 1521. A stipulation of solidarity does not, in itself, make an obligation indivisible.

CCQ 1522. A divisible obligation binding only one debtor and one creditor must be performed between them as if it were indivisible, but it remains divisible between their heirs.

SOLIDARITY CCQ 1523. An obligation is solidary between the debtors where they are obligated to the creditor for the

92Nicole Spadotto

same thing in such a way that each of them may be compelled separately to perform the whole obligation and where performance by a single debtor releases the others towards the creditor.

CCQ 1524. An obligation may be solidary even though one of the co-debtors is obliged differently from the others to perform the same thing, such as where one is conditionally bound while the obligation of the other is not conditional, or where one is allowed a term which is not granted to the other.

CCQ 1525. Solidarity between debtors is not presumed; it exists only where it is expressly stipulated by the parties or provided for by law.Solidarity between debtors is presumed, however, where an obligation is contracted for the service or operation of an enterprise.The carrying on by one or more persons of an organized economic activity, whether or not it is commercial in nature, consisting of producing, administering or alienating property, or providing a service, constitutes the operation of an enterprise.

CCQ 1526. The obligation to make reparation for injury caused to another through the fault of two or more persons is solidary where the obligation is extra-contractual.

CCQ 1527. Where specific performance of an obligation has become impossible through the fault of one or more of the solidary debtors, or at a time when one or more of the solidary debtors are in default, the other co-debtors are not discharged from their obligation to make an equivalent payment to the creditor, but they are not liable for additional damages which may be owed to him.The creditor may not claim additional damages except from those co-debtors through whose fault the obligation became impossible to perform, and from those who were then in default for failing to perform it.

CCQ 1528. The creditor of a solidary obligation may apply for payment to any one of the co-debtors at his option, without such debtor having a right to plead the benefit of division.

CCQ 1529. An action instituted against one of the solidary debtors does not deprive the creditor of his remedy against the others, but the debtor sued may implead the other solidary debtors.

CCQ 1530. A solidary debtor who is sued by his creditor may set up all the defenses that are personal to the debtor, as well as those that are common to all the co-debtors, but he may not set up defenses that are purely personal to one or several of the other co-debtors.

CCQ 1531. Where, through the act or omission of the creditor, a solidary debtor is deprived of a security or of a right which he could have set up by subrogation, he is released to the extent of the value of the security or right of which he is deprived.

CCQ 1532. A creditor who renounces solidarity with regard to one of the debtors retains his solidary remedy against the other debtors for the whole debt.

CCQ 1533. A creditor who receives separately and without reserve the share of one of the solidary debtors and specifies in the acquittance that it applies to that share renounces solidarity with regard to that debtor alone.

CCQ 1534. Where a creditor receives separately and without reserve the share of one of the debtors in the periodic payments or interest on the debt and specifies in the acquittance that it applies to his share, he loses his solidary remedy against that debtor for the periodic payments or interest due, but not for any that may become due in the future, nor for the capital, unless separate payment is continued for three consecutive years.

CCQ 1535. A creditor who sues a solidary debtor for his share loses his solidary remedy against him if the debtor acquiesces in the demand or is condemned by judgment.

93Nicole Spadotto

CCQ 1536. A solidary debtor who has performed the obligation may not recover from his co-debtors more than their respective shares, although he is subrogated to the rights of the creditor.

CCQ 1537. Contribution to the payment of a solidary obligation is made by equal shares among the solidary debtors, unless their interests in the debt, including their shares of the obligation to make reparation for injury caused to another, are unequal, in which case their contributions are proportional to the interest of each in the debt.However, if the obligation was contracted in the exclusive interest of one of the debtors or if it is due to the fault of one co-debtor alone, he is liable for the whole debt to the other co-debtors, who are then considered, in his regard, as his sureties.

CCQ 1538. A loss arising from the insolvency of a solidary debtor is equally divided between the other co-debtors, unless their interests in the debt are unequal.A creditor who has renounced solidarity with regard to one debtor, however, bears the share of that debtor in the contribution.

CCQ 1539. A solidary debtor sued for reimbursement by the co-debtor who has performed the obligation may raise any common defenses that have not been set up by the co-debtor against the creditor. He may also set up defenses which are personal to himself, but not those which are purely personal to one or several of the other co-debtors.

CCQ 1540. The obligation of a solidary debtor is divided by operation of law between his heirs, except where it is indivisible.

CCQ 1541. Solidarity between creditors exists only where it has been expressly stipulated.It entitles each of them to exact the whole performance of the obligation from the debtor and to give a full acquittance for it.

CCQ 1542. Performance of an obligation in favour of one of the solidary creditors releases the debtor towards the other creditors.

CCQ 1543. A debtor has the option of performing the obligation in favour of any of the solidary creditors, provided he has not been sued by any of them.A release from the obligation granted by one of the solidary creditors releases the debtor, but only for the portion of that creditor. The same rule applies to all cases in which the obligation is extinguished otherwise than by payment thereof.

CCQ 1544. An obligation for the benefit of a solidary creditor is divided by operation of law between his heirs.

ALTERNATIVE OBLIGATIONSCCQ 1545: An alternative obligation is one which has two principal prestations as its object, the performance of either of which releases the debtor for the whole.An obligation is not considered to be alternative if, when it arose, one of the prestations could not be the object of the obligation.

CCQ 1546: The choice of the prestation belongs to the debtor, unless it has been expressly granted to the creditor.Where the party who has the choice of the prestation fails to exercise that choice, after receiving a demand requiring him to do so, within the time alloted to him, the choice of the prestation passes to the other party.

CCQ 1547: A debtor may neither perform nor be compelled to perform part of one prestation and part of the other.

94Nicole Spadotto

CCQ 1548: Where the debtor has the choice of the prestation and one of the prestations becomes impossible to perform, even through his own fault, he shall perform the one that remains.If, in the same case, both prestations become impossible to perform and the impossibility of performing either of them is due to the fault of the debtor, he is liable to the creditor to the extent of the value of the last prestation remaining.

CCQ 1549: Where the creditor has the choice of the prestation, he shall, if one of the prestations becomes impossible to perform, accept the remaining prestation unless the impossibility of performing it is due to the fault of the debtor, in which case the creditor has the right to exact specific performance of the remaining prestation, or reparation, by equivalence, for the injury resulting from the nonperformance of the prestation that has become impossible.If, in the same case, the prestations become impossible to perform and the impossibility of performing them is due to the fault of the debtor, the creditor may exact reparation, by equivalence, for the injury resulting from the nonperformance of either of the prestations.

CCQ 1550: Where all the prestations become impossible to perform through no fault of the debtor, the obligation is extinguished.

CCQ 1551: The obligation is an alternative obligation even where it has more than two principal prestations as its object, and the rules of this subdivision apply, adapted as required, to all such obligations.

CCQ 1552: A facultative obligation is an obligation which has only one principal prestation as its object but from which the debtor may release himself by performing another prestation.The debtor is released if the principal prestation, through no fault on his part, becomes impossible to perform

Prévost-Masson c. Trust GénéralFacts:P sold lots to a company, who then sold to 2639-1565 Quebec Inc. (making them all debtors in solidarity to payment owed to P for the property). When the payment was up, P instructed his accountant to prepare a statement of the account. The accountant (M) made an error, reducing the price of sales. The notary prepared the discharged and received payments based on this error. The numbered company didn’t attempt to correct this, even though they knew it was an error (thus, not in good faith). The accountant realized his error and provided a revised statement, but the numbered company refused to pay. P then brought an action against all the codebtors, M under professional liability, and the numbered company for not paying the difference.

Issues:Are the debts owed to P, from two different debtors (the numbered company and M) and arising from two separate sources (contractual and professional liability) to be considered indivisible, solidarity, or in solidum?

Judicial History:SC had found M's liability, canceled the release, and condemned all debtors in solidarity; SCC found the debt to be indivisible and condemned the debtors on those lines.

Decision:The appeal should be allowed in part.

Legal Reasoning:The professional liability of the accountant has been established. Appellants argument: defended the accountant on the basis that even though there was fault committed, the other constituent elements of civil liability were not present.

95Nicole Spadotto

Respondents said the accountant’s fault was proved, and the quantum of damages established. The CoA could find per the CCBC that the debt was indivisible because of the legal relationship between the co-debtors. The respondents wanted to prove that there had not been damage, but these documents are not on record. Question of causality:The law of extra-contractual or contractual liability doesn’t require only the finding of a fault, as damage and causality must also be proved. The professional liability of the accountant was established. On the date the discharge was signed, P’s legal relationship with the accountant crystallized. Due to the fault committed by the accountant, P lost his right to claim and the sureties associated with that right. P had a right of claim based on the accountant’s professional liability, and since damage was present and actual did not need to get remedies against debtors before bring action in professional liability. Courts have noted that an action may be brought immediately once the existence and quantum of damages have been established, even if the remedies against the other debtors hasn’t been exhausted. The accountant’s fault meant that P had a claim against the accountant in contract damages, but the numbered company was also indebted for unpaid balance. Problem of indivisibility: The sum of money was owed by two different debtors as a debt for K liability and as balance of selling price. Therefore, the relationship among the co-debtors must reflect the legal responsibilities each party in the situation created by the conflict (and reflects principles of law). To reflect the responsibilities in line with law, indivisibility is not a legally advisable approach. The debts involve a sum of money that are owned by two different debtors and arise from separate sources: the obligation to pay money is susceptible to division). The concept of passive joint and several liability doesn’t apply. In solidum is the only concept which applies – it allows for the legal problems arising from the relationship among co-debtors to be solved in accordance with the general principles of solidary liability. The accountant is thus liable in solidum with the numbered company. The accountant will pay P, and be relieved of his debt to P, and can claim an equivalent contribution from the numbered company.

Ratio:If there is more than one debt relating to a single object, it is a case of obligation in solidum and the debts will not be divided. As such, the creditor may look to any one of the debtors for payment and “the debtor who has paid is then subrogated in the right of the creditor against its co-debtor.”

Notes: La difficulté ici, est que les sources des obligations sont différentes mais les débiteurs sont solidaires pour la même obligation.

The object of the accountant: his contract of professional services The object of the buyers: their purchase agreement on credit Also, by default, the debts are divisible unless stipulated otherwise or the nature of the obligation.

The obligation here is monetary, so it’s not indivisible by nature. Whether the debts owed to P, from two different debtors and arising from two separate sources, are to be considered indivisible are whether they are properly regarded as an obligation in solidum. In solidum definition (from Chabas in the case): object of the debt is not divided when there is more than one debt for the whole amount. Each owes only the share, but payment can only be made in full so it cannot be divided.

When two debts relate to the same object, it allows the creditor to look to any one of the debtors for the payment. The debtor who paid is thus the creditor vis-à-vis the debtor who has not paid (my note: this places the original debtor central – and ensures he is getting paid for his debt – in a very “justice-y” way)

Baudouin et Jobin: purpose of in solidum is to clarify the law in circumstances where more than one debtor is liable for an identical object, not subject to secondary effects of joint and several liability. This category allows for expeditious determination of how two debtors for the same amount of money arising under separate legal instruments are each liable for the full amount…

“The concept of obligation in solidum allows for the legal problems arising from the relationship among the respondent’s co-debtors to be solved in accordance with the general principles of joint and several liability and the objectives of the law of obligations.” (from the case)

96Nicole Spadotto

Mazeaud et Chabas: “In solidary obligations, the object of the obligation is divided: there are several debts, each with a fraction; solidarity is based only on the mutual representation of the co-debtors. In the obligation in solidum, the object of the debt is not divided: there are several debts at all. In the indivisible obligation, there are several debts, each with a fraction, as in the case of solidarity, but it is impossible to divide the object of the obligation: payment can only be made in full. Each indivisible co-debtor is bound to perform the whole, not because he represents the others--he does not represent them--or because he has to do the whole--he has only his share, but because the object of the obligation is indivisible.”

Baudouin et Jobin: “Indeed, insofar as it is agreed that, since (perfect) solidarity is an exceptional regime, there will be (perfect) solidarity only when the legislator has expressly prescribed it or the parties have clearly agreed on it, and that the secondary effects of solidarity are not found in imperfect solidarity, the category seems to be intended to clarify the law in certain circumstances where debtors are liable for an identical object without being subject to the secondary effects of solidarity. Thus, the category of obligations in solidum makes it possible to quickly grasp how two debtors of the same amount of money, by virtue of separate legal acts not entailing perfect solidarity, are each bound to the full amount, and not to a share, and that full payment by one leads to the extinction of the claim and opens the right to a recourse against the other debtor.”

MacDonald and Brierley, “Quebec Civil Law” Complex modalities

- All obligations affected with a modality are called “complex” - but the diverse codal modalities themselves are characterized as “simple” or “complex”

- Where the obligation has many objects (ie, alternative obligations) or many subjects (solidary obligations), it is a “complex modality”

- The most basic form of obligation is one involving a single prestation owed by a single debtor to a single creditor - but many obligations have either many creditors or many debtors

- Some of these (not in Code) are when there are joint obligations, and when there are many discrete obligations: each creditor may only claim his or her share of the claim, and each debtor is responsible for paying only his or her share of the debt

- BUT it’s more likely and frequent that debtors especially will be obligated beyond their actual share - most often occurs with “joint and several” obligations (solidary obligations)

Solidarity- Solidarity may exist as between creditors or between debtors- An action is solidarity among several creditors when any one of them may exact the entire

performance from the debtor and thereby extinguish the obligation. Debtor must pay the full amount to any creditor he or she chooses, though a release given by one creditor may only be set up against the others for the amount actually due to that creditor

- Solidarity exists between debtors when the creditor can demand performance of the whole obligation from any one of them - the creditor is permitted, at will, to sue one, some, or all of the debtors

- Solidarity, therefore, protects the creditor from the insolvency or disappearance of one of the debtors, and facilitates collection by permitting a suit to be brought for the whole amount against the debtor upon whose assets realization is likely to be most easily effected

- When sued, each debtor can plead all defences that may be personal to him or her (ie, lack of capacity, lack of consent) as well as all defences common to the debtors together (ie, payment of the obligation, absolute nullity of the contract)

- Should a debtor perform or be compelled to perform an obligation in excess of his or her original share, the excess can be recovered from each of the other co-debtors to the extent of their respective shares

- Solidarity also produces what are called “secondary effects” - most important of these is that co-debtors are deemed to represent each other

- Putting a default of one solidary debtor is valid against the other debtors, and the interruption or suspension of prescription against one can be set up against all the others

97Nicole Spadotto

- The bearing of these secondary effects is especially important in situations analogous to those where solidarity arises, such as where debtors are held to the same creditor for distinct obligations, even though the object of the obligations remains identical

o Ie, one debtor may be bound to repair damage suffered by a creditor under a civil contract, while another debtor is liable for the same damage under a commercial contract or due to extra-contractual liability. Though there’s strong judicial authority for finding true solidarity in the above examples, given the presumption against solidarity in civil matter, it’s incorrect in principle to extend the regime to these cases

- Solidarity puts a heavy burden on debtors. They can be called to pay the whole of the debt, but may be unable to recover the shares owed by their co-debtors, wither because one or more of them is insolvent or untraceable. For this reason, generally, civil obligations are not presumed to be solidary, but only joint - each debtor is liable only for their share

- Solidarity will arise in contractual matters only where the parties expressly so stipulate, or where it’s clearly provided by law

Divisible and indivisible obligations- When an obligation may be divided: either among creditors who may claim its performance, or

among debtors who are bound to it- Divisibility and indivisibility is a characteristic of an obligation and not, as solidarity, a

characteristic of the relationship between parties to it- A divisible obligation is one, such as the obligation to pay a sum of money, that may, of its nature,

be divided. The characteristic of divisibility has no bearing on the relationship between initial debtor and creditor, but affects only the exigibility of the obligation either by the creditor’s heirs or as against the debtors heirs

- Though the underlying theoretical premise of the Code is that obligations are divisible, a premise reflected especially in the law of successions, this principle is nevertheless tempered in practice by specific codal provisions mandating indivisibility even for obligations capable of division

- In many cases, the effects of solidarity and indivisibility are identical. But the Code expressly states that the stipulation of solidarity doesn’t give an obligation the character of indivisibility, nor does indivisibility mean that an obligation has been contracted solidarity

- The principle effects of indivisibility are: each of the joint creditors may demand full payment of the obligation from the debtor, but no release by any one of them may be set up against the other creditors for more than that person’s share of the claim; 2) each of the joint debtors may be held liable for the whole debt, subject to a right to implead other joint debtors or to obtain contribution from them should the debt be paid in full

- What principally distinguishes indivisibility from solidarity is that indivisibility is a characteristic of the obligation itself, transmissible to a debtor’s or creditor’s heirs, where solidarity is characteristic of the relationship between parties to an obligation and may not therefore be invoked against their heirs

b. The effects of obligations Effects of obligations: all set out in the Code in a certain order, because there is a certain order to the Code

- We’re going to plunge into the interior of the Code to look at the effects of obligations and to counter confusions

- We must always talk about freedom, because the civil obligation is that we can only be bound by the law and a limited number of processes which are the sources of obligation. The debtor is bound to the creditor, who has a power of constraint over the debtor. This is where the idea of personal law comes in: a person in law has a patrimony, so it’s the patrimony which guarantees the creditor will be paid; the obligation gives the right to be paid on the goods.

- Effects of the obligation is to analyze the relationship of obligation from within and establish what the creditor’s rights are: 1) the creditor’s inherent rights; 2) the status of the creditor gives him inherent rights

98Nicole Spadotto

- The CCQ partly confuses the performance and effects of the obligation: the performance of the obligation is intended to terminate it, while the effects of the obligation is intended to cover the obligation that has not yet been performed

Two ways to approach the effects- 1) Concerning the effects of contracts and the effects of obligations

o The contract is the source of obligations, as its effect is to create, modify, or transmit obligations through time

Always keep in mind it’s a system where the patrimony is engaged (you must do one thing in exchange for another)

The contract is the place to transfer the obligation, the source of the obligations

o Effect of the obligation is something else: consists of analyzing the link of obligations, and establishes the rights of the creditor (effects of obligations respond to the question of what are the creditor’s rights?)

In Civil law, we need to decompose the contract to understand the link of obligations, which imposes a “to do” on the parties

We’re looking at special effects which are contractual - 2) The question of effect and execution/performance of the obligations

o Don’t confuse the effect of the obligation with the execution of the obligation o Execution of the obligation: the unrolling of the obligation, return to a normal

state (the action of the debtor which is to the satisfaction of the creditor and the liberation of the debtor, return to what the law of obligations considers the normal state of being, the liberty of the debtor)

o The mode of execution: normal execution of an obligation is payment (payment is synonym for execution. This can be a sum of money or the performance of an obligation. It’s an act of the debtor which satisfies the creditor – which returns the liberty of the debtor)

o The effects of the obligation is the effect of law on the interior of the obligation: simply, the effect of the obligation is the rights of the creditor

Three rights of the creditor (the effects of obligations) CCQ 1590: An obligation confers on the creditor the right to demand that the obligation be performed in full, properly and without delay. / Where the debtor fails to perform his obligation without justification on his part and he is in default, the creditor may, without prejudice to his right to the performance of the obligation in whole or in part by equivalence, (1) force specific performance of the obligation; (2) obtain, in the case of a contractual obligation, the resolution or resiliation of the contract or the reduction of his own correlative obligation; (3) take any other measure provided by law to enforce his right to the performance of the obligation.

- 1) To trigger forced execution/performance in kind (the right of exigibility). The fact of the obligation gives rise to the ability to force the execution (debtor is constrained)

- 2) The right to obtain damages in the case of inexecution or late execution of the obligation

- 3) The right to exercise certain actions to preserve the patrimony of the debtor to the benefit and juridical interests of the creditor

i. La demeure and forced execution Forced execution/performance in kind and philosophical ideas** Demeure is the prerequisite for obligation enforcement – this mobilizes two main ideas part of the philosophy of law:

- Question of liberty : liberty is implicated in forced execution because the creditor has the ability to constrain the debtor into a certain action. Forced execution directly implicates the patrimony of the debtor

99Nicole Spadotto

- Question of time : the right of the creditor in execution is a mechanism which permits the assurance of the right of execution (this is called the “demeure”). Before allowing the creditor’s right to enforcement, it’s necessary to consider timing (ie, intermediate period of the delay)

o Before the creditor has the choice to demand specific performance, the debtor must demeure, which is an intermediary period of “being late.” Demeure is a state of law – it’s when you have not executed the obligation, including by being late in executing it.

o Example: you’re a creditor of an obligation, for example in a contract of sale to deliver a statue that is the object of the contract. Must deliver in three weeks, as is the formal conclusion of the contract. The three weeks pass, the statue is not delivered. There is a temporal dimension. The inexecution takes time. The questions of demeure is at which moment do you effectively find an inexecution? This sequence particular in law of obligations is the demeure.

o There’s a distinction between demeure and mis-en-demeure. Demeure is “late.” It’s the official juridical situation of the debtor being late. The first step of inexecution. The mis-en-demeure is the act by which the debtor finds out they are in demeure. The difference between default and mise-en-demeure is timing

o Demeure and late in fact is not the same thing. The debtor can be late, without being in demeure. Example: the statue was supposed to be delivered within three weeks, four weeks pass and the creditor doesn’t have it, and the statute was delivered at week five. There was lateness in the execution of the obligation, but finally the creditor does not suffer consequence. The mis-en-demeure constitutes officially the lateness of the debtor, and is the first juridical manifestation of the state of inexecution. If the thing doesn’t arrive and the debtor is late, then they’re in demeure.

o Necessity of demeure: the temporal zone marks the progression in the law of inexecution. There is always a lapse of time between the conclusion of the act and the execution. So the creditor must wait

o Mis-en-demeure helps clarify the situation/respective positions of the parties (Baudouin, Jobin, Vézina). The formal notice officially records the debtor’s delay and is the first legal manifestation of the state of non-performance; if this doesn’t happen, you may well be a late debtor without being a debtor in default

There is not a contradiction between this and what’s stated in CCQ 1590, which sets out the creditor’s rights: “an obligation confers on the creditor the right to demand that the obligation be performed in full, properly, and without delay”

Delay is the trigger to ensure the right to enforcement: but the function of the text is to highlight the consistency of the creditor’s rights

Importance of the mis-en-demeure - To constitute the lateness/delay - To give the debtor the opportunity to execute their obligation - The creditor’s right to moratorium damages (the creditor will not be entitled to it if

he has not given the creditor formal notice. If the creditor has not given notice of default, it’s considered that he’s still giving credit, which consequently waives his right to moratorium damages/default damages)

Creditor’s choice to force execution after debtor’s demeure (CCQ 1590 fixes the right of the creditor) CCQ 1590(1): “An obligation confers on the creditor the right to demand that the obligation be performed in full, properly and without delay.”


Demeure is the state of being late. Not the same as being late, because being late is factual. Demeure is the juridical state of being late. Mis-en-demeure: notice of being late. Once you’ve gotten the mis-en-demeure, you’re in the state of demeure. The delay comes from a Latin word. The delay is the legal situation of the debtor’s delay which is necessary for all the measures to force enforcement to be deployed. This brings us back to the fundamental situation of the creditor: the creditor is someone who is waiting (awaiting the performance of the obligation) Creditors can be in demeure too by delaying in the delivery of the thing.

100Nicole Spadotto

- The fundamental text of the distribution of the effects of the obligation is CCQ 1590 – this gives the creditor a choice to determine the manner in which they will realize their right of execution of the obligation

o See this in language of CCQ 1590: “an obligation confers on the creditor the right to demand the obligation be performed in full…” (the RIGHT to demand indicates the choice the creditor has to take the right or not)

o Note that the specific performance is listed first, as the first choice in the CCQ: not a secondary remedy

o The “without delay” is a triggering element to the right of execution. It functions to illuminate the consistency of the rights of creditors. It’s not for the immediate goal of putting in place the realization of this right, but it indicates the principle.

CCQ 1590(2): “Where the debtor fails to perform his obligation without justification on his part and he is in default, the creditor may, without prejudice to his right to the performance of the obligation in whole or in part by equivalence”

- The text says that obligation confers total execution without lateness. If there’s lateness, the debtor is in demeure

- Where the debtor, without justification, fails to perform his obligation and is in default, the creditor can 1) force performance in kind of the obligation; 2) obtain, if the obligation is contractual, the termination of the contract or his own correlative obligation; 3) take any other means provided by law for the implementation of his right and performance of the obligation

The source of demeure (CCQ 1594-1597) – the formal notice is presented in four ways, each of which is linked to a different source

- Juridical act of contract- Extra-judicial juridical act- Demand of justice - The law/plein droit

First source of demeure: terms of the contract itself (question of both passage of time and the term)CCQ 1594(1): A debtor may be in default for failing to perform the obligation owing to the terms of the contract itself, when it contains a stipulation that the mere lapse of time for performing it will have that effect.

- First element of clarification: here, the term is not the modality of the obligation, but stipulation (framework of the contract designed by the parties). The constitution of the debtor’s demeure is the result of contract stipulation

- Second clarification: the time here is a question of the term (modality, suspensive). o BECAUSE the typical contract which permits a default is through stipulation

of a term – as in a modality. The term is precisely the function of subordinating the exigibility of the obligation to a point in time (there’s a time by which to do the obligation, as designated by the term, so the lateness is subordinate to a future and certain event). The term does not have as its object the demeure. It has as its object the lateness of exigibility (a lateness subordinated to a future and certain event).

The function of the term is to make the payable obligation conditional on the passage of time. The mere passage of time will have the effect of giving notice when it’s stipulated that a mere passage of time will have the effect of notice (stipulation must have as its object the demeure)

o But attention! Don’t think that the presence of the term automatically constitutes a demeure by fact of the contract. There must be a stipulation precisely intended to constitute a formal notice by the expiry of the contractual time (a clause in the contract which indicates that if the debtor

101Nicole Spadotto

fails to perform his obligation within the agreed upon period, he is in default). If the debtor doesn’t execute their obligation in the delay strictly stipulated by a clause, they are considered in demeure.

o A second possibility is a stipulation that necessarily implies a formal notice, but gives particular emphasis on the time limit of the execution (a stipulation that will almost indissolubly link the usefulness of the contract to its performance over time)

Ie, ordering a marble statue for a particular event; it’s obvious that if one stipulates in the contract that the reason d’être is the delivery for this particular day. If the debtor delivers the statute the next day, the debtor is in default

Second source of demeure: extrajudicial demandCCQ 1594(2): A debtor may also be put in default by an extrajudicial demand to perform the obligation addressed to him by his creditor, a judicial application filed against him or the sole operation of law.

- Lays out principle of extrajudicial demand to perform the obligation CCQ 1595: An extrajudicial demand by which a creditor puts his debtor in default must be made in writing. / The demand must allow the debtor sufficient time for performance, having regard to the nature of the obligation and the circumstances; otherwise the debtor may perform the obligation within a reasonable time after the demand.

- Article clarifies what the extrajudicial demand looks like: must be in writing, formulated in a way sufficient to be explicit (ie, mis-en-demure)

- The mis-en-demeure must also give debtor a sufficient delay in execution in regard to the circumstances and nature of the obligation – the mis-en-demeure commands the demeure. The mis-en-demeure leaves open the possibility for the debtor to execute the obligation. A formal notice makes it possible to officially record the debtor’s delay, allowing possibility for debtor to perform (reasonable delay is a temporal zone where it’s possible to execute the obligation)

o This is because the debtor may not be aware that he’s late or in default. The formal notice is used to record the delay in execution and to formally record the non-performance

o It clarifies the position between the parties, but also allows for the possibility of execution over time (mis-en-demeure opens a time zone between execution and non-performance, called the demeure)

o The buffer zone is intended to both inform the debtor of his creditor’s with to obtain performance of the obligation, but also to implement measures which make it possible to ensure such a performance. This period also gives the debtor the possibility to perform his obligations, except in cases where the contract (the relationship between the parties) justifies that such a period doesn’t exist

o The formal notice must give the debtor the opportunity to perform the obligation

Third source of demeure: demand of justiceCCQ 1596: Where a creditor files a judicial application against the debtor without his otherwise being in default, the debtor is entitled to perform the obligation within a reasonable time after the demand. If the obligation is performed within a reasonable time, the costs of the demand are borne by the creditor

- Three points to see here:o Demand of justice: formed by the creditor against the debtor, without the

latter having been otherwise hailed by a prior formal notice or being in demeure. This is the equivalent of mis-en-demeure (formal notice)

102Nicole Spadotto

o Confers on the debtor the right to execute the obligation with a reasonable delay: the function of the demeure is the right for the debtor (right for them to execute during this period)

o Importance of the idea for the debtor to execute is that if the obligation is executed during a reasonable delay, the costs of the demand are borne by the creditor. The creditor supports the financial risk in the name of justice

Fourth source of demeure: sole operation of law/plein droitCCQ 1597: A debtor is in default by the sole operation of law where the performance of the obligation would have been useful only within a certain time which he allowed to expire or where he failed to perform the obligation immediately despite the urgency that he do so.

- The law augments the intensity of this mis-en-demeure – the debtor is in demeure by fact of law, because there was an urgency in the obligation (where it’s certain that the inaction of the debtor creates possible damages; sanctioned by a mis-en-demeure by plein droit)

- This is when the obligation is only useful if it’s performed within a certain period of time – and the execution isn’t useful after a certain date

- Ie, inaction by the owner of the apartment you’re leasing, when there’s a leak in the roof, must be sanctioned by mise-en-demeure en plein droit since there was urgency

CCQ 1597(2): A debtor is also in default by operation of law where he has violated an obligation not to do, or where specific performance of the obligation has become impossible through his fault, and also where he has made clear to the creditor his intention not to perform the obligation or where, in the case of an obligation of successive performance, he has repeatedly refused or neglected to perform it.

- Fault or negligence of the debtor – the demeure fundamentally serves the possibility of the debtor to execute the obligation. When it becomes apparent from the debtor’s attitude that he caused the non-performance, there’s no need to give him a supplementary delay/additional time limit

CCQ 1598: The creditor shall prove the occurrence of one of the cases of default by operation of law notwithstanding any statement or stipulation to the contrary.

- Creditor must prove that one of these cases (source of demeure) exists

CCQ 1599: An extrajudicial demand by which the creditor puts one of the solidary debtors in default has effect with respect to the other debtors.Similarly, an extrajudicial demand made by one of the solidary creditors has effect with respect to the other creditors.

- Formal notice applies to solidary parties (creditors and debtors) - This is part of the side effects of solidarity

Effects of demeure CCQ 1600: Where the subject of the obligation is a sum of money, the debtor, although he may be granted a period of grace, is liable for injury resulting from delay in the performance of the obligation from the moment he is in default. / The debtor in such a case is also liable from the same moment for any loss resulting from superior force, unless he is released thereby from his obligation.

- Two effects: - Damages : the debtor is liable for injury resulting from delay in the performance of

the obligation when the obligation’s subject is a sum of money. o The formal notice marks the starting point of the moratorium

damages/default damages (ie, damages whose function it is to compensate for the damage resulting from the delay in performance)

o Delay in performance must cause damage and the obligation must be for a sum of money. Links to civil responsibility – which is why the text asks for the necessity that the lack of performance of an obligation causes prejudice.

103Nicole Spadotto

- Transfer of risk : formal notice also leads to a transfer of risko The debtor is also liable for force majeure, unless liberated from his

obligations (not crucial) o The thing to get out of it is that the mis-en-demeure transfers the risk (the

debtor responds to the risk. The risk is the particular effects of certain contract, and notably the transfer of property by contract. The risk is the risk of the destruction of the object of the contract). With mis-en-demeure (formal notice), the risk is transferred to the debtor. Risk includes risk of destruction

** Will refuse the creditor his rights if the debtor is not in default, and it is not the time of the execution of the obligation.

CCQ and a moral vision of the law of obligations - Pacta sunt servada : the value of the given word. I have your word that you will

perform this obligation (moral vision of the law of obligations), so you have to be held to it

- Liberty : civil obligations is a world of rights. We are obligated by the link of law, and so we operate in a limited manner (which limits our liberty). Obligations are a political constraint on the debtor.

o The concrete translation of the limit: obligations confer a personal right/law on the person. This is the patrimony, which guarantees the person will make the payment.

o In executing the prestation, the “must do” is imperative – you’re obligated because it’s an imperative (links to performance in kind/forced execution)

o A way to uphold the will of the parties is to insist on the performance of the obligation to which they agreed

Forced execution in “cases which admit of it” CCQ 1601: A creditor may, in cases which admit of it, demand that the debtor be forced to make specific performance of the obligation.

- This is a nuance of the Code for the regime of obligations. It’s fascinating, because CCQ 1590 does not leave room for “cases which admit of it,” so this leaves interpretation of the judge to determine if the case permits

- What are “cases which admit of it?” When it is not necessary to implicate the extra-patrimonial elements of a person. Cases which admit of it are cases which permit a guarantee and can be satisfied by another (“replacement execution”/l’exécution de remplacement). Can also be when the prestation of execution is no longer realizable (per Lluelles et Moore)

o Note : Quebec courts will not order specific performance when: 1) when it requires physical force (ie, it’s an obligation to do something; courts will enforce obligations not to do something); 2) supervision (when courts need to unduly supervise the execution, but courts will frame the order with sufficient precision to get around this); and 3) hardship (purpose of the law is not to punish wrongdoing, but tends to only be enforced when third parties rights are adversely affected)

o The judge could decide a case which permits of it based on 1) realism (judge decides based on political functions); or 2) formalism (judicial decisions are determined based on the system of law)

CCQ 1602: Where the debtor is in default, the creditor may perform the obligation or cause it to be performed at the expense of the debtor. / A creditor wishing to avail himself of this right shall so notify the debtor in the judicial application or the extrajudicial demand by which he puts him in default, except in cases where the debtor is in default by operation of law or by the terms of the contract itself.

- There’s an intermediary zone. If a creditor wishes to avail himself of the right that the obligation can be satisfied by another, he needs to notify the debtor. Can ask for specific performance in certain cases

104Nicole Spadotto

- Creditor cannot avail himself except when the debtor is in default by the operation of law or terms of the contract

- Baudouin, Jobin, et Vézina: to invoke this sanction, the creditor must notify by a mis-en-demeure prior to the performance to be executed at the expense of the debtor, expressly inform the debtor of the alleged breaches, invite the debtor to comply, and inform him of the sanction that will be applied if the debtor fails to comply with the time limit. The creditor who deprives the debtor of the ability to perform his obligation or to declare his inability to perform, in the absence of prior mis-en-demeure or following from a deficient mis-en-demeure, may not claim from the debtor the costs incurred by the replacement performance, unless he takes advantage of a case of default by virtue of the law or contract.

SPECIFIC PERFORMANCE CCQ 1590: An obligation confers on the creditor the right to demand that the obligation be performed in full, properly and without delay.Where the debtor fails to perform his obligation without justification on his part and he is in default, the creditor may, without prejudice to his right to the performance of the obligation in whole or in part by equivalence,(1) force specific performance of the obligation;(2) obtain, in the case of a contractual obligation, the resolution or resiliation of the contract or the reduction of his own correlative obligation;(3) take any other measure provided by law to enforce his right to the performance of the obligation.

CCQ 1591: Where the obligations arising from a synallagmatic contract are exigible and one of the parties fails to perform his obligation to a substantial degree or does not offer to perform it, the other party may refuse to perform his correlative obligation to a corresponding degree, unless he is bound by law, the will of the parties or usage to perform first.

CCQ 1592: A party who, with the consent of the other contracting party, has detention of property belonging to the latter has a right to retain it pending full payment of his claim against him, if the claim is exigible and is closely related to the property of which he has detention.

CCQ 1593: The right of retention may be set up against anyone.Involuntary dispossession does not extinguish a right of retention; the party exercising the right may revendicate the property, subject to the rules on prescription.

CCQ 1594: A debtor may be in default for failing to perform the obligation owing to the terms of the contract itself, when it contains a stipulation that the mere lapse of time for performing it will have that effect.A debtor may also be put in default by an extrajudicial demand to perform the obligation addressed to him by his creditor, a judicial application filed against him or the sole operation of law.

CCQ 1595: An extrajudicial demand by which a creditor puts his debtor in default must be made in writing.The demand must allow the debtor sufficient time for performance, having regard to the nature of the obligation and the circumstances; otherwise the debtor may perform the obligation within a reasonable time after the demand.

CCQ 1596: Where a creditor files a judicial application against the debtor without his otherwise being in default, the debtor is entitled to perform the obligation within a reasonable time after the demand. If the obligation is performed within a reasonable time, the costs of the demand are borne by the creditor.

CCQ 1597: A debtor is in default by the sole operation of law where the performance of the obligation would have been useful only within a certain time which he allowed to expire or where he failed to perform the obligation immediately despite the urgency that he do so.

105Nicole Spadotto

A debtor is also in default by operation of law where he has violated an obligation not to do, or where specific performance of the obligation has become impossible through his fault, and also where he has made clear to the creditor his intention not to perform the obligation or where, in the case of an obligation of successive performance, he has repeatedly refused or neglected to perform it.

CCQ 1598: The creditor shall prove the occurrence of one of the cases of default by operation of law notwithstanding any statement or stipulation to the contrary.

CCQ 1599: An extrajudicial demand by which the creditor puts one of the solidary debtors in default has effect with respect to the other debtors.Similarly, an extrajudicial demand made by one of the solidary creditors has effect with respect to the other creditors.

CCQ 1600: Where the subject of the obligation is a sum of money, the debtor, although he may be granted a period of grace, is liable for injury resulting from delay in the performance of the obligation from the moment he is in default.The debtor in such a case is also liable from the same moment for any loss resulting from superior force, unless he is released thereby from his obligation.

CCQ 1601: A creditor may, in cases which admit of it, demand that the debtor be forced to make specific performance of the obligation.

CCQ 1602: Where the debtor is in default, the creditor may perform the obligation or cause it to be performed at the expense of the debtor.A creditor wishing to avail himself of this right shall so notify the debtor in the judicial application or the extrajudicial demand by which he puts him in default, except in cases where the debtor is in default by operation of law or by the terms of the contract itself.

CCQ 1603: The creditor may be authorized to destroy or remove, at the expense of the debtor, what has been done by the debtor in violation of an obligation not to do.

CCQ 1604: Where the creditor does not avail himself of the right to force the specific performance of the contractual obligation of the debtor in cases which admit of it, he is entitled either to the resolution of the contract, or to its resiliation in the case of a contract of successive performance.However and notwithstanding any stipulation to the contrary, he is not entitled to resolution or resiliation of the contract if the default of the debtor is of minor importance, unless, in the case of an obligation of successive performance, the default occurs repeatedly, but he is then entitled to a proportional reduction of his correlative obligation.All the relevant circumstances are taken into consideration in assessing the proportional reduction of the correlative obligation. If the obligation cannot be reduced, the creditor is entitled to damages only.

CCQ 1605: A contract may be resolved or resiliated without judicial action where the debtor is in default by operation of law for failing to perform his obligation or where he has failed to perform it within the time set in the demand putting him in default.

CCQ 1606: A contract which is resolved is deemed never to have existed; each party is, in such a case, bound to restore to the other the prestations he has already received.A contract which is resiliated ceases to exist, but only for the future.

Baudouin, Jobin, Vézina, “La demeure” (defaulting)INTRO :

- Before claiming the sanction of the non-fulfillment of an obligation, whatever the source, the creditor must ensure that his debtor is in default of complying with the obligation (section 1590(2)). CCQ).

106Nicole Spadotto

- This state - that of being in default - does not always require an initiative of the creditor. The principle is that the creditor transmits a formal notice to the debtor, but it could also happen that the notice is formal notice by the terms of the contract itself (judicial application) or by the sole effect of the law (article 1594 CCQ).

- In spite of the apparent simplicity of the principle, the residence poses to the jurists complex problems, which are particularly due to the fragile balance between the debtor's right to a last chance to execute, and the interest of the creditor for a simplification of the process intended to punish the non-fulfillment of the obligation.

- The legislator, during the reform of the Civil Code , sought to adjust the practice according to these two main tensions, without answering all the questions raised by this aspect of the implementation of the right to the execution of the obligation.

NATURE: - The formal notice, which constitutes the regime of general application, consists of a solemn

warning that the creditor intends to claim his due and which, upon expiry of a sufficient period, or reasonable period, will cause the debtor to need to pay

- Formal notice and demeure do not coincide in time because of the very exigency of this delay, which is due as much in the implementation of remains an extrajudicial demand (section 1595(2) CCQ) and a judicial one (section 1596 CCQ).

- In principle, the mere lapse of time does not have the effect of constituting the debtor in default (demeure). As a result, the unsatisfied creditor must usually put his debtor on notice before resorting to any of the sanctions available to him. This principle is good regardless of the contractual or legal source of the obligation

- This general rule, however, knows many exceptions under which the creditor is not required to give notice to the creditor, which includes cases of stay under the terms of the contract, as well as legal grounds for exemption that are, in part, the result of jurisprudential developments.

- The formal notice is the act by which the creditor, at the end of the obligation, formally notes the default or the delay of his debtor to pay.

- It serves to clarify the respective positions of the parties and serves several functions. First, it is a warning on the part of the creditor that he is preparing to demand the execution of the obligation in court, if need be. It also constitutes a formal notice that the creditor does not intend to tacitly extend the time granted to the debtor to execute.

- The formal notice is a reminder, sometimes useful, that the time is up. This ultimate reminder to the defaulting debtor constitutes an application, thus secured creditor in the performance of the obligation (Article 1375 CCQ) and avoids unnecessary judicial proceedings

- By focusing on the debtor's right to a last chance, the legislator Quebec is aligned with a strong current in modern legislation in favor of a debtor right to remedy his defect (or “right to cure”).

- The law provides for two main forms of formal notice: extrajudicial demand (article 1595 CCQ), which is by far the most used form in practice, and the legal claim (article 1596 CCQ)

Extrajudicial Notice - The Code now states that the out-of-court request must be written in all cases (article 1595, paragraph 1 CCQ), regardless of whether the obligation results from a written or verbal contract.

- There is no sacramental formula for formal notice and the courts refrain from any formalism.- In order for it to have a real legal significance, the extrajudicial notice must state, albeit

succinctly, the existence of the obligation claimed by the creditor, the nature of the breaches- The creditor must also indicate in the formal notice the period during which he considers that the

debtor can still complete the obligation. This period must be reasonable and therefore give the debtor sufficient time, having regard to the nature of the obligation and the particular circumstances of the case. For example: a delay of ten or fifteen days could be considered acceptable for certain forms of obligation, for example the payment of a pecuniary debt; on the other hand, the same period could be considered insufficient for other forms of obligations, in particular if it concerns the correction of a benefit in kind which presents a certain level of

107Nicole Spadottocomplexity

- If the notice does not mention any specific time limit or if the time allowed is insufficient, the debtor benefits from the sole fact of the law of a delay of execution which will be determined a posteriori by the court (Article 1595, 2nd line CcQ)

- In case of dispute, it is also the court that will decide, a posteriori , on the presence of the elements the formal notice and the sufficiency of the time allowed.

- However, there is one remedy in which the courts are particularly demanding and for which the absence of prior notice will be fatal, unless the circumstances justify a stay by operation of law or contract. This is the replacement in kind, whereby the creditor executes the obligation himself or, in most cases, perform by a third party, at the expense of the debtor (article 1602 CCQ).

- Certain texts, in the Code or in particular laws, provide for specific forms of arrest of the debtor by the unsatisfied creditor. Designated under different names, such as "prior notice", "notice" or "termination", these forms are usually subject to a specific regime.

- A formal notice may be required of the buyer, in addition to the denunciation itself, when it merely discloses the infringement of the right of ownership or the defect, without formulating a request for execution essential to the validity of any formal notice

- Another common feature found in jurisprudence, the denunciation does not call formalism particular, and in the same way as for the formal notice, the courts focus rather on essential elements of its content. In general, this flexibility observed in case law, which is manifested by certain borrowings from the rules of the extrajudicial notice in the matter of whistle-blowing, we consider it judicious in the light of the principle of good faith in the performance of the obligation (Article 1375 CCQ).

Legal notice - The legal action consists of the assignment of the debtor to claim the performance of the service which is the object of the obligation, the resolution or termination of the undertaking, a conviction for damages -interest or any other penalty made available to the creditor. The reform codified the jurisprudential interpretation that the legal action is a valid form of notice (section 1594 (2) CCQ)

- As a general rule, the summons clearly shows the creditor's desire to demand payment. The nullity of the procedures undertaken for lack of form does not affect the effects produced by this formal notice. On the other hand, the legal claim instituted by the creditor must, in order to remains to claim execution in a sufficiently clear and unobjectionable manner to the debtor's performance.

EXEMPTIONS FORM FORMAL NOTICE: - General observations - The legislature has enacted certain exceptions to the general rule of

formal notice, sometimes because the granting of a recall with a time limit would be unnecessary, sometimes because this would favor a debtor with reprehensible behavior

- In practice, it is common practice to encounter in some contracts a clause whereby the mere arrival of the maturity of the obligation has the effect of constituting the debtor in default, which exempts the creditor of the sending of a formal notice.

- The wording of article 1594 CCQ, in view of the fact by the terms of the contract, is not ideal. In fact, this aspect was added in the wake of parliamentary proceedings on Bill 125,

- The article mentions the stipulation that the mere lapse of time will have the effect of constituting in such a way as to avoid guaranteeing the debtor a "right to delay" in defiance of its contractual commitments, the debtor in default, which mainly evokes the hypothesis of a total default of execution

- Should be noted that such a stipulation, even if permitted, could raise considerable evidentiary problems, especially in cases where the creditor has already carried out remedial work and removed from the debtor any chance of finding them; in case of doubt as to the scope of the evidence, the debtor should then be given priority, given that the creditor has the burden of proving the facts which dispense him from putting his debtor in default, in the extension of article 1598 CcQ

- It should not be automatically inferred from the presence of a residency clause by the terms of the contract that the creditor may act in an arbitrary or abusive manner towards the debtor wonder if

108Nicole Spadottothe parties can go further and also predict the home by the terms of the failed.

- In a significant number of cases, the dwelling is the result of effect of the law, rather than the will of the parties. The main cases of opening the house, which can be qualified as "as of right" in the true sense of the term, are set out in Article 1597 CCQ.

- The first paragraph of this provision contains two distinct assumptions that each hold account of the time factor to dispense the creditor from a formal notice. This paragraph provides firstly that the debtor is constituted by default by the sole effect of the law when the obligation could usefully be executed only in a certain period of time

- That being said, despite this waiver of notice of the original obligation, if the breach of that obligation gives rise to a claim for damages, the extrajudicial notice - or failing that, the formal judicial notice of summons - will be required to mark the point of departure for the execution for the equivalent

- The second hypothesis envisaged in the first paragraph differs somewhat from the previous one, to the extent where it concerns a benefit which has been urgently required, whereas the debtor does not could run immediately. It is important to highlight the difficulty that can present the interpretation of the notion of urgency for the purposes of the application of this rule. It seems certain that immediate risk of harm to the health or safety of persons or the integrity of property is likely to be of an urgent nature.

- The second paragraph of article 1597 CCQ sets out four other cases of opening of residence by the sole effect of the law.

o The first case concerns the breach of a legal or conventional obligation not to do such a non-compete obligation.

o The second case envisaged in this paragraph concerns the debtor who, by his fault, rendered execution in kind impossible.

o The following two cases set out in the second paragraph of article 1597 CCQ result from the codification, during the reform, of rules emerging from previous case law.

It is first the debtor who is constituted by default by the sole effect of the law when he clearly indicates his intention not to perform the obligation. This form of repudiation of the obligation is similar to the anticipatory breach of the common law.

The last case provided for in the second paragraph of article 1597 CCQ, which also constitutes a codification of pre-reform case law, ensures that the creditor of a successor or subsequent performance obligation is not obliged to put his debtor in default after each due date, and that the latter will therefore be in default if he refuses or neglects to execute repeatedly

- 1597 CCQ must therefore be interpreted with some flexibility. With this in mind, it seems to us more appropriate to allow the application of this provision to various factual situations, ensuring that the objectives of the home are respected by the sole effect of the law - that is, not to favor a debtor who adopts Condemnable conduct and not to oblige the creditor to a procedure that would be useless in fact is based on the idea that the notice must be of any use - that to multiply the creation of new jurisprudential exemption categories

EFFECTS: - Defaulting produces different effects. Thus, it allows the creditor to assert the sanctions that are

recognized because of the unjustified breach of his debtor, by judicial or extrajudicial. It is, in principle, the starting point for damages for default. Finally, it prevents the debtor's exemption when the impossibility of performance results from a force majeure.

- The default falls within the context of the implementation of the right to performance of the obligation. The creditor is therefore not obliged to put his debtor on notice when he alleges the nullity of his commitment or the reduction of the obligations resulting from a lack of formation of the contract, rather than the non-fulfillment of an obligation validly born of this contract not required to put his debtor on notice when he claims the exception of non-performance or the right of retention, which are not penalties per se, but rather on the debtor for execution or pending the sanction of its non-performance.

109Nicole Spadotto

- The case-law also requires, in a synallagmatic contract, that the creditor who puts his debtor in default to perform his obligation, in order to assert the penalties that the law recognizes, is himself ready to execute in accordance with the law. offering the promised service and participating in good faith in the fulfillment of the reciprocal obligations of the parties to the contract. Failure to offer one's own benefit will expose it to the risk of being opposed by the exception of non-performance (Article 1591 CCQ)

- Default damages are intended to compensate the creditor dissatisfied with the loss suffered as a result of the delay in the performance of the obligation, notably through the granting of interest (articles 1617 and 1618 CCQ) which will be accompanied appropriate, the additional indemnity (article 1619 CCQ).

- The new law presents two great distinctions in this respect, compared to the earlier law. On the one hand, the starting point of the calculation is no longer the formal notice (in the case of a pecuniary obligation) or the assignment (for the non-performance of an obligation other than the payment of a sum of money), but rather, as a general rule, the occurrence of the distinct abode according to the contractual or tortious source of the obligation, since from now on the applicable regime is rather established according to the pecuniary or other nature of the obligation the creditor complains of non-performance (articles 1617 and 1618 CCQ).

- Charge of risks - The residence obstructs the discharge of the debtor, for any non-performance attributable to a force majeure which is posterior to it, except in certain cases where it is otherwise released second paragraph of article 1600 CCQ does not state in words, it seems that the granting of a grace period to the debtor cannot prevent the transfer of risk, unless the period granted by the creditor is rather analyzed as an extension of the term of law.

Key short notes:- The demeure poses to jurists complex problems: notably the fragile equilibrium between the right

of the debtor to a last chance to execute, and the interest of the creditor for a simplification of a process destined to sanction the inexecution of the obligation

- Demeure comes from Latin “mora” which signifies “lateness.” This represents the state where the default of execution is officially established

- The mise-en-demeure consists of a notice where the creditor can reclaim his due and which, in the expiration of the sufficient delay (where reasonable), will cause the debtor to be in default

- In giving the debtor a last chance, the Quebec legislature aligns with the modern legislation in favour of a right to the debtor to remedy their default (or a “right to cure”)

- If the notice doesn’t mention a specific delay or if the accorded delay is insufficient, the debtor benefits by the mere fact of the law from an execution period which will be determined a posteriori by the court (art. 1595, para. 2 C.C.Q.) (4)

- In the event of a dispute, it is also the court which will decide, a posteriori, on the presence of the essential elements of the formal notice and the sufficiency of the granted execution period. The facts must also show that this right to a faint hope has indeed been offered and that, in accordance with the duty of good faith underlying the formal notice, the creditor has not obstructed the debtor's performance during the period available to him under the law

- The requirement of a formal notice must not constitute a formalistic approach enabling the debtor to avoid the consequences of his non-performance, but rather a tool likely to promote good faith in the performance of the obligation.

MacDonald and Brierley, “Quebec Civil Law”DEFAULTING / DEMEURE

- Must qualify the literal reading, which suggests that reparation for a breach of an obligation (specific performance or damages) can’t be obtained until the debtor is formally put into default (the debtor is informed that the creditor won’t tolerate further delays in the performance of the obligation due)

- Default requirement is not applicable to extra-contractual claims, nor contractual claims in nullity or for reduction of obligation (latter two don’t suppose breach of an obligation)

110Nicole Spadotto

- Also, parties to a contract may fix the conditions of a default, so the principle that reparation cannot be formally obtained till the debtor is formally in default only applies when the parties haven’t fixed the conditions

- Putting in default normally occurs by means of a creditor delivering a written notice demanding performance to the debtor (also other forms of putting in default, such as judicial notice)

- Purposes and effects of putting someone in default: default changes the bearer of the risk in event of impossibility of performance of the obligation (risk of loss no longer falls on the purchaser, for example, but rests with the seller); it also fixes the moment at which performance is due, and at which legal interest or damages agreed to by the parties may be claimed by the debtor

Lluelles et Moore, “L’exécution en nature”- Indirect execution (execution by equivalent): it’s possible to obtain a realization of the prestation in

an indirect manner (money). Can also get a direct execution- Is the direct execution an exceptional recourse or a principle recourse? It might happen that the

creditor thinks inexecution isn’t satisfied by financial indemnisation. However, there’s a condemnation associated with damages for violating the engagement that never happened

o The principle of free choice: it’s normal to have choice between the enforcement in kind and other remedies – if the creditor opts for resolution or resiliation of the contract, he cannot at the same time opt for execution of it

- Execution in kind and the progressive recognition by contemporary law: execution in kind constitutes without context the most sufficient way for the creditor to obtain exactly what they were waiting for – thus it’s the ideal recourse

o But during a long period Quebec courts proved a big resistance to this sanction and considered it an exceptional recourse – like CML attributed remedial damages and execution in kind was conceded as exceptional and to be awarded in a discretionary manner (like specific performance)

o Today, after recommendations from the office of the revision of the Civil Code, the contemporary codification privileges execution in kind

- The enactment of direct execution in kindo Direct execution in kind is fundamental and normal, there are still the same reservations as

under the old Code (CCBC) – the recourse is offered to the creditor in cases which permit of it (CCQ 1601). What is a case which permits of it in jurisprudence? Essentially cases that can be the subject of a forced execution, in case of resistance of the debtor to the judgment requiring him to perform.

o We can group cases of impossibility of constraint in two major categories: either that the performance to be performed no longer has any purpose, or that its performance by force would require the active participation of the debtor's own person

- Paragraph I: the prestation of execution is no longer realizable, lack of purpose or interest

o In some examples, the creditor will have to fight for other recourses – he wants to invoke a resolution of the contract. In some cases, execution in kind is not possible: execution in kind cannot be conceived if the non-performance has created an “irreversible situation”. Interest damages is envisioned in these cases

- Paragraph II: forced execution of the prestation requires active participation of the debtor

o Values: liberty of person and respect for your word – judges exclude from direct execution in kind the prestations which, for their forced execution, require active participation of the debtor (link to imprisoning/constraining the body)

Ie, you can’t force a specific opera singer to sing, even if they have a contract to do so

- The difficulty of the problem: two values at play in the liberty of the person (reinforced by the Charter of Rights) and respect for giving your word (reinforced by CCQ 1458) – judges arbitrate between these two values

o Even though protecting the liberty of the person is certainly laudable, but in excess the

111Nicole Spadotto

protection risks undermining respect for the given word – and transforms obligations to do or not do into alternative obligation (monetary)

o Even if the court finds infringement to the liberty of the person, there are coercive tools in the law (ie, injunction), which temper the rigour of liberty: deal with problem based on whether the service constitutes a monetary obligation, an obligation to not do, or one of many varieties of an obligation to do

- Monetary obligations: incontestably an obligation susceptible to an execution in kindo It’s without doubt an obligation of execution in kind always part of a case which permits of

it - Obligations to not do something: this doesn’t pose a problem in terms of liberty of the person in

execution in kind (this person precisely doesn’t need to do anything!)o In other cases, the question of efficacy of the judgement hasn’t been answered – the private

law offers a means to give efficacy (ie, prohibitive injunction). If the debtor were to already begin to violate an obligation that’s not done, the creditor can join a prohibitive injunction to demand interest damages for the prejudice already caused. He can also reserve this recourse in damages for violations which can arise during an instance

- The obligations to do: performance in kind for this poses difficulties, explicitly in part because of the large variety of prestations

o Certain prestations to do don’t implicate the participation of the debtor, but other prestations implicate the debtors to variable degrees

The obligations to do which consist of accomplishing juridical acts: this implicates in theory the participation of the debtor (the law doesn’t exclude necessarily the forced execution of the obligation). The active participation of the debtor, however, is not indispensable in all cases (the judgement de facto is a resolution forcing an outcome, and personal constraint is not engaged)

Ie, if a seller refuses to sign the deed of sale, the judgement will serve as the sale

The fact of this action is expressed by the legislature, in the chapter of promises of selling or buying (CCQ 1712) – is nothing more than an illustration of the general rule enounced in CCQ 1601 (errs more towards execution in kind)

But in certain cases, execution in kind as a solution is not available, ie, non-respect for promise of donations (CCQ 1812)

The obligations to do which consist of accomplishing technical or artistic prestations: in performance in kind, pose difficulties re cases which permit of it. It is the reality of the benefits due that will most often determine whether or not it is possible to enforce them in kind. This execution will not create difficulties if the service does not require much dexterity or expertise.

Technical prestatioins which are relatively simple: bailiff can just go get the asset and return it to the creditor (involvement of the debtor is not indispensable)

Technical prestations which are more complex: theoretically, ordering execution risks affecting the liberty of the debtor – but can be an injunction to do (but the contemporary jurisprudence has proven less deference to execution in kind)

The nature of the person who is the creditor (physical or moral), their size (if they’re not a physical person), and the object of the prestations correlating with the co-contractor constitutes the criteria to model the decision to pronounce or not an execution in kind

- Performance in kind of an obligation is possible, thanks to the utilization less and less timidly of the injunction to do – but CCQ 751 subjects the injunctions it says are mandatory to the same reservations as CCQ 1601 (cases which permit of it)

o Must have a reasonable application as a tool of execution of substantive law - Prestations links to irreducible individual qualities of the debtor: difficult to envision forced

execution. If someone is going to paint your basement as an artist, they are not necessarily interchangeable. So it’s difficult to get an injunction

- Prestations implicated in expanded interpersonal relations: there are some constraints which are

112Nicole Spadottosimply intolerable and inhumane (ie, ending a work contract at a duration determined by the employer). Interest damages are the only recourse available

- Jurisprudential barriers to rejecting direct execution in kind: respect for personal freedom is no longer absolute (limited to natural persons); constrains on legal persons is less problematic. The size of a legal person is certainly decisive (court less likely to order forced execution if smaller company or natural person)

- Legislative temperaments in rejecting execution direct in kind: violation of fundamental rights in the Charter of rights and freedoms of the person maybe justifies an ordonnance

Indirect execution (execution in nature by equivalence) - When recourses in direct execution in kind are not envisioned (or not wished for), the creditor can

obtain costs from the defaulting debtor (CCQ 1602(1))o Obtains the same as the execution in nature, but in equivalence monetarily – this solution is

not implicated when direct execution in kind is impossible: if an injunction to do is available, the creditor has a choice between execution by the debtor and execution by equivalence

This is when the prestation is not because of the person – in these cases, the only possible recourse is interest damages, looking at the resolution or resiliation of the contract

- Extra-judicial solution: execution of an indirect nature is not a new thing: CCQ 1602(2) does not require the judicial authorization for justifying the condemnation of the debtor to pay the costs of a replacement

o “A creditor wishing to avail himself of this right shall so notify the debtor in the judicial application or the extrajudicial demand by which he puts him in default, except in cases where the debtor is in default by operation of law or by the terms of the contract itself.”

This second line requires that the creditor sends the debtor a demand of execution – extrajudicial or judicial

The de-judicialization is relative – if the debtor refuses to honour the bill, despite respect of the conditions of CCQ 1602, its thus necessary for a court to condemn the debtor to reimburse the fees. The debtor can explain to the judge the motives justifying their inexecution. If the creditor omits to issue a formal notice, extrajudicial or judicial, the judge will refuse to order the reimbursement of fees

Short notes (recap): - Undoubtedly, the “most satisfactory means for the creditor is for him to obtain exactly what he

expected”- Historically, forced execution was considered an exceptional remedy. Now considered as the

remedy of principle to which the creditor has even a “fundamental right” - Execution in kind only exists in cases which permit of it - Cases of impossibility of constraint can be grouped into two major categories

o The service to be performed no longer has any purpose (ie, destroyed marble state. Snow covered lawn cannot be mowed)

o Enforcement would require the active participation of the debtor’s own person (ie, singer who didn’t want to give a show)

MacDonald and Brierley, “Quebec Civil Law”- Plaintiff may ask for specific performance (reparation in kind) instead of a monetary award. This

means the debtor will be constrained to execute the presentation that’s been assumed or imposed- Any other performance of this obligation, such as when the creditor executes the obligation at the

debtor’s expense, logically constitutes an order for pecuniary reparation and not specific performance

- However, when the obligation itself relates to the payment of a sum of money, courts have held that such orders amount to performance in kind

- The regime of specific performance applicable to obligations other than monetary obligations is controlled by the formulation of the Code, which provides that specific performance may be awarded in “those cases which admit of it”

113Nicole Spadotto

- For this reason, it’s necessary as a preliminary step to determine the nature of the obligation that the creditor seeks to enforce

- Specific performance is available with an obligation to give, though courts have shown some hesitation where the object of the translatory contract is fungible property that has not yet been individualized

- Code makes explicit the possibility of reparation in kind as well for the non-performance of both contractual and extra-contractual obligations not to do, notably by means or orders enjoining continuing breach of such obligations, or requiring the destruction of whatever has been built in contravention of the obligation

- General availability of specific performance beyond the above isn’t clear, and has been a matter of controversy

- Regime of reparation in kind has been hampered by the traditional reluctance of judges to force the performance of an obligation when such an order would require interference with the personal liberty of the defendant - for this reason, courts have usually favoured monetary awards as the primary remedy (though judges showing more signs of returning to Civil law principles governing availability of specific performance, particularly in contractual obligations)

ii. Damages (execution by equivalence) Execution by equivalence: attribution of damages in the case of inexecution (CCQ 1607 onwards)

Origins/causes of execution by equivalence- 1) The decision of the creditor (result of their fundamental choice per CCQ 1590)

o CCQ 1590(2): Where the debtor fails to perform his obligation without justification on his part and he is in default, the creditor may, without prejudice to his right to the performance of the obligation in whole or in part by equivalence… (three options laid out)

o Per CCQ 1590, the creditor has three options: 1) force specific performance; 2) resolution or resiliation of the contract; 3) other measures by law to enforce his right – here, we’re interested in performance by equivalence

o This article lists the remedies available to the creditor when there’s a breach of the obligation: but what’s important is that the creditor has a choice (to have the execution by equivalent)

- 2) The creditor wants to force execution by nature/specific performance/performance in kind, but this specific performance is impossible in the sense of CCQ 1601

o CCQ 1601: A creditor may, in cases which admit of it, demand that the debtor be forced to make specific performance of the obligation

o The hypothesis in consideration here is where the creditor claims a specific performance, but this case isn’t permitted

o Typical example: case of a prestation which engages the person of the debtor (ie, a singer who doesn’t execute their obligation of singing at a show. Can’t force this performance, so the result is damages)

Damages- With the question of damages in the event of a breach of an obligation, we enter the

field of civil liability to the extent that it is the principles of civil liability that govern the regime of this obligation to pay damages

- There’s a relationship between CCQ 1607 and following, the texts which govern the execution by equivalence, and the chapter devoted to civil liability as a source of the obligation

- There are a number of prerequisites for the implementation of equivalent enforcement which are found in the liability provisions in particular (see below): we

114Nicole Spadotto

are in the context of CCQ 1458, which is the text that constitutes the base of contractual liability

Damages in the case of inexecution and contractual responsibility - CCQ 1458: Every person has a duty to honour his contractual undertakings. /

Where he fails in this duty, he is liable for any bodily, moral or material injury he causes to the other contracting party and is bound to make reparation for the injury; neither he nor the other party may in such a case avoid the rules governing contractual liability by opting for rules that would be more favourable to them.

- We find execution by equivalence the majority of the time in CCQ 1458, which is the text which constitutes contractual responsibility – that one is responsible for prejudice caused by a contractual breach

- The text which governs/bans the option of the regime is CCQ 1458. o A person who suffers from violation from the contract and an extra-

contractual prejudice theoretically has a choice between the contractual or extra-contractual regime from where to get damages.

o But CCQ 1458 prescribes the option that if the damage is suffered under contract, you must go under the contractual regime. You can’t go under the extra-contractual regime, even if it’s more favourable

- Think of performance by equivalence (damages) in the bounds of contracts (the typical case)

o To understand execution by equivalent, it’s necessary to see that performance by equivalence is designed for the typical of the contract: to understand, place yourself in the contractual situation

o For Baudouin, Jobin, and Vézina, there’s pure and simple assimilation between damages and contractual responsibility, because contractual responsibility forces execution by equivalence (some authors equate contractual liability to execution by equivalent because the link is so obvious)

o The typical case is contract to understand execution by equivalence, but it’s also theoretically open to all the other obligations – except civil responsibility or management of the affairs of another (though we will place ourselves in the situation of the contract here, while remembering in the silence of the CCQ it’s possible for the rules to apply to any type of obligation). However, we see evidence emerging that rules of execution by equivalence are designed for the typical case of the contract.

- Contractual obligations take on three forms: 1) obligation to give (pay a sum of money); 2) obligation to do (any service whatsoever); 3) obligation to not do (prohibition to build, for example)

o Execution by equivalence forces a transformation of the object of the obligation: the object is transformed into money/damages by the intermediary of responsibility. The idea is when the debtor is condemned to execution by equivalence/damages, the damages take the place of the contractual obligation, so there’s a different goal

Here, we’re talking about contractual civil liability, which makes it possible to address the essential question: by conceiving performance by equivalence as liability, the CCQ necessarily produces a transformation of the contractual obligation when the creditor claims damages

o This means the source of the obligation is not the same/is transformed: for damages, the source is the prejudice as a result of the responsibility by the fact of the contract (inexecution). For the object of the contract, the source was the contract.

o It’s for this reason that execution by equivalence is part of responsibility – it’s not simply the monetary representation of the contractual prestation. It’s a result of changing the source of the obligation.

115Nicole Spadotto

When we talk about execution by equivalent and it’s place in the line of responsibility, there is strongly a transformation of the claim

Except when there is money Each time you act in execution by equivalent of a contractual

obligation (which is an obligation to do or not to do), you switch from the possibility of performing a material service to its monetary equivalent (the obligation is transformed, and this transformation takes place through responsibility) – when a debtor is ordered to perform by equivalent, they pay damages which take the place of the contractual obligation

These damages have a different purpose: in the case of contractual obligation, it’s a matter of providing the creditor with what has been promised. In the case of an obligation of performance by equivalent, the purpose is to compensate for the damage suffered as a result of non-performance.

The source of the obligations is not the same: in the first case, it’s directly contractual (to provide what has been promised). In the second case, it’s indirectly contractual because the contractual framework makes it possible to determine the damage resulting from the non-performance

Performance by equivalence isn’t simply the representation in money of the contractual performance, but it is the result of a change in the source of the obligation – from the contract to liability as a result of the contract which is not the same and requires different elements

Three categories of types of damages: damages is going to look at the burden of the debtor in the case of inexecution

- 1) Compensatory damages: damages for the case of contractual responsibility. They are meant to compensate the prejudice suffered in the case of inexecution. They are born from the inexecution of a contract. (CCQ 1611+)

- 2) Moratorium damages: the damages due for reason of lateness of execution of the obligation. Prejudice is born from the source of the lateness. These damages are in the framework of contractual civil responsibility. (CCQ 1617+)

o More precisely, these are damages due to the case of the damage caused by the delay itself; it’s not the mere fact of the delay which gives rise to these damages, but the fact the delay remains

- 3) Punitive damages: not meant to compensate or repair a prejudice, but to be a penalty which takes its form in an obligation of money. The source is in the defective behaviour of the debtor. This is for a wrong, not a compensatory obligation. (CCQ 1622+)

Contractual responsibility (CCQ 1607 – forms the general disposition) CCQ 1607: The creditor is entitled to damages for bodily, moral or material injury which is an immediate and direct consequence of the debtor’s default (demeure).

- This article establishes the link between execution by equivalence as a regime of obligations and CCQ 1590. CCQ 1607 gives a description of execution by equivalence (listing of the concrete aspects). CCQ 1590 enounces the right of the creditor to execution by equivalence. By specifying the damages to which the creditor is entitled, CCQ 1607 makes a link with CCQ 1590: it gives consistency to the creditor’s fundamental right to enforcement by equivalent

- There is also a link between CCQ 1607 and CCQ 1458: the sense of damages makes a link with CCQ 1458 because it establishes fundamental conditions for contractual civil responsibility. The contractual responsibility is the fundamental condition of civil responsibility arising from non-performance of the contract.

116Nicole Spadotto

o This is significant because there’s a conceptual unity of all responsibility (found also in CCQ 1458), as all fundamental elements of responsibility are found in CCQ 1607: particularly 1) fault; 2) prejudice; and 3) causality

Prejudice: “creditor is entitled to damages for […] injury” Must actually demonstrate it (non-performance does not

always mean prejudice) Causality: “consequence”

Damage must be caused by the non-performance Fault: “immediate and direct […] default”

Default of the debtor is the event giving rise to liability The fact of non-performance is enough to characterize the

default/fault giving rise to it. We see this in CCQ 1458, where the failure to honour commitments equals a civil fault

o (But note that this liability is contractual, with a different legal regime from extra-contractual liability. There’s a conceptual unity of responsibility and these two legal regimes – one which has at its base CCQ 1457, and the other which constitutes contractual liability has at its base CCQ 1458)

- CCQ 1607 sets the conditions of contractual liability, and the text clarifies two things: these two elements specify responsibility of the contractual type

o 1) The prejudice that will be repaired must be corporal, moral, or material The idea that we did not get what we contracted for does not free us

from the need to establish injury. The existence of the damage is almost automatic, because of the very fact of non-performance. But injury needs to exist, and the existence must be demonstrated (even though in most causes this is true). Simple non-performance isn’t enough

We see the importance to the debtor: it gives him the possibility of establishing that there has been no damage and even if he is in a state of non-performance he cannot be ordered to pay damages in these cases. There can be non-performance with no prejudice

Burden of proof to demonstrate the existence of damage is on the creditor

o 2) The prejudice of the debtor’s default must be “direct and immediate” Two possibilities to treat what appears to be the additional condition

of “immediate and direct” to engage the liability of the person who has failed to perform

1) Either we are in the field of civil liability 2) Or we are in the realm of assessment of damages

o If prejudice must be an immediate and direct result of the debtor’s fault, in reality it is a question of causality.

o “Direct and immediate” are in the order of evaluating damages, because their existence forms a limit to the quantification of damages

Conditions of CCQ 1607- 1) First condition: the default of the debtor (generates the fact of the responsibility)

o Inexecution suffices to characterize the demeure. But the sufficiency depends on the type of obligation, and whether or not there’s a delay.

If the obligation was to deliver a statue on a specific day, and you actually needed it this day, it’s actually a demeure and not just being late because it was important for it to be delivered on that day

BUT if you deliver it but you’re just late, but it’s not important for the statue to be delivered on that specific date, you’re just late (not in demeure)

117Nicole Spadotto

- 2) Second condition: the prejudice o The idea that we did not get what we contracted for does not free us from the

need to establish injury. Injury needs to exist, and the existence must be demonstrated. Simple non-performance isn’t enough

o It’s true that the automatic fact of an inexecution can be seen as a prejudice. Inexecution, however, is not necessary to establish a prejudice (all you have to do is demonstrate its existence, like poor execution or an unfair penal clause)

o Burden of proof to demonstrate the existence of damage is on the creditor - 3) Third condition: causality (the prejudice is caused by inexecution)

o Causality is the harm caused by the non-performance

CCQ 1608: The obligation of the debtor to pay damages to the creditor is neither reduced nor altered by the fact that the creditor receives a benefit from a third person, as a result of the injury he has suffered, except so far as the third person is subrogated to the rights of the creditor.

- Preserves the right of the creditor to get the damages - For special cases: case of the provision of a third party (not that important)

CCQ 1609: Acquittances, transactions or statements which the debtor, an insurer or their representatives obtain from the creditor, and which relate to the bodily or moral injury the creditor has suffered, are without effect if they are damaging to the creditor and were obtained within 30 days of the act or omission which caused the injury.

- Indemnisation by an assurance – in particular the deliverance or acquittance of a transaction

- Protects the creditor also- For special cases: case of the provision of a third party (not that important)

CCQ 1610: The right of a creditor to damages, including punitive damages, may be assigned or transmitted. / This rule does not apply where the right of the creditor results from the infringement of a personality right; in such a case, the right of the creditor to damages may not be assigned, and may be transmitted only to his heirs.

- The fact that there is a claim on the defaulting debtor signifies that the creditor has an asset that they can sell – establishes the principle that the creditor’s right to damages, even punitive, is transferable

- Once the debtor has been ordered by the court to pay the creditor an amount by execution by equivalence, CCQ 1610 allows the creditor to take the creditor’s title to the enforceable claim and assign it to a collection agency which will buy it back from the creditor at a lower price, but a price that is payable immediately. The collection agency will take over the actual collection from the debtor

- Poses the right of the creditor to damages, including punitive, which can be assigned or transmitted to another

- The credit on the debtor failed, and there’s an “actif” (asset) on the patrimony – the article is an organism to recover the effective amount from the debtor

- The text provides for an exception: when the right of the creditor results from infringing a personality right, the damage will not be awarded in this particular case

o See the assigned reading for more detail

Evaluation of damages** According to a classical division, things are divided into two main parts. This distinguishes according to the way in which compensation constituting performance by equivalence is fixedCCQ 1611: The damages due to the creditor compensate for the amount of the loss he has sustained and the profit of which he has been deprived. / Future injury which is certain and assessable is taken into account in awarding damages.

118Nicole Spadotto

- CCQ 1611 fixes the principle of evaluation of damages- First paragraph: decomposes damages, when they’re due, and for what purpose

(breaks down the elements of damage between the loss suffered and the private gain)

o The loss suffered is the impoverishment suffered by the creditor’s assets (impoverishment suffered by the creditor’s patrimony)

Ie, if the singer doesn’t show up, but you’ve already booked the room at a price

o The profit of which the creditor have been deprived is the contractual benefit (must compensate for the net benefit lost)

Ie, if the singer doesn’t show up, you have to refund the dollar amount of the tickets sold

- Second paragraph says juridical solutions for future injury exist. The principle is a future prejudice, so it’s certain. This is the construction of contractual responsibility, that the responsibility which already exists is civil responsibility

o This is not crucial. It goes without saying that future harm is taken into account when it’s certain. This is because the prejudice is to be direct, actual, and certain – actual and certain supposes a future

o This is simply a reiteration of what exists in civil liability CCQ 1612: The loss sustained by the owner of a trade secret includes the investment expenses incurred for its acquisition, perfection and use; the profit of which he is deprived may be compensated for through payment of royalties.

- This concerns a particular case of commercial violation. This is an application in a particular matter, of trade secrecy, not indicative of the system (not that important)

CCQ 1613: In contractual matters, the debtor is liable only for damages that were foreseen or foreseeable at the time the obligation was contracted, where the failure to perform the obligation does not proceed from intentional or gross fault on his part; even then, the damages include only what is an immediate and direct consequence of the nonperformance.

- Key article for understanding evaluation of damages, concerns the economy of evaluation of damages. (Basic text on the economics of damage assessment)

- We see that the text makes mention of what CCQ 1607 invokes: “immediate and direct”

o In CCQ 1607, “immediate and direct” is presented as a condition of damages as a result of inexecution

o In CCQ 1613, it limits the evaluation of damages to those which are an “immediate and direct” consequence of the inexecution (limit to what can be awarded; limits the damages for which the debtor is liable in the event of non-performance)

- The central element is the general sense of CCQ 1613: it’s rule/general function is to limit the damages of the debtor and responsibility in the case of inexecution

- Limiting the damages : o 1) The general limit – in contractual matters the debtor is liable only for

damages that were foreseen or foreseeable at the time the obligation was contracted.

What’s foreseen or foreseeable at the moment the obligation was contracted? NOT the damage explicitly indicated in the contract. Rather, it’s the damage that the creditor is caused to suffer in relation to the very thing that was the subject of the obligation. The foreseeability is in relation to the thing that is the subject of the obligation or in relation to the economic operation of the obligation/transaction

Ie, a person is selling a vehicle for $20,000 and must deliver it at a certain time. Truck isn’t delivered. Now the truck costs $23,000. The person who didn’t deliver can be ordered to pay


This is objective predictability. It refers to the purpose of the contract, not to the parties’ perception.


The perte subie/gain privé rule to determine damages includes a gain privé/perte subie that’s certain to happen in the future. Perte subie/gain privé rule is the gain of which the creditor is deprived and the loss he has suffered because of the breach of the contract

119Nicole Spadotto

the amount necessary for the creditor to buy the same truck, but is not liable in the failure to deliver (unless intentional or gross negligence).

But the parties may cover this type of damage in advance, specifying the reason for the obligation and thus stipulating the risk. The creditor could stipulate the need for the truck at a certain date to make a delivery, and thus shift the risk on the debtor’s shoulders. This can be explicit in a clause, but can also be implicit (in particular by a price substantially exceeding the normal market price, for example). The contractual intention which is determined is augmented by the burden of predictable damage.

o Ie, a person is selling/deliver a truck to an entrepreneur who needed the truck for economic operations. If the truck is late, the entrepreneur didn’t get the benefit from the sale of the product, and the delay of the truck’s delivery is the delay of an economic operation. The party takes the burden for this type of damage in advance. The risk is integrally supported by the seller of the truck.

o The risk is therefore fully borne by the other party Also where the failure to perform the obligation does proceed from an

intentional or gross fault on the debtor’s part, we extend the circle of compensation beyond foreseeable damage (this is a fraudulent fault)

When the failure to perform has its source in the debtor’s gross or intentional fault, the damage is not predictable. But if this interest damage is immediate and direct, then the creditor can get it – this is linked to the causality, not the object.

Ie, this would be non-delivery of the truck specifically to harm the creditor

But what if the unpredictable damage is infinite? How will we stop the circle from expanding too far? This is when we get to the second limit of causality (end of CCQ 1613: “damages include only what is an immediate and direct result of non-performance”

o 2) The second limit – causality (“immediate and direct”). The best way to understand “immediate and direct” is to replace them

with the word “necessary” – ask whether the damages are necessary Necessary means what? Debtor is only liable for damages that are the

necessary consequence. This means that the creditor cannot prevent the prejudice from the non-performance from occurring. The moment of intervention when the creditor minimizes the damage marks the moment when the damage isn’t immediate and direct.

Ie, Person I sells a sick cow to Person II. The “dol” is the intentional or gross fault. The sickness is contagious, so it’s caught by the buyer’s other cows. 1) Because you sold a sick cow, you’re bound to compensate the buyer for the defects – damages as if the buyer got a healthy cow); 2) But because the fault was intentional or gross, he must indemnise in line with CCQ 1613, because the buyer’s other beasts are contaminated. The seller only needs to compensate for what’s “necessary” (immediate and direct), so must only compensate in the limits of the economic operation.

o Seller will need to compensate the buyer for the purchase of the defective thing (difference between a


Even in the event of intentional or gross negligence, we are only liable for damages that are the “necessary” consequence. Necessary refers to the harm that the creditor could not prevent from happening, given the non-performance.


If the person commits a gross or intentional fault, they will still be liable for unforeseeable damages as long as there is a causal link (ie, if the damage is an immediate and direct result) between the inexecution of the contract by fraud and the prejudice suffered. This includes even when the damage is not foreseeable.

120Nicole Spadotto

healthy and a sick cow), but the seller who knew he was selling the sick animal will need to compensate for what is not predictable, which falls under the CCQ 1613 sanction

o But the buyer will not be able to complain about his failure to cultivate his land, because he can avoid this damage. Anything that occurred after the creditor could have intervened is not covered under foreseeable or unforeseeable damage in the event of intentional fault, as it is not the direct and immediate result of non-performance

Essentially, the moment of the creditor’s intervention is not covered by damages, even if the fault is gross and intentional – because then it’s not direct and immediate

There’s a link here with the creditor’s obligation to mitigate his own damage (ie, common law mitigation). From the moment the creditor can intervene at a lower cost to mitigate the damage, the damage is not an immediate and direct result of non-performance

Moratorium DamagesCCQ 1617: Damages which result from delay in the performance of an obligation to pay a sum of money consist of interest at the agreed rate or, in the absence of any agreement, at the legal rate. / The creditor is entitled to the damages from the date of default without having to prove that he has suffered any injury. / A creditor may stipulate, however, that he will be entitled to additional damages, provided he justifies them.

- Establishes certain principles for moratorium damages – damages that are due to the case of prejudice caused by the delay (due to compensate for the prejudice suffered as a result of the delay in performance)

- Establishes the rule that the creditor must get damages if the debtor is in demeure; the creditor doesn’t need to show they suffered a prejudice. Creditor is entitled to these damages from the date of the default

- In the case of moratorium damages, these damages are due to compensate for the prejudice suffered as a result of the delay or the performance

- Second line: creditor can stipulate that he will be entitled to additional damages if he can justify them. (Article does not preclude additional damages)

Punitive DamagesCCQ 1621: Where the awarding of punitive damages is provided for by law, the amount of such damages may not exceed what is sufficient to fulfil their preventive purpose. / Punitive damages are assessed in the light of all the appropriate circumstances, in particular the gravity of the debtor’s fault, his patrimonial situation, the extent of the reparation for which he is already liable to the creditor and, where such is the case, the fact that the payment of the reparatory damages is wholly or partly assumed by a third person.

- First part of the text is the irreducability of punitive damages – they’re not about compensating for non-performance or prejudice. Note that it’s a sanction by retribution, with a preventative function, as says the text.

- Second line indicates the precise elements of evaluation of these damages: fixes the conditions to evaluate damages where required by law

o Indicates the elements for assessing punitive damageso Note that the existence of a legal text is necessary to denote damages (in

Quebec, the existence of punitive damages in a specific piece of legislation is necessary for them to be awarded), but the court has avoided the need formal presence of damages in a legal provision in some instances. It’s possible in certain circumstances for the court to denote/attribute punitive


Creditor has a duty to limit the damage. If it’s possible to limit the damage, it’s not direct and immediate following when it’s possible to do so.

121Nicole Spadotto

damages to the importance of the violated legislative text or gravity of the behaviour

** Now moving onto the second part of the Code devoted to anticipating damages

Penal clause evaluation CCQ 1622: A penal clause is one by which the parties assess the damages in advance, stipulating that the debtor will suffer a penalty if he fails to perform his obligation. / A creditor has the right to avail himself of a penal clause instead of enforcing, in cases which admit of it, the specific performance of the obligation; but in no case may he exact both the performance and the penalty, unless the penalty has been stipulated for mere delay in the performance of the obligation.

- Fixation of the indemnity by the parties in advance is a penal clause (anticipated evaluation) – penal clause is an anticipated sum by equivalence in the event of inexecution. The penal clause is an early assessment of the sums due for enforcement by equivalent

- The mention of the penalty element of the penal clause underlines the automatic and flat-rate characteristic of the penal clause. The amount is due, regardless of the harmful consequences of non-performance (or not)

o Automatic: in line two. A creditor has to take an action to get out of the penal clause, because if it’s in the contract it’s automatically applied.

o Flat rate: amount is due no matter what was the harmful consequence of the failure to execute (ie, forfeits right to get both performance and penalty, or to get compensatory damages and damages from the penal clause) – this is reflected in the first part of CCQ 1623

CCQ 1623: A creditor who avails himself of a penal clause is entitled to the amount of the stipulated penalty without having to prove the injury he has suffered. / However, the amount of the stipulated penalty may be reduced if the creditor has benefited from partial performance of the obligation or if the clause is abusive.

- First part: indicates the creditor is entitled to the amount without needing to prove prejudice. This is a function of the penal clause existence, because it’s determined in advance by the parties. It’s thus not useful to find or prove that a prejudice was suffered. All you need to prove here is inexecution/non-performance of the obligation to trigger the penal clause.

o The prejudice as specified in CCQ 1607 is seen as a prelude to the assessment of damages; however, this isn’t the case here because damages are already assessed in advance

- Second part of the text indicates an automatic and flat rate character (to pay the sum regardless of the current amount of non-performance). There’s possibility of reducing the amount of the penal clause for two reasons: 1) partial execution of the obligation which profited the creditor; or 2) if the penal clause is abusive

PERFORMANCE BY EQUIVILENCE (DAMAGES)CCQ 1607: The creditor is entitled to damages for bodily, moral or material injury which is an immediate and direct consequence of the debtor’s default.

CCQ 1608: The obligation of the debtor to pay damages to the creditor is neither reduced nor altered by the fact that the creditor receives a benefit from a third person, as a result of the injury he has suffered, except so far as the third person is subrogated to the rights of the creditor.

CCQ 1609: Acquittances, transactions or statements which the debtor, an insurer or their representatives obtain from the creditor, and which relate to the bodily or moral injury the creditor has suffered, are without effect if they are damaging to the creditor and were obtained within 30 days of the act or omission which caused the injury.

CCQ 1610: The right of a creditor to damages, including punitive damages, may be assigned or

122Nicole Spadotto

transmitted.This rule does not apply where the right of the creditor results from the infringement of a personality right; in such a case, the right of the creditor to damages may not be assigned, and may be transmitted only to his heirs.

CCQ 1611: The damages due to the creditor compensate for the amount of the loss he has sustained and the profit of which he has been deprived.Future injury which is certain and assessable is taken into account in awarding damages.

CCQ 1612: The loss sustained by the owner of a trade secret includes the investment expenses incurred for its acquisition, perfection and use; the profit of which he is deprived may be compensated for through payment of royalties.

CCQ 1613: In contractual matters, the debtor is liable only for damages that were foreseen or foreseeable at the time the obligation was contracted, where the failure to perform the obligation does not proceed from intentional or gross fault on his part; even then, the damages include only what is an immediate and direct consequence of the nonperformance.

CCQ 1614: Damages owed to the creditor for bodily injury he suffers are measured as to the future aspects of the injury according to the discount rates set by regulation of the Government, from the time such rates are set.

CCQ 1615: The court, in awarding damages for bodily injury, may, for a period of not more than three years, reserve the right of the creditor to apply for additional damages, if the course of his physical condition cannot be determined with sufficient precision at the time of the judgment.

CCQ 1616: Damages awarded for injury are exigible in the form of capital payable all at once, unless otherwise agreed by the parties.Where the injury suffered is bodily injury and where the creditor is a minor, however, the court may order payment, in whole or in part, in the form of an annuity or by periodic instalments, on the terms and conditions it fixes, which may include indexation according to a fixed rate. Within three months after the date on which the creditor attains full age, he may demand immediate and discounted payment of any amount still receivable.

CCQ 1617: Damages which result from delay in the performance of an obligation to pay a sum of money consist of interest at the agreed rate or, in the absence of any agreement, at the legal rate.The creditor is entitled to the damages from the date of default without having to prove that he has suffered any injury.A creditor may stipulate, however, that he will be entitled to additional damages, provided he justifies them.

CCQ 1618: Damages other than those resulting from delay in the performance of an obligation to pay a sum of money bear interest at the rate agreed by the parties, or, in the absence of agreement, at the legal rate, from the date of default or from any other later date which the court considers appropriate, having regard to the nature of the injury and the circumstances.

CCQ 1619: An indemnity may be added to the amount of damages awarded for any reason, which is fixed by applying to the amount of the damages, from either of the dates used in computing the interest on them, a percentage equal to the excess of the rate of interest fixed for claims of the State under section 28 of the Tax Administration Act (chapter A-6.002) over the rate of interest agreed by the parties or, in the absence of agreement, over the legal rate.

CCQ 1620: Interest accrued on principal does not itself bear interest except where that is provided by agreement or by law or where additional interest is expressly demanded in a suit.

123Nicole Spadotto

CCQ 1621: Where the awarding of punitive damages is provided for by law, the amount of such damages may not exceed what is sufficient to fulfil their preventive purpose.Punitive damages are assessed in the light of all the appropriate circumstances, in particular the gravity of the debtor’s fault, his patrimonial situation, the extent of the reparation for which he is already liable to the creditor and, where such is the case, the fact that the payment of the reparatory damages is wholly or partly assumed by a third person.

CCQ 1622: A penal clause is one by which the parties assess the damages in advance, stipulating that the debtor will suffer a penalty if he fails to perform his obligation.A creditor has the right to avail himself of a penal clause instead of enforcing, in cases which admit of it, the specific performance of the obligation; but in no case may he exact both the performance and the penalty, unless the penalty has been stipulated for mere delay in the performance of the obligation.

CCQ 1623: A creditor who avails himself of a penal clause is entitled to the amount of the stipulated penalty without having to prove the injury he has suffered.However, the amount of the stipulated penalty may be reduced if the creditor has benefited from partial performance of the obligation or if the clause is abusive.

CCQ 1624: Where an obligation with a penal clause is indivisible without being solidary and its non-performance is due to the act or omission of only one of the co-debtors, the penalty may be exacted in full against him or against each of the co-debtors for his share, but, in the latter case, without prejudice to their remedy against the co-debtor who caused the penalty to be incurred.

CCQ 1625: Where an obligation with a penal clause is divisible, the penalty also is divisible and is incurred only by that debtor who fails to perform the obligation, and only for that share of the obligation for which he is bound, without there being any action against those who have performed it.This rule does not apply where the obligation is solidary, nor where the penal clause was stipulated to prevent partial payment and one of the co-debtors has prevented the performance of the obligation for the whole; in this case, that co-debtor is liable for the whole penalty and the others are liable for their respective shares only, without prejudice to their remedy against him.

MacDonald and Brierley, “Quebec Civil Law”COMPENSATORY DAMAGES

- Basic rule is that the plaintiff must be compensated for the “loss that he has sustained…and the profit of which he has been deprived,” so compensation will lie for damages that are an immediate and direct consequence of the breach of obligation

- But other than this, Code is almost silent on the proper criterion for evaluating damages - There’s a general principle of full compensation in relation to claims for extra-patrimonial losses- Contracts limits full reparation in damages – plaintiff is entitled only to damages which were

“foreseen or foreseeable” at the time of contracting the obligation - Foreseeability criterion is inapplicable when the contractual breach is accompanied by fraud - Authors believe the foreseeability criterion is an expression of a suppletive rule governing the

scope of liability that the contracting parties had in view at the time of their agreement, rather than a legal limitation on the measure of compensable loss

- In evaluating contractual damages, courts will first look to the value attributed to their agreement by the parties in the contract; if no pre-default evaluation, courts tend to interpret the principle of full compensation so as to award reparation for lost profit, reimbursement of expenses, and occasionally moral damages

- In contract, parties can modify principles of evaluation applicable to any given failure of performance: extending liability to include loss caused by superior force, exclusion or exoneration clauses, liquidated damages clauses for non-performance and delay, or add penal clauses for non-performance or delay

MORATORY DAMAGES- Damages resulting from a delay in the performance of obligations (moratory as opposed to

124Nicole Spadottocompensatory damages) may also be obtained from the debtor in certain cases

- When the obligation not yet performed is for the payment of money, and there’s no penal clause, the allowable damages consist only of interest either at the rate agreed upon by the parties or at the legal rate of interest

- Interest on monetary obligation will accrue from the date of default, and is payable even without any evidence of loss

- The failure to perform any other kind of obligation will also give rise to a claim for moratory damages arising after the day of the default

- Nature of the harm is identical for compensatory vs. moratory damages, whenever the obligation is not for the payment of money, the present position is to reserve the expression “moratory damages” for all those cases when the damage results from late performance – it is understood as moratory and not compensatory

- When is interest due for non-performance, and at what rate? If no agreement to damages has been reached, the monetary value of non-performance is settled only at the moment when the court renders judgement

PENAL CLAUSES- Clauses imposing penalties on default are governed in the Code as a modality of obligation, while

clauses liquidating damages are in the section on damages - It’s in principle (subject to rules of public order) permissible to stipulate a penalty involving the

performance of a particular service by the debtor in default, or the handing over of property

iii. The conservation of the debtor’s patrimony ** This part of the course is devoted to looking at how the effect of the obligation is completed, by studying the protection of the creditor’s right to performance. These are 1) oblique actions; 2) Paulian action. These are mechanisms to protect the creditor, justified by the link of obligation.

Constraint and freedom- The obligation is a legal relationship by which the debtor is bound by the law of the

civitas (city) – according to Sevigny, the obligation consists in domination over a person, but not over the whole person because this would result in the total absorption of the very personality, which must be considered a restriction of his freedom and a subjection to the will

- The obligation is the source of a personal right that is limited; and the law seeks to guarantee this obligation

- The obligation cannot absorb the debtor’s personality, so the obligation is based on the partial alienation of freedom

- Under these conditions, to say that an obligation gives rise to a personal right is a way of saying that it must be understood as the right one has over a legal person, as the law of obligations implies/allows

o A person is first and foremost a patrimony from the perspective of obligations…but in civil law it goes a bit deeper than that

CCQ 1: Every human being possesses juridical personality and has the full enjoyment of civil rights.

- All have a legal personality and enjoyment of rightsCCQ 2: Every person is the holder of a patrimony. / It may be the subject of a division or of an appropriation to a purpose, but only to the extent provided by law.

- The law of obligations concerns the person as a person who is the holder of a patrimony

- The link of obligations translates into a power of the creditor over the person, as this person is the holder of a patrimony – but the creditor’s power is limited, because the rules are organized around only a partial alienation of freedom

125Nicole SpadottoCCQ 3: Every person is the holder of personality rights, such as the right to life, the right to the inviolability and integrity of his person, and the right to the respect of his name, reputation and privacy. / These rights are inalienable.

- A person has civil rights, a patrimony, and extra-patrimonial rights (personality). The law of obligations concerns the person as a holder of a patrimony – we’re not going to request payment on the individual himself, but from his patrimony

- The law of obligations translates into a power the creditor holds over a person as they are (in the terms of the CCQ) the holder of a patrimony – in other words, modern civil law organizes limitations on the creditor’s power (the rules are organized around the alienation of freedom, but this is only partial alienation). This is massively liberal

** Permanent tension: a whole part of the law of obligations aims to protect freedom, while another part aims to ensure the effects of coercion in the performance of the obligation. This is significant from a human point of view.

Protection of the creditor’s right to enforcement of the obligation – the common pledge of creditors

- Once we understand that the creditor’s right is the right to be paid from the debtor’s patrimony, we understand that the claim has no value if the debtor’s patrimony is empty. The creditor cannot pay themselves directly from the person (can’t force a person to work for us/make them slaves)

- The creditor’s rights do not have economic substance if the debtor’s patrimony is empty: so the creditor must have a power within the framework of the link of obligations to the debtor’s assets

- The limit on the creditor’s power of constraint is thus offset by the powers the creditor has over the debtor’s assets (called the common pledge of the creditors)

** Important thing to understand is the relationship between the common pledge of creditors and the effects of the obligation (see this in fundamental texts concerning the pledge in CCQ 2644, 2645, 2646)

Common pledge of creditors – the realization of the consideration of the creditor’s right over the debtor’s assets

- The important thing to understand is the relationship between the right of common pledge and the effect of the obligation. The common pledge of creditors is an allocation, by law, of the debtor’s assets to the performance of his obligation

- The pledge does not refer to real rights, as is the case of some other civil regimes. The common pledge here is an insurance – a patrimonial guarantee within the framework of personal rights

- Creditor’s right: 1) addresses to judge; 2) can have the property seized; 3) sell the goods; 4) to be paid with the selling price of those goods

- Foundational texts concerning the common pledge of creditors : CCQ 2644: The property of a debtor is charged with the performance of his obligations and is the common pledge of his creditors.

- The principle of the common pledge of the creditors is that there is affectation by the law over the debtor’s property to execute his obligations (assigned by law to the debtor’s assets in order to fulfil his obligations)

- The pledge doesn’t absolutely consist of a real right – the common pledge means that there’s a patrimonial assurance/guarantee, but not in the sense of a real right (it’s an accessory right)

- The common pledge means that it is an insurance and guarantee of assets, but not in the meaning of a real right; the most concrete representation of the creditor’s right is to take legal action to obtain the payment

- This means two things, which appear in CCQ 2645 and CCQ 2646: extends to future assets

126Nicole SpadottoCCQ 2645: Any person under a personal obligation charges, for its performance, all his property, movable and immovable, present and future, except property which is exempt from seizure or property which is the subject of a division of patrimony permitted by law. / However, the debtor may agree with his creditor to be bound to fulfil his obligation only from the property they designate.

- The debtor of an obligation, the one who has personally committed himself, must fulfil his obligation on all his movable and immovable property, extending to present and future assets, because he’s committed all the assets of his patrimony.

- The debtor of an obligation must fulfil his obligation on the totality of his movable and immovable objects

- This is the idea of creditor’s pledge : that the totality of the patrimonial assets are to assist in the payment/serve as a basis for payment – the debtor undertakes to pay the creditor from all his assets

- The debtor cannot claim to be engaged for only part of his patrimony/claim to be liable simply for part of his assets. He cannot declare himself insolvent on the pretext that there are simply a few assets on which he could pay his claim (he would have to divide his patrimony to do so per CCQ 2)

- A person who is under an obligation commits himself on present and future movables, because patrimony contains present and future elements. He does not commit himself, however, to except goods which are un-seizable assets, or those which are subject to patrimonial division permitted by law

CCQ 2646: Creditors may institute judicial proceedings to cause the property of their debtor to be seized and sold. / If the creditors claim together, the price is distributed proportionately to their claims, unless some of them have a legal cause of preference.

- Creditors can take legal action to be paid – all is organized around patrimony. Creditors can take legal action to get paid for the debtor’s property (ie, to have it seized and sold). The concrete aspect of the right to enforcement is the bailiff who comes to seize and sell

- Since the patrimony is the effective real guarantee in the security of things for the right of the creditor, the creditor is granted a number of protections in the form of powers

- These powers are counterparts of the fact the creditor does not have direct power over the person, so long as the person is constituted as such by patrimonial and extra-patrimonial rights

The creditor’s three powers- Since property is the effective and real guarantee of the creditors rights, in a way,

the creditor is granted a number of protections in the form of powers – these protections are to counterweigh that the creditor doesn’t have direct power over the natural person. Since there is no direct power of coercion on the person, one can only act on his patrimony. In return, the creditor has three powers:

- 1) Provisional measures: A power to preserve the efficacity of the right to the patrimony (general power to preserve effectiveness of his right to the property)

o Goes backwards from conservatory measures- 2) Oblique action: A power to act in place of the debtor to preserve his rights (at

execution)o An oblique action: the creditor acts in place of the debtor to preserve the

right of execution/possibility of being paid (the right to enforcement) - 3) Paulian/recovatory action (inopposabilité): A power to control the patrimonial

behaviour of the debtor o Revoking action that sanctions a number of breaches – sanction a certain

number of breaches of the patrimonial behaviour expected of a considerate debtor

** Limits to the creditor’s three powers: by their economy (very nature of the obligation): it’s necessary to balance the right to performance of the obligation against the partial

127Nicole Spadottoalienation of freedom at the source of the link of obligation. It will be necessary to balance the right to the performance of the obligation against the partial alienation of freedom that is at the root of this link of obligation

Conservation measures CCQ 1626: A creditor may take all necessary or useful measures to preserve his rights.

- Expression “protective measure” deals with the performance of the obligation - The judge can be asked for any type of patrimonial measure relating to present or

future property, which would be appropriate to guarantee the enforcement of the right within the strict limit of the obligation

- Two things to understand: o 1) in the order of substantive rights, this means potentially a creditor can

reclaim any form of measure to properly conserve his rights to execution, which can include seizing and selling

o 2) read the substantive principle in line with the procedural framework (CCP)- The CCQ sets out the principle that gives the creditor this right, but the CCP gives

us the concrete measures. The substantial right of the creditor can only be understood in the procedural framework because the conservation measures must refer to something concrete

- Provisional measures (CCP)o 1) Seizures before judgement (CCP 516-523)

CCP 518: With the authorization of the court, the plaintiff may seize the defendant’s property before judgment if there is reason to fear that recovery of the claim might be jeopardized without the seizure.

This reflects the creditor’s power under private law. In situations where it’s thought the debtor won’t pay, a seizure may be made

o 2) Sequestration (CCP 524 and onwards) CCP 524: The court, even on its own initiative, may order the

sequestration of disputed property if it considers it necessary to preserve the parties’ rights in the property. When ordering sequestration, the court designates the sequestrator or convenes the parties to appear before it on a specified date to choose the sequestrator. / If an appeal has been initiated, the court of first instance may order sequestration of the property.

Note the vocab: the act of sequestering itself, and the third party is called a sequester (the sequesteration is both the act – putting in the hands of a third party – and the third party itself)

The judge can pronounce the sequester, even without application of the creditor – this is when (usually) property is put in the hands of a third party until the dispute is resolved

This is a conservatory measure. It can be pronounced by the judge alone, even without application from the creditor

o 3) Interlocutory injunction (CCP 509-512) CCP 509(1): An injunction is an order of the Superior Court directing

a person or, in the case of a legal person, a partnership or an association or another group not endowed with juridical personality, its officers or representatives to refrain from or cease doing something or to perform a specified act.

Definition CCP 510: A party may ask for an interlocutory injunction in the

course of a proceeding or even before the filing of the originating application if the latter cannot be filed in a timely manner. An application for an interlocutory injunction is served on the other party with a notice of its presentation. / In an urgent case, the court may

128Nicole Spadotto

grant a provisional injunction, even before service. A provisional injunction cannot be granted for a period exceeding 10 days without the parties’ consent.

Article confirms the creditor’s right to assert his rights as he sees fit, within the limits of law. Creditor can use interlocutory injunction when they need to exige (make due) a payment

Interlocutory injunction can even be brought before a proceeding; judge can force the debtor to do something

** Note that these provisional measures take on their significance in the procedural context, even as their principles are in the CCQ

PRESERVING THE DEBTOR’S PATRIMONYCCQ 2644: The property of a debtor is charged with the performance of his obligations and is the common pledge of his creditors.

CCQ 2645: Any person under a personal obligation charges, for its performance, all his property, movable and immovable, present and future, except property which is exempt from seizure or property which is the subject of a division of patrimony permitted by law.However, the debtor may agree with his creditor to be bound to fulfil his obligation only from the property they designate.

CCQ 2646: Creditors may institute judicial proceedings to cause the property of their debtor to be seized and sold.If the creditors claim together, the price is distributed proportionately to their claims, unless some of them have a legal cause of preference.

CCQ 2647: The legal causes of preference are prior claims and hypothecs.

CCQ 2648: Property which, under the Code of Civil Procedure (chapter C-25.01), may be exempted or is exempt from seizure and falls within the limits specified by that Code cannot be seized.

CCQ 2649: A stipulation of unseizability is without effect, unless it is made in an act by gratuitous title and is temporary and justified by a serious and legitimate interest. Nevertheless, the property remains liable to seizure to the extent provided in the Code of Civil Procedure (chapter C-25.01).

iv. Oblique actionOblique action (CCQ 1627-1630)

- Principle: reconstitution of the debtor's assets in the event of lack of diligence or negligence on the debtor’s part

o Lack of diligence: when the debtor doesn’t act like he could act to reconstitute his assets

o Negligence: he leaves his patrimony in a state where it’s not proper to reassure the creditor

- Not used very often, but can be useful for the creditor - If the debtor does not demand his own rights against his debtors, then the creditor

can take action on behalf of the debtor (the debtor, in this case, is the creditor in another relationship)

CCQ 1627: A creditor whose claim is certain, liquid and exigible (due) may, in the debtor’s name, exercise the rights and actions of the debtor where the debtor, to the prejudice of the creditor, refuses or neglects to exercise them.

- There are conditions relating to the claim that determine whether the creditor can act obliquely (related to terms and conditions). Applies to patrimonial and extra-patrimonial rights.

- 1) Claim must be certain, liquid, and exigible (due)


In short: this is the possibility for a creditor to act against the debtor of his debtor, when the debtor of the creditor acts to the detriment of the creditors right or creates an injury against the creditor. The creditor doesn’t obtain the creditor’s rights. Rather, he acts in the debtor’s place. The oblique action places the payment in the patrimony of the debtor who is entitled to it. However, if the debtor has another creditor of a higher rank, it’s possible that this action will be for the benefit of another creditor. Oblique action benefits all of the creditors, since the amount returns to the patrimony of the debtor. The insolvency of the debtor is not strictly necessary, but Baudouin, Jobin, et Vézina say that it’s only the insolvency of the debtor which creates the harm (but this is up for debate).

129Nicole Spadotto

o a) Certain: claim must exist, there must be an identifiable source (the legal existence of one). Presents a certain modality/character that’s probably not conditional. If it’s conditional, it’s not necessarily certain. It must have an identified legal source.

o b) Liquid: claim must be represented as a sum of money (ie, represented in a form of money)

o c) Exigible (due): the term is up and the payment is due (not in the long term) o ** When the creditor presents these three characteristics, the principle of the

action is acquired by the creditor. BUT ATTENTION! It’s an action that’s taken in the name of the debtor

- 2) The inaction of the debtor (default)o A creditor can only act in event of a default of the debtor o Substantive condition. When the debtor refuses to exercise his proper actions

– it must be noted that the debtor does not act when he could acto This is a substantive condition

- 3) Prejudice suffered by the creditor (insolvancy?) o Inaction is not a sufficient condition; the text also requires that the inaction

be detrimental to the creditor (harm). The creditor’s right to act is justified by the prejudice suffered by the creditor

o The damage must be assessed in light of the debtor’s insolvency (his inability to pay) vis-à-vis the creditor – note that oblique action is not a general power to interfere in the debtor’s affairs, but rather a power to act to preserve his right to payment

o Must ask when the creditor’s right is threatened: insolvency is the ideal type of damage (because the payment is obviously threatened), but the prejudice can also be less than insolvency

Ie, when a debtor is not yet insolvent, but because of his inaction is at risk to become insolvent (can imagine the creditor would suffer sufficient harm because 1) future harm can be compensated when it’s certain (if insolvency is inevitable, it’s a definite/sure/certain prejudice, which therefore gives rise to possibility of oblique action); 2) Code says prejudice isn’t necessarily insolvability because the legislature used the word “prejudice” and not “insolvency” (suggesting harm can be less than insolvency)

Note, however, that the most damaging thing for a creditor is the debtor’s insolvency, which can give rise to an oblique action

o This isn’t a creditor’s power to interfere in the debtor’s affairs, but a power to act to preserve the right to payment

CCQ 1627(2): However, he may not exercise rights and actions which are strictly personal to the debtor.

- These rights are excluded from the oblique action – rights exclusively attached to the debtor’s person may not be exercised by the creditor by means of an oblique action (ie, alimony claim; one cannot act obliquely in divorce or contestation of filiation either). This means exclusively extra-patrimonial rights.

- This doesn’t only mean extra-patrimonial rights (though these are clearly included here), but also exclusive economic rights – because these rights are deeply linked to existing personal relationships that aren’t strictly economic relationships (again, like an alimony claim or maintenance claims)

Defenses available to the third party against whom the creditor is exercising the oblique actionCCQ 1629: The person against whom an oblique action is brought may set up against the creditor all the defenses he could have set up against his own creditor.

130Nicole Spadotto

- This is the consequence of the enforceability of the creditor exercising his debtor’s right on behalf of that debtor

- Where if debtor 2 has a defense against debtor 1 (his creditor), and the creditor is acting obliquely against debtor 2, any defense debtor 2 has against debtor 1, he can raise against the creditor

The legal mechanism of oblique actionsCCQ 1630: Property recovered by a creditor in the name of the debtor falls into the patrimony of the debtor and benefits all his creditors.

- Note that the assets collected by the creditor in this context fall into the debtor’s assets, and thus benefit everyone – this is the action that reconstitutes the common pledge of the creditors (altruistic action in some ways, however this isn’t quite true because the creditor acts obliquely and at the same time assigns his debtor.)

- Mechanism: the creditor acts on behalf of his debtor so that the positive effects of the action fall within the debtor’s patrimony (the goods will always pass through the debtors assets, and not go directly to the creditor’s assets)

- It’s a line – the debtor’s debtor pays the creditor’s debtor, who will then pay the creditor – so doesn’t go directly to the patrimony of the creditor

- The oblique action thus reconstitutes the common pledge of the creditors. It therefore can benefit everyone. However, it’s possible to simultaneously by the same authority act obliquely and assign the debtor for payment

OBLIQUE ACTIONCCQ 1626: A creditor may take all necessary or useful measures to preserve his rights.

CCQ 1627: A creditor whose claim is certain, liquid and exigible may, in the debtor’s name, exercise the rights and actions of the debtor where the debtor, to the prejudice of the creditor, refuses or neglects to exercise them.However, he may not exercise rights and actions which are strictly personal to the debtor.

CCQ 1628: It is not necessary for the claim to be liquid and exigible at the time the action is instituted, but it is necessary that it be so at the time judgment is rendered.

CCQ 1629: The person against whom an oblique action is brought may set up against the creditor all the defenses he could have set up against his own creditor.

131Nicole Spadotto

CCQ 1630: Property recovered by a creditor in the name of the debtor falls into the patrimony of the debtor and benefits all his creditors.

Messier c. PetersOblique action allows a debtor's creditor to act on his behalf in order to protect his own claim. It is accepted that Messier is a creditor of the consortium as a partner to whom a portion of the profits must be allocated. But the doctrine generally requires the creditor to prove its interest by demonstrating the debtor's insolvency:

Indeed, as long as the debtor remains solvent, i.e. his assets are sufficient to guarantee the payment of the claim, the creditor's rights are not in danger and he does not suffer any prejudice.

In this case, Messier has not demonstrated the insolvency of the consortium. He also pointed out that it was impossible for the latter to act, given not only the dispute between Peters and Messier, but also the existence of a dispute between Messier and his own partner, Famelart. Messier's own claim depends on the outcome of the oblique action. He therefore has a sufficient legal interest in the very particular circumstances of this case.

According to article 1627 C.C.Q., however, oblique action excludes the rights attached to the debtor's person. Among these rights is the right to reputation. Messier's claim for damage to the consortium's reputation cannot therefore be the subject of the derivative action.

MacDonald and Brierley, “Quebec Civil Law”THE OBLIQUE ACTION

- The essence of the oblique action is to permit creditors to exercise the rights of their debtor, when to their prejudice he or she refuses or neglects to exercise their rights

- Main characteristics: 1) the creditor takes the action in the name of the debtor, and functions as the debtor’s representative; 2) because debtors may exercise or decline to exercise legal rights as they wish, the creditor must be able to establish significant prejudice arising from the failure to act (usually involves proving the debtor’s insolvency or impending insolvency)

- To be entitled to bring the action, the creditor must have a claim that is 1) certain; 2) liquid; 3) due- The debtor must display positive signs of inaction. - The claim that the debtor refuses or neglects to exercise need not be a judicial action, but it must

appertain to a sizable patrimonial right – a debtor’s extra-patrimonial rights, in principle, may not be enforced obliquely because they’re attached to the person

- If the oblique action succeeds, the claim recovered gives no special preference to the creditor who undertook it. Rather, the claim merely enters the debtor’s patrimony, where it becomes part of the common pledge of all creditors, to be distributed according to the ordinary rules of the Code

- In cases where the creditor is merely chirographic, this feature is a strong disincentive to bringing an oblique action

- Other ways a creditor can monitor a debtor’s patrimony (which are to the sole benefit of the creditor) is to 1) seizure by garnishment of an obligation or payment owing to the debtor; 2) other circumstances by means of a “direct” action given personally to a creditor to enforce a debtor’s rights

V. Action of inopposabilité (Paulian action)

Paulian Action: action in unenforceability. This is for fraudulent acts, or to sanction fraudulent organization of liabilities, when a debtor attempts to remove assets from his patrimony in order to deny the creditor’s recovery. Historically, this action often followed a bankruptcy (means of fighting insolvency).

- This action protects the common pledge of the creditors

132Nicole Spadotto

- This action is not against the fraudulent debtor, but against the third party: confers a creditor’s action against a third party for the benefit of the creditor who initiates it

- A Paulian action is an exceptional remedy because it limits contractual freedom and involves third parties. However, its conditions of exercise must not be interpreted in such a rigid manner that the objective pursued by the legislator is diverted in such a way as to make the remedy illusory (SLV Films inc. c. Sakellaropoulo)

- Fraud : to divest oneself of your assets, as a debtor, to the detriment of one’s creditor

- For the creditor to have the acts performed by the debtor against a third party declared ineffective (fraudulent). It’s sometimes said that this is an action to revoke the fraudulent acts

- This action is based on the obligation between the creditor and the debtor, but it blocks the third party from receiving the payment for the creditor’s benefit (the benefit of the creditor who agrees to this action)

- This is a partial limitation on liberty: creditor is interfering in the affairs of the debtor and third parties who have contracted. It controls the behaviour of the debtor, which is a radical consequence

- Paulian action is an act of the creditor to annul the fraudulent act of the debtor: to control the fraud which prejudices the creditor

- A value is capitalized: the proprietary structure means that the obligation can be considered not just as a link, but as property (we see this as a security that can be traded on the market)

- Two fundamental elements : o 1) The link of obligation: the relationship between the debtor and the

creditor, by virtue of the existence of the link of obligations, creates a manifestation of certain patrimonial power

o 2) Moral idea to the obligation: the link of obligation means that the “good debtor” has a moral of obligation, in that they cannot act fraudulently (Paulian action in the Code controls the bad faith of the debtor today)

Conditions of a Paulian Action- The debt must be :

o Prior to the action (the debt must precede the Paulian action; the debt has to exist before the action is taken)

o Certain (ie, not a contingent claim)o Liquid (ie, pecuniary)o Exigible (ie, the term must be expired)

- The action must be : o Within one year (from the day the creditor has knowledge of the damage)

CCQ 1635: The action is forfeited unless it is brought within one year from the day on which the creditor learned of the injury resulting from the act which is attacked, or, where the action is brought by a trustee in bankruptcy on behalf of all the creditors, from the date of appointment of the trustee.

o Sanctioned by a forfeiture, must be raised ex officio by the judge. Different starting points depending on whether the action is individual or collective - which shows that the Paulian action finds in bankruptcy a privileged modality.

- In regards to the act in question :o CCQ 1631 (fundamental text) : A creditor who suffers injury through

a juridical act made by his debtor in fraud of his rights, in particular an act by which the debtor renders or seeks to render himself insolvent, or by which, being insolvent, he grants preference to

133Nicole Spadotto

another creditor, may obtain a declaration that the act may not be set up against him.

Injury : insolvency is not the only measure of harm (just one example in the Code). But the problem is that any act of impoverishment could be interpreted as an injury. Requirement for fraudulent action limits the scope of this.

Very difficult in practice to distinguish fraud and injury, but the text asks us to do so

Injury is the patrimonial lesion suffered by the creditor (the cause of the insolvability is the fraud, and this is the prejudice)

Prejudice isn’t simply insolvency: the second part of the text makes it more precise by saying “renders or seeks to render himself insolvent” (act which is either insolvent or intends to make himself insolvent – two psychologically intentional and subjective elements)

o Even beyond this, a creditor can challenge an act done by a debtor wherein the debtor is already insolvent but gives a preference to another creditor

Fraud : it’s the intention of the debtor to act in a way that will prejudice the creditor

Fraud is used as a stand-alone element and a definition of the prejudice/injury derived by the creditor

Fraudulent intention is prejudicial intention, or the knowing that a prejudice/injury will be caused

Juridical act : payment to a third party Does payment made in preference to another creditor count as

a juridical act made in fraud, causing injury? Must look at whether fraud was there (if no intent of fraud, then this is valid). There must be an intentional element allowing the Paulian action to be triggered.

Presumptions of a Paulian action- Central element is fraud

CCQ 1633 (case of acts of gratuity): A gratuitous contract or a payment made in performance of such a contract is deemed to be made with fraudulent intent, even if the other contracting party or the creditor was unaware of the facts, where the debtor is or becomes insolvent at the time the contract is formed or the payment is made.

- Fraud is presumed if the debtor 1) was insolvent at the time of the payment; or 2) becomes insolvent by the payment

- Special case which establishes a very strong presumption – no need to prove intent CCQ 1632 (case of onerous acts, like bilaterial contracts): An onerous contract or a payment made in performance of such a contract is deemed to be made with fraudulent intent if the other contracting party or the creditor knew the debtor to be insolvent or knew that the debtor, by the juridical act, was rendering himself or was seeking to render himself insolvent.

- Fraud is presumed if the payee knew 1) the debtor was insolvent at the time of the payment; or 2) the debtor would become insolvent by the payment

Effects of a Paulian action: unenforceability/inopposabilité of the fraudulent act - In the relationship between the creditor and the third party:

o Unenforceability differs from nullityo Paulian action/unenforceability leads to a direct action in the hands of the

third party o The assumption of the transfer to a sub-purchaser

- In the relationship between the debtor and the third party:


The person who contracted with the debtor was not acting in good faith (Morin)

134Nicole Spadotto

o The act remains valid: the third party retains his rights and actions, though the scope can be diminished in fact

o May take action against the fraudulent seller. In practice, the seller risks being insolvent anyways

** Note: to be declared a Paulian action, the act must have been made with the intention to defraud

PAULIAN ACTION CCQ 1631: A creditor who suffers injury through a juridical act made by his debtor in fraud of his rights, in particular an act by which the debtor renders or seeks to render himself insolvent, or by which, being insolvent, he grants preference to another creditor, may obtain a declaration that the act may not be set up against him.

CCQ 1632: An onerous contract or a payment made in performance of such a contract is deemed to be made with fraudulent intent if the other contracting party or the creditor knew the debtor to be insolvent or knew that the debtor, by the juridical act, was rendering himself or was seeking to render himself insolvent.

CCQ 1633: A gratuitous contract or a payment made in performance of such a contract is deemed to be made with fraudulent intent, even if the other contracting party or the creditor was unaware of the facts, where the debtor is or becomes insolvent at the time the contract is formed or the payment is made.

CCQ 1634: The claim must be certain at the time the action is instituted, and must be liquid and exigible at the time the judgment is rendered.The claim must exist prior to the juridical act which is attacked, unless that act was made for the purpose of defrauding a subsequent creditor.

CCQ 1635: The action is forfeited unless it is brought within one year from the day on which the creditor learned of the injury resulting from the act which is attacked, or, where the action is brought by a trustee in bankruptcy on behalf of all the creditors, from the date of appointment of the trustee.

CCQ 1636: Where it is declared that a juridical act may not be set up against the creditor, it may not be set up against any other creditors who were entitled to institute the action and who intervened in it to protect their rights; all may have the property forming the subject of the juridical act seized and sold and may be paid in proportion to their claims, subject to the rights of prior or hypothecary creditors.

Réserve de bois Morin et Blanchette inc. c. TremblayFacts:The appellant is a familial enterprise specializing in the selling of construction materials and renovation products. They sold to the defendant, Tremblay, materials to help with the construction of two immovables in Chicoutimi. The appellant hypothecated both to pay for the materials. Tremblay acquired one piece of land (26) to construct from Couillard. The payment of sale was guaranteed by a hypothec, with the act containing a resiliation clause (résolutoire). The other piece of land (34) had been acquired from a person who was not party to the instance. C consented to T to form an ouverture of rotating credit line. T sold lot 26 to C and S (conjointe of T). The transaction was rendered necessary by reason of costs relied on for the construction, and the impossibility of T obtaining a hypothecary near a financial institution. In the act of sale, T declared that the immovable was free of all hypothecs, except that which was consented to by C. C gave a formal notice to T to obtain a release of the two hypothecs which legally affected the immovable. He invoked a default on the terms of the act of the hypothecary. In view of his incapacity, T sold to his conjointe (S) and C lot 34 to extinguish the claim of C and exercise by the hypothecary recourse. The price of sale was largely inferior to their value. As a result, the appellant initiating a personal action against T to recover the credit.

Issues:1) Did the judge of first instance err in retaining the existence of legal hypothecs of the supplier of

135Nicole Spadottothe material on the immovables targeting the appellant in an action of “inopposabilité”?

2) Did the judge of first instance err in deciding that the credits of the appellant weren’t before the contested judicial acts?

Judicial History:At the Court of Appeal. The original judgement was from the Court of Quebec (Chicoutimi), which rejected the introductive request of instance in “inopposabilité” with damages. The first instance judge estimated that the recourse in “inopposabilité” because the appellant is a guarantee creditor, and didn’t demonstrate an impossibility in exercising their hypothecary recourse. In addition, the judge concluded that the credit of the appellant wasn’t previous to the contested acts – they understood the rights of C on the immovables before the delivery of the materials.

Decision:The judge of the first instance was wrong to refuse the appellant the right to exercise a recourse in inopposabilité for the motive that there was a guaranteed creditor. The sales took claim after the appellant’s claim – and thus the appellant’s claim meets requirements for inopposabilité. Appeal allowed with costs.

Legal Reasoning:Thibault: The availability of the unenforceability remedy for secured creditorsThe objective of this recourse isn’t to make annulled a contested act, but to permit a creditor to exercise their rights over an object of the contested act as if it hadn’t happened. The CCQ looks at “inopposabilité” in articles 1631-1636. The court determined necessary conditions to an action of inopposabilité

1) The demander must have, against the debtor, a credit that’s valid and prior to the act of alienation2) The act of alienation must cause a prejudice to the demanding creditor3) The debtor must have acted with the intention of fraud4) The person who contracted with the debtor was not acting in good faith

The elements in paragraphs 1-2 pose a problem in the present case. Before going to the question of prejudice caused to the appellant by the alienation of the two immovables, there is a precise link of the credit of the appellant – that’s certain, liquid, and “exigible” (payable/due). When the seller of an immovable wants to avail himself of a resiliation clause, he must respect the relative rules of the hypothecary recourse (take a payment and measures prerequisite to the exercise of his recourse per CCQ 1743 and 1749). If the creditor wants to exercise a hypothecary recourse, he must also submit prerequisite rules to the exercise of the recourse. Per CCQ 2758, a pre-notice to exercise a hypothecary right must denounce the default and recall the right of the debtor or a third party to remedy the default. Per CCQ 3017: “The registrar is bound to notify, as soon as possible, each person having required registration of his address, that the property in which he holds a published right is the subject of a notice of intention to exercise a hypothecary right” (object of the hypothecary) Appellant could have satisfied it by remedying the default and thus recovered its debt to the extent of the published mortgages (CCQ 2761) or ensured that the immovable was sold in court (CCQ 2779, 2780). Action in inopposabilité implicates a measure of intervention on the part of the creditor in the business of patrimony of their debtor – doctrine and jurisprudence requires that the creditor establishes the existence of a serious prejudice stemming from the contested act. It’s for this reason that the recourse for inopposabilité is generally reserved to unsecured creditors (Baudouin, Jobin, Vézina say that the doctrine in the law of obligations sign that the recourse of inopposabilité is generally refused to guaranteed creditors). In the CCQ, the hypothec is a real right on the good, which confers on the holder the right to follow the good in whatever hands it may be (CCQ 2660, 2751). The hypothec attributes equally to one’s title a right of preference (CCQ 2646 and CCQ 2647). Even if one has legal hypothecs. Even though she holds two legal hypothecs, the appellant did not choose to exercise a hypothec recourse. It should be recalled that the hypothecary creditor benefits from the principle that the debtor's assets constitute the common pledge of his creditors (CCQ 2644, 2645). In consequence, the hypothecary creditor has a choice in their recourse (CCQ 2748) – he can exercise a personal recourse against their debtor, a hypothecary recourse, or a recourse personal AND hypothecary. The coexistence of many types of recourse permit the creditor to exercise that which is most appropriate in the circumstances. Here, the appellant decided to exercise a

136Nicole Spadotto

personal right against T (the defendant). This choice maybe resulted in the fact that the validity of their hypothecary resource was contested. Must exercise the hypothecary right in the six months at the end of the work (CCQ 2727). The registration of an interest in the land register carries with it a simple presumption of the existence of that interest (CCQ 2944). If registration is presumed valid, the preservation of the right is far from being acquired here since the appellant did not publish a notice of the exercise of a mortgage recourse or such recourse against the immovables within the six-month period provided for in CCQ 2727.

The character of opening an action for “inopposabilité”Existence of a claim prior to the contested legal act (CCQ 1634 – claim must be certain when the action is brought, prior to the contested legal act). Baudouin, Jobin, and Vézina say these conditions were adopted by legislature to not infringe on freedom of K. In this case, conditions of certainty, liquidity, and enforceability are not a problem. Here, only one of the precedent is not realized. The creditor cannot prove that he’s been defrauded or that he suffers harm if the contested transaction was made before obligation was incurred. The trial judge held that the appellant’s claim didn’t predate the contested transactions, because she acted knowing that C had rights in the building. So the sale to T is a logical continuation of C’s original rights. The appellant know C had sold the land to T, and also that he held mortgage rights – but the revolving credit agreement with the hypothec guarantee (largest part of future receivable) hadn’t been published. Thus, the judge was wrong to say the sale of the buildings were prior to the appellant’s claim. Even if the sales were part of C’s hypothecary rights, it cannot be argued that the appellant knew the extent to which C’s debt would increase. The sales took claim after the appellant’s claim – and thus the appellant’s claim meets requirements for inopposabilité.

Ratio: The court determined necessary conditions to an action of inopposabilité

1) The demander must have, against the debtor, a credit that’s valid and prior to the act of alienation2) The act of alienation must cause a prejudice to the demanding creditor3) The debtor must have acted with the intention of fraud4) The person who contracted with the debtor was not acting in good faith

Notes: Inopposibilité: Historically referred to as a "revocatory action". It is for fraudulent acts, when a debtor tries to remove assets from his assets in order to deny the recovery of his creditor. Originally, it was a cure for bankruptcy.

MacDonald and Brierley, “Quebec Civil Law”PAULIAN ACTION

- Operates as a compliment to the oblique action by allowing creditors, in their own name, to impeach the acts of their debtors in fraud of their rights

- The claim whose recovery is in peril must antedate the act under impeachment- As with an oblique action, the creditor’s claim here must be certain, liquid, and due – though

fraudulent acts that occur pending a creditor’s lawsuit may also be attacked - The action is subject to a strict delay of forfeiture: it must be taken within one year of the ordinary

creditor’s knowledge of the fraudulent act- Two substantive preconditions imposed on the exercise of the Paulian claim: 1) the debtor’s act

must be fraudulent; 2) the creditor must suffer prejudice- To assist a creditor in proving fraud, the Code establishes many presumptions: 1) gratuitous

contracts entered into by an insolvent debtor are presumed fraudulent; 2) even an onerous contract may be deemed fraudulent if the co-contractor knows the debtor to be insolvent (but these cannot be impeached as against a third party in good faith); 3) any payments made by an insolvent person to a creditor who knows of the insolvency are deemed to be fraudulent

- Effects of this action vary as between the suing creditor and the other creditors. A successful Paulian claim means the act impeached cannot be set up against the pursuing creditor – so other creditors who have not intervened in the action derive no benefit from the impeachment

- Thus, if an object is deemed to have been fraudulently alienated, or payment fraudulently made,

137Nicole Spadottothe judgement will order the object to be seized and sold, or the value of the payment disgorged for the exclusive benefit of the creditor bringing the Paulian action

- If the value of the object or payment surpasses the creditor’s claim, the excess accrues neither to the debtor, nor the other creditors, but to the third-party defendant

- If several creditors bring a Paulian action, they receive payment according to the normal distribution scheme, including preferences, of the CCQ

c. Transfer and mutations of an obligationTransferring obligations

- Premise: the link of obligations between people can be transformed into a value/good. If this is the case, it’s property, which is actually a receivable and can be sold. In other words, obligation is an asset in the patrimony of the creditor, so it may be sold as an asset

- Demonstrates an important transformation for the notion of obligations: it’s seen not only as a legal relationship, but also a good (which puts forth a capitalist vision of the law)

i. Assignment of debt/claimTransfer of obligations: assignment of debt

- The “assignment of debt” (CCQ 1637) is the selling of debt – assignment is a sale that relates to the receivable, an object

- Presented as a sale, a link of obligations, but principally it’s the relationship between two patrimonies

- Concerns two legal relationshipso 1) The one between the creditor (assignor, the seller of the receivable) and

the debtor (the assigned)o 2) The one between the debtor (assigned) and the new creditor (assignee –

buyer of the receivable)

Conditions- Substantive

o Any claim is transferable in theory, but some are excluded from assignment for reasons of public order

CCQ 1610: The right of a creditor to damages, including punitive damages, may be assigned or transmitted. / This rule does not apply where the right of the creditor results from the infringement of a personality right; in such a case, the right of the creditor to damages may not be assigned, and may be transmitted only to his heirs.

o The parties can agree on the non-transferability of a receivableo If assignment is a contract, then its subject to the general regime of contract

law o If the assignment is granted in fraud, then the sanction is not the nullity of

the act, but rather is its unenforceability - Formal

o The deed is valid even without the participation of the assigned debtor (the debtor ceding his debt is not party to the crediting relationship), even though it’s their debt that’s transferring

CCQ 1641(1): An assignment may be set up against the debtor and third persons as soon as the debtor has acquiesced in it or received a copy or a pertinent extract of the act of assignment or any other evidence of the assignment which may be set up against the assignor.

Acquiescence of the debtor : a demonstration of any recognition of the transfer of the debt on the part of the debtor. Not consent, because the debtor doesn’t have a choice in the

138Nicole Spadotto

matter. It’s simply the moment where the contract of the transfer of the claim has been concluded, and the debtor is informed of the act (that the claim has been ceded to the assignee). The debtor recognizes that he must be liberated from the hands of the assignee, and not the original creditor (important to inform the debtor of the transfer so he knows from whom he can free himself/pay). If there’s not acquiescing or proof of knowing of the transfer, the debtor will pay the original creditor. This payment will be valid, and the assignee will need to get the payment form the assignor/original creditor

Reception by the debtor of a copy or extract of the act : receipt by the debtor of a copy of the deed renders it enforceable (or any other evidence of the assignment opposable to the debtor)

“Set up against” : opposable. The moment of opposability by the parties is the assignment of the credit. Issues of opposability include payment and modes of defense

Validity: concerns the assignor and the assignee (the transfer of the debt from the old creditor to the new one: relationship between the creditor and buyer)CCQ 1637: A creditor may assign to a third person all or part of a claim or a right of action which he has against his debtor / He may not, however, make an assignment that is injurious to the rights of the debtor or that renders his obligation more onerous.

- The obligation that links the creditor with the debtor needs to be valid before being sold

- No exact stipulations for validity, as CCQ 1637 doesn’t really give indications - Therefore, it defers to the conditions of the common law (conditions for the validity

of any contract) o Can a conditional credit be ceded? If it’s clear, yes, and if the assignee

accepts. Conditional rights are uncertain, and may never exist. Even though there’s an uncertainty of being paid, the creditor just transfers this risk to the assignee. The assignee agrees to assume this risk. This is because the conditional receivable partially exists.

Opposability- Concerns the question of the transaction between the assigned/debtor and the

assignee/new creditor. The buyer acquires the assignor’s right against the assignee. Is the transfer of ownership of the claim enforceable against the debtor/assigned?

- Very important for the transaction between the assigned (debtor) and assignee (new creditor). Makes is possible to take action against the debtor

- Opposability allows the assignee to act against the debtor to obtain the claim – if the assignment is unenforceable (inopposable), the assignee has no action against the debtor and only an action against the creditor/assigner

o The new creditor can oppose his right to the claim against others (meaning he can claim it as his own)

- General modes of opposability : o 1) need debtors acquiescence (simple knowing, not acceptance); 2) receipt of

the copy or extract of the deed; 3) proof of assignmento Acquiescence of the debtor: doesn’t refer to consent or acceptance, but to

simple knowledge (being aware and informed) At the time of the assignment contract, the debtor is invited to

become aware of the assignment. He must be made aware that in fact, he must now be discharged from the cessionaire and not the original creditor


Effects of the sale: between the cessionaire (the buyer/assignee) and the debtor. The debtor is not a party to the assignment/transfer of the debt/claim. This immediately raises the question of whether the right can be opposed.


That the new creditor can recover from the debtor.It wouldn’t be opposable when the person is insolvent.


Validity of the assignment: the contract for the sale of the receivables between the assignor/original creditor and the assignee/cessionaire/buyer. The conditions for the validity of the assignment of the receivables. References to the general regime of contractual obligations.

139Nicole Spadotto

We do not want the debtor to make a payment to the original creditor. In such a case, the debtor would have a recourse against the original creditor (undue reception) as the debtor could be forced to pay twice. If the debtor is not informed of the transfer, the debtor wouldn’t have any recourse against him for payment made in good faith to the original creditor.

- Special modes of opposability : o Universality : an enterprise may transfer its receivables to a financing

company. To be opposable to third parties, must be registered in the RDPRM (Le Registre des droits personnels et réels mobiliers)

CCQ 1642: The assignment of a universality of claims, present or future, may be set up against debtors and third persons by the registration of the assignment in the register of personal and movable real rights, provided, however, that the other formalities whereby the assignment may be set up against the debtors who have not acquiesced in it have been observed.

o Suretyship (caution): Suretyship is a contract by which a person, the surety, binds himself towards the creditor, gratuitously or for remuneration, to perform the obligation of the debtor if he fails to fulfil it.

- Stakes of opposability :o The payment : from the debtor’s perspective, he still has to pay the money to

someone. Liberation of the debtor at the hands of the new creditor/assignee. To be released from the hands of the old creditor as soon as the transfer is opposable.

CCQ 1643: A debtor may set up against the assignee any payment made to the assignor before the assignment could be set up against him, as well as any other cause of extinction of the obligation that occurred before that time. / A debtor may also set up any payment made in good faith by himself or his surety to an apparent creditor, even if the required formalities whereby the assignment may be set up against the debtor and third persons have been observed.

o Modes of defense : when we transfer the claim, we also transfer the modes of defense. We want to give the debtor some defenses against a new and possibly unknown creditor.

Effects of the transferCCQ 1639: Where the assignment is by onerous title, the assignor warrants that the claim exists and is owed to him, even if the assignment is made without warranty, unless the assignee has acquired it at his own risk or knew of the uncertain nature of the claim at the time of the assignment.

- Transferor’s warranty : obligation of the guarantee of the original creditor/assignor in regard to the transfer (obligation to deliver)

- The guarantee of the claim : this isn’t the guarantee of the solvability of the debtor (CCQ 1640), because the transfer of the claim is a transfer of the risk of non-payment.

o The assignment implies the assignor’s obligation to guarantee the assignee (it’s assumed that as soon as you sell the debt/claim, you necessarily guarantee its existence

o Nuances: the transfer of the claim can be done without a guarantee (the Code says this must be stipulated though). But this doesn’t fall into a legal guarantee.

o The guarantee of the existence of the claim is of public order (provided by law), and therefore does not require any mention in the contract – unless cessionnaire acquired a condition at his own risk


The assignment implies the original creditor’s obligation to guarantee the debtor (it is assumed that as soon as you sell the receivable, you necessarily guarantee its existence) (CCQ 1639). The legal guarantee is provided by law (public order), and therefore does not require any mention in the contract. The legal guarantee allows the cessionnaire/buyer/assignee to sue the original creditor if there is a default in the claim (e.g., a default in the debt): nullity of the assigned claim, limitation period). The legal guarantee guarantees the existence of the assignment (i.e. the bond of obligation), but does not guarantee the debtor's solvency (his ability to pay). Legal guarantee does not apply when the cessionnaire/assignee knew at the time of the assignment that the claim was uncertain (e.g. if it is speculative, then it is not guaranteed, because there is a possibility that the claim will be extinguished). A legal guarantee can be excluded by contract. In this case, the assignee acquires the receivable at its own risk. BUT, the parties have the right to extend or limit the guarantee right by contract (when they limit it, they reject it by contractual means as mentioned above). Parties may for example decide to extend the guarantee by guaranteeing the solvency of the debtor by contract.

140Nicole Spadotto

o Legal guarantee allows the assignee to sue the assignor if there is a default in the claim (ie, nullity of the assigned claim, limitation period)

o This is exactly the same as a contract – a contract without an object is null, but a contract can also be a speculation of the parties together (ie, a stock option). It’s same with a claim, which can be speculative, but must still have an object for it to exist).

** The effect of the transfer of the claim is to change the claim, but not to deprive the debtor of his other remedies.

ASSIGNMENT OF DEBTCCQ 1637: A creditor may assign to a third person all or part of a claim or a right of action which he has against his debtor.He may not, however, make an assignment that is injurious to the rights of the debtor or that renders his obligation more onerous.

CCQ 1638: The assignment of a claim includes its accessories.

CCQ 1639: Where the assignment is by onerous title, the assignor warrants that the claim exists and is owed to him, even if the assignment is made without warranty, unless the assignee has acquired it at his own risk or knew of the uncertain nature of the claim at the time of the assignment.

CCQ 1640: Where the assignor by onerous title guarantees the solvency of the debtor by a simple clause of warranty, he is liable for the solvency only at the time of the assignment and to the extent of the price he received.

CCQ 1641: An assignment may be set up against the debtor and third persons as soon as the debtor has acquiesced in it or received a copy or a pertinent extract of the act of assignment or any other evidence of the assignment which may be set up against the assignor.If the debtor cannot be found in Québec, the assignment may be set up against the debtor and third persons upon the publication of a notice in accordance with the rules of the Code of Civil Procedure (chapter C-25.01) for notification by public notice.

CCQ 1642: The assignment of a universality of claims, present or future, may be set up against debtors and third persons by the registration of the assignment in the register of personal and movable real rights, provided, however, that the other formalities whereby the assignment may be set up against the debtors who have not acquiesced in it have been observed.

CCQ 1643: A debtor may set up against the assignee any payment made to the assignor before the assignment could be set up against him, as well as any other cause of extinction of the obligation that occurred before that time.A debtor may also set up any payment made in good faith by himself or his surety to an apparent creditor,

http://legisquebec.gouv.qc.ca/en/showDoc/cs/C-25.01?&digest=

141Nicole Spadotto

even if the required formalities whereby the assignment may be set up against the debtor and third persons have been observed.

CCQ 1644: Where a copy or an extract of the act of assignment or any other evidence of the assignment which may be set up against an assignor is handed over to the debtor at the time of service of an action brought against the debtor, no legal costs may be exacted from the debtor if he pays within the time fixed for answering the summons, unless he was already in default for failing to perform the obligation.

CCQ 1645: The assignment may not be set up against the surety unless the prescribed formalities for the setting up of the assignment against the debtor have been observed with respect to the surety himself.

CCQ 1646: The assignees of the same claim, and the assignor with respect to any remainder due to him, are paid in proportion to the value of their claims.However, persons having obtained an assignment with a warranty of payment are paid in preference to all other assignees and to the assignor, and, among themselves, in the order of the dates on which their respective assignments could be set up against the debtor.

CCQ 1647: It is of the essence of a claim attested by a bearer instrument issued by a debtor that it may be assigned by mere delivery, to another bearer, of the instrument attesting it.

CCQ 1648: A debtor who has issued a bearer instrument is bound to pay the debt attested thereby to any bearer who hands over the instrument to him, except where he has received notification of a judgment ordering him to withhold payment thereof.He may not set up any defenses against the bearer other than defenses concerning the nullity of or a defect in the instrument, those founded on an express stipulation in the instrument or such defenses as he may raise against the bearer personally.

CCQ 1649: A debtor who has issued a bearer instrument remains bound towards every bearer in good faith, even if the debtor shows that the instrument was negotiated against his will.

CCQ 1650: A person who has been unjustly dispossessed of a bearer instrument may not prevent the debtor from paying the claim to the person who presents the instrument except on notification of an order of the court.

Lluelles et Moore, “La cession de créance”The Assignment of Debt

- The assignment of receivables, also known as the conveyance of claims, is the most advanced mode of transmission of the obligation, since it allows the transfer of the claim in its entirety and without the consent of the debtor .

- It is this perception which explains that the obligation could not, under Roman law, be transferred neither during the living of the parts, nor at the death of an individual.

- This principle has subsequently gradually eroded. First of all, the non-eligibility of the obligation in the event of the death of one of the parties was rejected on the basis that the heirs pursued the identity of the deceased. The obligation did not disappear, since the parties remained fictitiously identical, the deceased being replaced by his heir

- Inter vivos claims- It was not, however, a genuine transfer, since the novation proceeded from the extinction of the obligation to be surrendered and the creation of a new obligation binding the debtor to a new creditor. This mechanism had the dual disadvantage of requiring the consent of the debtor to create the new bond as well as causing the disappearance of the features of the original bond and its accessories - such as security.

- In order to avoid the extinction of the initial obligation implied by novation, Roman jurists then resorted to the notion of mandate - the " procuratio in rem suam" .

- Example: Civil Code of Lower Canada also included the assignment of receivables for sale in a chapter entitled "Sale of receivables and other intangible property" (Articles 1570 – 1578 CCLC ).

142Nicole Spadotto

- Civil Code of Québec deals with the assignment of debt within the new chapter devoted to the transmission of bonds (art.1637 - 1650 CCQ).

- After presenting the notion of assignment of receivables (section 1), we will study the conditions (section 2) and the effects (section 3).

- An assignment of claim is a contract by which a person, the assignor , transmits to another person, the assignee , the claim against a third person, the debtor-assigned

- Traditionally, the assignment of debt also played the role of guarantor of a principal obligation. - In the event of non-payment by the debtor, the creditor obtained the claim that the creditor had

with respect to a third party and that it had put in guarantee.- This was the case, for example, with the transfer of the insurance indemnity or the rent transfer

clause, in the context of a mortgage loan granted for the purchase of a rental property. This last clause allowed the mortgagee 11 to perceive himself the rent owed by tenants of the building. Once the transfer was served on the tenants (debtors), they had to pay their rents to the creditor who had given up his place to the mortgage of the rents.

- Other assumptions where the assignment of debt was used mortgage (assignee). - Under the Civil Code of Quebec , the rent-to-lease clause to 13 of the hypothec of claims, with or

without surrender, the latter hypothesis being, since 2009,- Thus, in the case where "A" owes to "B" and "C" pays this debt with subrogation, "C" (subrogated)

obtains the rights of "B" (subrogating) and thus becomes the new creditor of "A" "(Debtor). The practical result, the change of creditor, is close to the assignment of claim, in which "C" (assignee) acquires from "B" (assignor) the claim that the latter had against "A" (debtor). The roles of assignee and subrogated, and assignor and subrogant are then comparable.

- The assignment of receivables treats the obligation as a good, an intangible good, proceeding to the transfer of this "good" independently of any payment. This difference of nature is not without consequences.

- The assignment of claim cannot exist without the consent of the assignor (creditor)- Thus, the assignment of debt must be subrogation can occur in the absence of the consent of the

subrogeant (creditor). - Similarly, the law served on the debtor to be enforceable, while similar formality does not exist in

subrogation. - The assignment of a claim for valuable consideration includes, as in the case of the sale, a legal

guarantee of the existence and validity of the claim, a non-existent guarantee of subrogation (section 1639).

- In case of assignment of a part of the claim, the assignor and the assignee are in principle paid in proportion to their claim (Article 1646), whereas in subrogation, the subrogant has, in principle, priority the subrogee (article 1658).

- The novation by change of creditor was, as we have seen, imagined in Rome to avoid the rule which proscribed the cession of an obligation to a new creditor or a new debtor, impossibility due to an exclusively personalist conception of the concept obligation.

- Novation by change of creditor allowed to obtain this result, but by a mechanism in two stages: extinction of the first obligation and creation of a second, different.

- It is possible, as we have seen in our chapter on the delegation of payment, to confuse this notion with the assignment of debt in certain very specific circumstances. take this example where "A" is, at the same time, debtor of "B" and creditor of "C". "A" then asks "C" to commit to "B" to pay the benefit he ("A") owes to "B". At the same time, "C" indirectly pays what he owes to "A"; there is therefore a double payment. This situation presents a payment delegation case where "A" is the delegator, "B" is the delegate and "C" is the delegate. We could be tempted, at least when delegation is flawed, to argue that there is also a claim, since "A", the assignor, transfers to "B", the assignee, which "C", the assigned, owes him. This assimilation must still be rejected. indeed, in the case of delegation, "C" undertakes to perform the service that "A" owed to "B", and not that "C" owed to "B" -as opposed to the case 35 involving an assignment of receivables.

Conditions of the assignment of a claim:- The assignment of debt is affected by a contract binding the assignor to the assignee, in the

absence of any consent of the debtor- Its existence is therefore subject to substantive conditions attached to these contractors

143Nicole Spadotto

- Like any contract, the assignment of receivables must relate to a lawful object. - In principle, the assignment may concern any type of claim or right of action: the obligation may

relate to a sum of money or any other benefit, the debt may be due, term or conditional.- Although only the assignments of the assignor and the assignee are necessary for the formation

of the assignment of receivables, the effects of that assignment may affect the position of certain other persons

- Article 1641, the assignment is enforceable against the assigned debtor and other third parties, where the debtor has acquiesced in the assignment

- This acquiescence is not a condition for the existence of the assignment, nor is a new and personal commitment of the debtor to the assignee.

- Acquiescence does not require any particular form- Under section 1641, service may also originate either from the surrender to the assigned debtor of

the copy or relevant excerpt of the assignment, or from any other evidence of transferable to the assignor-a mention of the assignment to a statement of account, or an accompanying letter, for example.

- Service may take the form of a notice in a newspaper – to known address of debtor- The assignment must be served on the surety in the same way as it must be served on the debtor,

whereas the assignment of a hypothecary claim must be entered in the land register etc.- Parties may desire a more flexible assignment of receivables. This is particularly the case with the

receivable found by a bearer security. This is a non-registered debt security issued by a debtor who agrees in advance that the mere issuance of this security (its "tradition") will suffice for the valid assignment of the debt.

Effects of the Assignment: To highlight this triangular aspect, we will present the effects of the assignment of debt according to the different relationships created, namely: between the debtor and the transferor (subsection 1); between the debtor and the assignee (subsection 2); between the assignee and the assignor (subsection 3); and third parties other than the debtor (subsection 4).Subsection 1 - Effects between the debtor and the assignor

- The main effect of the assignment is the transfer of the original assignor's claim to the assignee, the new owner.

- This translational effect acts on the debtor by the completion of formalities previously seen. - Thus, before the service of the assignment, the debtor continues to perform his services for the

benefit of his creditor, the assignor- But once the formalities have been completed, the debtor must execute his services with the

assignee. - He is thus released, but only with regard to the transferor. - In the event of a total assignment, the assignor can no longer demand anything from the debtor. In

the case of a partial assignment, the debtor is faced with two creditors. - In that case, the assignor and the assignee are, in principle, paid in proportion to their claim

(Article 1646). Subsection 2 - Effects between the assigned debtor and the assignee

- It is here that the transfer effect of the assignment of claims is principally realized. - The relationship between the debtor and the assignee is precisely that which existed before the

assignment between the debtor and the assignor. - There is no creation of a new link, but removal of the existing link. Admittedly, the relationship is

new, since nothing binds the debtor to the assignee, but the obligation is not new. - Once the publicity formalities have been completed, the assignee acquires the right to demand

everything the debtor owes to the assignor, whatever the price he paid to obtain that right. - The assignee is therefore the only one able to take action, or to give a discharge to the debtor. - The assignee may also claim compensation if it was originally debtor of the debtor assigned.- This principle simply means that the assignment cannot "infringe rights of the debtor, nor make

his obligation more onerous ". - The debtor may object to the assignee any payment he made before the assignment of claim

became perfected against him (section 1643). the debtor may also oppose any other cause of termination of the obligation that occurred before that time-the debt forgiveness granted by the

144Nicole Spadottocreditor (transferor), the prescription of the action or compensation, among other examples.

- The obligor may also oppose the assignee any payment made in good faith creditor apparent, even after the meaning of formalities were completed (art. 1643 s. 2).

- In the case of novation, as we have seen, the initial link disappears taking with it, in principle, all the accessories, especially the securities.

Subsection 3 - Effects Between Assignee and Assignor- The assignee and the assignor are the only parties to the assignment agreement. - Their relationship is therefore mainly governed by the stipulations of this agreement. - The central element common to all assignments is, of course, the transfer of the receivable of the

assignor to the assignee who determines the extent of the transfer, that is to say if it concerns the entire claim (total assignment) or part of it (partial assignment).

- Moreover, in addition to the contractual content, the law provides for certain additional effects to the assignment.

- Two points are worth noting: the legal warranty. In these cases, (paragraph 1) and, in the event of a partial assignment, the order of collocation in which the different creditors will be paid (paragraph 2).

Paragraph 1 - The legal guarantee- This is where the analogy with sales is particularly relevant. Under section 1639, the assignor for

value assures the assignee of the existence of the claim, which extends to the accessories. This guarantee - because legal - does not require any mention of the contract. It allows the assignee to take action against the assignor in the event of a default in the receivable. It protects the assignee against the nullity of the assigned receivable or the extinguishment of the receivable for any reason (prescription, compensation, etc.).

- Since the legal guarantee only covers the existence of the claim, the parties have an interest in the solvency guarantee clause the assignor guarantees the solvency of the assigned debtor at the time of the contractual stipulation that the guarantee will extend to the solvency of the debtor has ceded to extend this guarantee further to include the debtor's future creditworthiness

Paragraph 2 - Collocation order in case of partial assignment- An assignee who acquires only a part of the receivable is to be co-creator with other partial

assignees or with the assignor who has retained a part of his claim.- As this rule is not mandatory, it can be overridden in order to give priority to one or the other of

the assignees, or to the assignor. Subsection 4 - Effects on third parties other than the debtor

- If the effects of the assignment of claims involve the debtor, the assignor and the assignee in particular, other third parties may be affected by the assignment-such as the surety and creditors of the debtor, the creditors of the assignor, or the trustee in the event of bankruptcy of the assignor.

- The assignment is effective against them, as soon as the formalities of service have been fulfilled with regard to the debtor, for example, if a receivable is successively assigned to two assignees, it is the first assignment, for which the formalities of service have been completed, which is opposable to the other assignee, irrespective of the dates on which these assignments were made in order to protect certain third parties who are more directly involved, the legislator has provided for specific formalities.

Macdonald and Brierley, “Quebec Civil Law”ASSIGNEMNT OF RECEIVABLES (DEBT)

- Commercial business could assign as security in a single operation a universality of its present future book debts

- Prior to default, account debtors can validly pay the assignor and receive a discharge; after newspaper notices of default have been published, however, they must pay the assignee

- Like ordinary transfer of incorporeal, assignment of the debtor’s present and future book debts are enforceable against third parties only if served upon or accepted by the accountant debtor

145Nicole Spadotto

ii. Novation and delegation Novation and delegation: important to see novation and delegation together, because in the Code they’re conceptually inseparable.

- CCQ starts with delegation, but to understand delegation we must also understand novation and its mechanisms first

- Very ancient mechanisms carried over into new CCQ

NovationCCQ 1660: Novation is effected where the debtor contracts towards his creditor a new debt which is substituted for the former debt, which is extinguished, or where a new debtor is substituted for the former debtor, who is discharged by the creditor; in such a case, novation may be effected without the consent of the former debtor. / Novation is also effected where, by the effect of a new contract, a new creditor is substituted for the former creditor, towards whom the debtor is discharged.

- Novation is to replace things in the link of obligations to modify the situation of the old creditors/debtors (the object and the cause are objective elements of the obligation, and the debtor and creditor are subjective elements of the obligation). From the Latin word for "new", signaling the replacement of an existing obligation by a new obligation. The operation is characterized in that it simultaneously consists of releasing and linking.

- Replacing the old legal link (extinction) with a new one (creation): the motion of extinction and creation are linked by a causal relationship (one extinguishes to create/replace an old obligation with a new one)

- This modifies the structure of the good of the obligation/transforms the mode of the obligation

- Novation is a renewal of the obligation, but also a mode of extinction o The extinction and creation occurs at the same time (simultaneous and

instantaneous) – this means the parties are released from the obligation (extinction), but a new legal relationship is immediately created which may bind all or some of the parties of the original relationship

o The operation character simultaneously is liberating and binding o Novation is a juridical act less than an effect of law

- Types of novation :o Changing the creditor: when there’s a new contract and the old creditor is

substituted by a new oneo Changing the debtor: when there’s a new debtor to liberate the old one (note

that the novation can happen without the consent of the old debtor, because liberation can happen when the creditor discharges the debtor)

o Changing the debt: two initial parties are still united, but contracted another debt

- Conditions of novation :o The intention of the novation must be obvious: it cannot be presumed. This

means qualifying the operation by questioning if the operation “intends” to novate

CCQ 1661: Novation is not presumed; the intention to effect it must be evident.

o Requires two juridical operations The old juridical operation (prior to the novation) and the new one

(the replacement one) – ie, transforming a lease of a car into a purchase of it

o Requires a link between the two juridical operations (almost a causal link) Without a sufficiently strong link, we wouldn’t see the reason to

novate – and we need “intent” to novate in order for it to work- Cause of novation :

146Nicole Spadotto

o The new element taking the place of the old elements, extinguishing the old one, is the cause of the creation of the new obligation and the cause of the extinction of the old one

- Effects of novation :o The former party is released/discharged, and the new party is bound o Novation is a mechanism which permits the changing of elements of the

obligations, but it’s more than this also – it leads to the extinction of the initial relationship of obligations, which brings heavy consequences. The consent of the former debtor is not necessary to modify these elements. To modify an element is to impose another prestation, and modifying the substance of the relationships. Normally, this action would require consent, but instead we change the debtor out.

o New element takes place of the old elements, and the old elements disappear

Novation and terms and conditions- Changing a term to a condition is novation

o We are modifying the substance/object of the obligationo The condition of the obligation means that the obligation does not exist/is not

exigible yet. The certainty of the event, for a term, makes it certain that the obligation will be exigible at some point. So changing from a condition to the term is a novation because the substance of the obligation (it’s exigibility) is modified

o From the point of view of the parties, the term obligation exists, but is not yet exibible/due. For condition, the obligation is suspended, and doesn’t yet exist. So if a term becomes conditional, the relationship of the obligation is quite modified. When you transfer a term to a condition, you’re transforming the certitude of the event

o The line of obligation is transformed from being a certainty: this is a substantial difference, and the choice of creating a new intention, because it changes the behaviour/relationship of the obligation. You are getting rid of the link of obligation (the transformation makes extinct the original relationship), which is significantly substantial as a transformation to make a novation

o Extinction of the obligation is the crucial fact – this is liberation - Changing a condition to a term is not as much a novation

o Does not affect as much the relationship with the obligation o Turning something that doesn’t exist (condition) into something that does

(term). You’re making the execution exigible. You’re not transforming the obligation itself – you’re just making it due.

** If the fundamental position of the parties don’t change, then it’s not novation.

Presumption of the Code – not novationCCQ 1661: Novation is not presumed; the intention to effect it must be evident.

- Presumption of the code is that it’s not novation, but it’s possible to rebut this presumption

- Must be intentional to novate; we look to the intention of the parties, whether they had an intention to shut down the original obligation and/or create a new obligation

- The power of voluntariness is that novation is not presumed

Delegation (can be perfect or imperfect)CCQ 1667: Designation by a debtor of a person who is to pay in his place constitutes a delegation of payment only when the delegate obligates himself personally to the delegatee to make the payment; otherwise, it merely constitutes an indication of payment.


Difference between novation and delegation Novation creates an extinction and replacement of the link when a new debtor (for example) is replaced by another debtor. The new debtor substitutes the former debtor. The first debtor’s obligations are extinguished. Delegation: the debtor tells a third party to pay in his place (this creates a new link in the chain of obligations). The delegation payment is only valid when the new debtor obligates himself personally to make the payment. Everyone gets to keep their rights (first debtor gets to keep their rights against the new debtor) Perfect delegation is novation.


Double check this and the one above. Not sure if I have it flipped.Alexandre, Yasmine, and Jenna also don’t know, so doesn’t feel important.


If the creditor wants to change the debtor, you don’t need the consent of the debtor (this is the only case in which you need this). Otherwise, you’d need the consent of the debtor (ie, to change the creditor).

147Nicole Spadotto

- There’s a creditor who has a debtor. This debtor also has a debtor who engages in the payment of the debt (taking the place of another). Involves letting the creditor know that another debtor is committed to paying the debt

- Delegation is like an order given by one person to another for the second to pay their debt

- Delegation revolves around the fact that third parties can pay a debt, so long as the creditor is actually satisfied by that payment, because from point of view of the creditor, the debtor is only liberated when the payment is made – but this does not mean forcing the creditor to accept a different debtor

- The “delegate obligates himself personally” – this is the second debtor who is obligated to the creditor to personally make the payment (integral link between the second debtor and the creditor)

- If you’re not obliged personally, it’s not a delegation - The credit is the cause of this obligation

Parties to delegation - Debtor who designates- Solvens (the delegate) who will pay in the place of the debtor the debt that is due to

the creditor- Creditor

o Delegation thus often involves three separate legal relations – the one between the original debtor and the creditor, the one between the original debtor and the delegate, and that between the delegate and the creditor. These happen at the same time

Conditions to delegation - Delegate is personally obliged (CCQ 1667): delegate must undertake to make the

payment. Without this, delegation is invalid - Delegation can resemble subrogation because a solvens is paying another’s debt,

and in so doing subrogates the debtor’s position vis-à-vis the creditor

Second debtor’s right of defenseCCQ 1668: Where the delegatee accepts the delegation, he retains his rights against the delegator, unless it is evident that the delegatee intends to discharge him.

- Even if the second debtor has accepted the delegation, he maintains his right of defense against the first debtor

- If you owe me $100, but I owe X $100, then pay X in my place for all of us to be happy

148Nicole Spadotto

- If the creditor exiges the payment of the second debtor (delegatee), but the delegatee cannot pay, is there solidarity between the original debtor and the second debtor? Does not presume this. Joint and several guarantee? Forray thinks yes.

Relationship between novation and delegation- Novation is the purest form of delegation – delegation engulfs novation, they’re

pretty much the same thing

NOVATIONCCQ 1660: Novation is effected where the debtor contracts towards his creditor a new debt which is substituted for the former debt, which is extinguished, or where a new debtor is substituted for the former debtor, who is discharged by the creditor; in such a case, novation may be effected without the consent of the former debtor.Novation is also effected where, by the effect of a new contract, a new creditor is substituted for the former creditor, towards whom the debtor is discharged.

CCQ 1661: Novation is not presumed; the intention to effect it must be evident.

CCQ 1662: Hypothecs attached to the former claim are not transferred to the claim substituted for it, unless they are expressly reserved by the creditor.

CCQ 1663: Where novation is effected by substitution of a new debtor, the new debtor may not set up against the creditor the defenses which he could have raised against the former debtor, nor the defenses which the former debtor had against the creditor, unless, in the latter case, he may invoke the nullity of the act that bound them.Furthermore, hypothecs attached to the former claim may not be transferred to the property of the new debtor; nor may they be reserved upon the property of the former debtor without his consent. However, they may be transferred to property acquired from the former debtor by the new debtor, if the new debtor consents thereto.

CCQ 1664: Where novation is effected between the creditor and one of the solidary debtors, hypothecs attached to the former claim may only be reserved upon the property of the co-debtor who contracts the new debt.

CCQ 1665: Novation effected between the creditor and one of the solidary debtors releases the other co-debtors with respect to the creditor; novation effected with respect to the principal debtor releases the sureties.However, where the creditor has required the accession of the co-debtors, in the first case, or of the sureties, in the second case, the creditor’s former claim subsists if the co-debtors or the sureties refuse to accede to the new contract.

CCQ 1666: Novation which has been agreed to by one of the solidary creditors may not be set up against the other co-creditors, except for his share in the solidary claim.

CCQ 1667: Designation by a debtor of a person who is to pay in his place constitutes a delegation of payment only when the delegate obligates himself personally to the delegatee to make the payment; otherwise, it merely constitutes an indication of payment.

CCQ 1668: Where the delegatee accepts the delegation, he retains his rights against the delegator, unless it is evident that the delegatee intends to discharge him.

CCQ 1669: The delegate may not set up against the delegatee the defenses he could have raised against the delegator, even though he did not know of their existence at the time of the delegation.This rule does not apply if, at the time of the delegation, nothing is due to the delegatee, nor does it prejudice the remedy of the delegate against the delegator.

149Nicole Spadotto

CCQ 1670: The delegate may set up against the delegatee all such defenses as the delegator could have set up against the delegatee.The delegate may not set up compensation, however, for what the delegator owes to the delegatee or for what the delegatee owes to the delegator.

DELEGATIONCCQ 1667: Designation by a debtor of a person who is to pay in his place constitutes a delegation of payment only when the delegate obligates himself personally to the delegatee to make the payment; otherwise, it merely constitutes an indication of payment.

CCQ 1668: Where the delegatee accepts the delegation, he retains his rights against the delegator, unless it is evident that the delegatee intends to discharge him.

CCQ 1669: The delegate may not set up against the delegatee the defenses he could have raised against the delegator, even though he did not know of their existence at the time of the delegation.This rule does not apply if, at the time of the delegation, nothing is due to the delegatee, nor does it prejudice the remedy of the delegate against the delegator.

CCQ 1670: The delegate may set up against the delegatee all such defenses as the delegator could have set up against the delegatee.The delegate may not set up compensation, however, for what the delegator owes to the delegatee or for what the delegatee owes to the delegator.

Macdonald and Brierley, “Quebec Civil Law”NOVATIONExtinction of obligations by transfer: novation

- The claim that the obligation represents can be transferred, as can any other type of property - Novation is a “perfect delegation,” but also extends to many situations not involving delegation - Novation is a vestige of Roman law that originally was developed as a technique for overcoming

the prohibition on the transfer of claims and contracts- Novation has two interconnected effects: it serves to extinguish an existing obligation and at the

same time it serves to create a new one- Novation may arise either where a new obligation is substituted for an existing obligation which is

then cancelled (may involve the change of an object of the obligation or a change of its cause), or when the parties to an obligation (either the creditor or the debtor) are substituted for existing parties (not as common today)

- Novation is contractual in origin, and though it may be tacit, it is never presumed - Given the extinctive effect of novation, courts have shown reluctance to find tacit novation (also

codal article that mere indication of payment doesn’t operate novation) - Most common instances of novation involve the substitution of one debt owing by another, through

given standard contractual practices to the contrary, the most important secondary effects of novation (the release of sureties and the extinction of solidarity between co-debtors) are usually overridden

- Because today when a debtor and creditor agree to change the object, cause, or modality of an obligation, the debtor expressly declares that the operation does not effect a novation, the primary effect of a novation is not to serve as a conscious mechanism facilitating arrangements between creditors and debtors through the extinction and replacement of obligations

- Novation today is mostly a defense to an action for payment by a creditor who may have inadvertently permitted a prior obligation to be extinguished.

Lesveque, “La delegation et la novation”- Delegation and novation is a distinct object of study in Quebec law - CCQ 1866 regroups two notions in the same section - The ancient delegation, imparfaite, returns in delegation in articles CCQ 1667-1670

150Nicole Spadotto

- The ancient delegation parfaite is novation by burdening the debtor in articles CCQ 1660-1666o These are two different concepts in Quebec civil law – in the methodological plan, we treat

them together to promote each’s autonomy - Delegation is the operation by which a person, the delegator, invites another person, the delegate,

to pay on his behalf a third party, the delegated- The delegate must personally oblige the payment, otherwise the operation constitutes a simple

indication of payment (CCQ 1667). Delegation is a promise to others – one person promises to pay another’s debt. The delegate is the first debtor, and the delegated is the second debtor

- Delegation of payment is another time frequent in the matter of selling a property, to avoid paying a penalty and to take advantage of a favourable interest rate.

o Ie, Jacob is the owner of a house and title of a hypothecary still valid for many years at a preferential rate. Stella wants to buy the house at a value of $200,000. Jacob still owes $150,000 to his financial institution. Stella will pay Jacob $50,000 and she will agree to pay her mortgage on his behalf. Jacob avoids the penalties associated with early payment and Stella benefits from a favourable interest rate. This situation is commonly referred to as "the assumption of a loan with a mortgage". The SCC recognizes the presence of a delegation of payment in this hypothesis – this illustration is rare in practice though

o Delegation of payment is frequent in the commercial domain. Enterprise demands to a regular client to pay directly to their creditors

- The conditions of delegation do not require any particular comment: a commitment by the delegate is required, which is not subject to any specific formal conditions and may even be tacit.

- Of course, the creditor delegatee must also accept the agreement. The case law is very flexible on the mode of acceptance and, in practice, the answer will always be positive (art. 1667-1668 C.C.Q.). The main effect of delegation is to create a new obligation between the delegate and the creditor, while leaving the obligation between the first debtor and the creditor to remain.

151Nicole SpadottoDelegation is interesting for the delegatee, who cannot lose at the exchange rate. He retains at all times his recourse against the first debtor in the event of non-payment by the second (art. 1668 C.C.Q.). The first debtor is then similar to a guarantor. It will be up to him, if he pays, to turn against his own debtor (the delegate). If the delegatee decides to return to its original debtor, this is probably a clear indication of the insolvency of the delegated debtor.

- Relations between the delegating creditor and the delegated debtor: rules by the articles CCQ 1669 and 1670

o CCQ 1670: the first line provides that the new debtor may raise against the creditor all the grounds that the first debtor could have asserted. He may invoke the nullity of the act, a total or partial payment, the prescription... The rule in article 1670, para. 1 C.C.Q. is logical and does not cause any prejudice to the creditor. The original debtor could have raised these grounds for defense. The second paragraph of article 1670 C.C.Q. provides an exception to the rule that the new debtor may raise against the creditor the same defences as the first debtor. The new debtor may not set off against each other what the first debtor owes to the creditor or what the creditor owes to the first debtor. The reciprocity requirement for compensation has disappeared

o CCQ 1669(1) provides that the new debtor cannot raise against the creditor the pleas that he could have asserted against the former debtor, even if he was unaware of their existence at the time of the delegation.

o CCQ 1669(2) is a limit to the protection of the delegating creditor. The delegated debtor may raise against the creditor the exceptions it has against the delegating debtor if, and only if, the delegating debtor originally owed nothing to the creditor. This rule applies to situations where there was no obligation, and not, for example, that of a null obligation.

Example: the delegating debtor mistakenly believed that he owed a sum of money to the delegated creditor or wanted to make a donation to him. Let us take the latter example. Jacob owes money to a father of a family. The latter offered to pay the sum directly to his son as a gift. Jacob accepts. If the son sues Jacob, the latter may raise against the sons the remedies he has against the father (for example, that he has been the victim of fraud or that the interest rate is abusive). In this situation, it is more normal to protect the delegated debtor.

- The liberation of the first debtor (the delegate): the problems in the matter of delegation carry on the possible liberation of the first debtor. CCQ 1668 is clear in this regard: Where the delegatee accepts the delegation, he retains his rights against the delegator, unless it is evident that the delegatee intends to discharge him.

- In the case of liberation of the delegate, the rules of delegation of payment are erased to give way to those of novation by change of debtor. If the first debtor is discharged, this is a novation assumption. In case of doubt, the delegation is favoured. In addition to CCQ 1668, which makes it difficult for the first debtor to “exit” from the rules of delegation, CCQ 1661 is equally restrictive with respect to “the entry” in the rules of novation. It states: “Novation is not presumed; the intention to effect it must be evident.”

- Definition of novation: it’s a juridical operation which consists of creating a new obligation which replaces another, which is thus extinguished. It’s a fossil from ancient times, and a radical technique. It’s the creation of a new obligation for extinction (without execution) of an existing obligation. The technique is to invent a time where a personal character of a link of obligation prevented transactions such as assignment of receivables and assignment of contracts. Novation has become a defence for the debtor sued for the performance of a valid obligation.

- Condition of validity: novation supposes an ancient, viable obligation. It’s not the principle that having novation is a null debt, because a new obligation cannot rely on such a debt. A new obligation must be created and the two obligations are different. The primitive obligation doesn’t substitute the obligation in the new obligation. With the formation of the new obligation, the parties have the capacity to contract – novation supposes the intention to “nover” (overhaul?)

- CCQ 1660 evokes three hypothesis of novation (written in order of importance) o Novation by burdening the debtor: CCQ 1660 enounces that novation is when the “debtor

contracts towards his creditor a new debt which is substituted for the former debt.” Novation can present two ways:

152Nicole Spadotto

1) new debtor spontaneously proposes replacing the former and disinterests the creditor (this supposed the agreement of the creditor, but operates without the consent of the first debtor). In this hypothesis, the original debtor will be liberated without problem and will be in the presence of a novation. Question is more complex if the new debtor is invited by the first to pay in their place. Novation is rarely used voluntarily, because there’s little interest for the creditor and for the new debtor. The parties favour the delegation of the payment. In the case of novation, the first debtor is liberated (CCQ 1660). In this delegation, the creditor conserves their recourse against the second debtor (CCQ 1668). The delegation permits also that the new debtor can profit from a means of defense possessed by the delegator against the delegate (CCQ 1670). Novation is expressly used as a means of defense (CCQ 1663). The nullity of the original obligation is conserved in accord with the validity conditions of the novation. Hypothecs fall in principle in the presence of novation. Hypothecs, however, “However, they may be transferred to property acquired from the former debtor by the new debtor, if the new debtor consents thereto.” (CCQ 1663(2))

- The means of “dilatoire” (delaying): only the first debtor possesses an interest to qualify the operation of novation, because he is liberated. These debtors use frequently the institution of novation by changing the debtor in title as a means of defense to counter an action the creditor has taken against them. The liberty of the delegate must be expressed, and is not presumed (CCQ 1668 to exit the delegation and CCQ 1661 to enter in novation).

- Mackay: Baudouin presided over this fundamental judgment

- Facts: M took a hypothec from the Laurentienne bank. L bought this immovable and engaged to pay the bank in M’s place. The original K between the bank and M contained an express clause which meant to protect against novation. L ceased to reimburse the hypothec. The bank exercised their hypothecary recourse on the immovable. A real action (against the good) didn’t suffice, so they went to M as stipulated per CCQ 1668 (where the delegatee accepts the delegation, he retains his rights against the delegator). The judge at first instance recognized a tacit novation and rejected the creditor’s recourse. Baudouin countered that decision

o Delegation is presumed in this hypothesis. Novation is possible; it’s maybe tacit, but this is exceptional. Baudouin’s judgement restrained tacit novation

- In modern law, novation by changing the debtor is in the interest to replace the payment by delegation

- Novation by changing the obligation: there’s a novation by changing the obligation when the debtor contracts towards their creditor a new debt. They can also change the cause (rests on a different juridical foundation, even though it’s the same prestation). Jurisprudence limits novation in cases where changing an essential element of the obligation; but a secondary change consists a simple modification

o Novation is used as a delay. See Rossi c. Ciale – there was a guaranty by a caution. To aid the debtor, the creditor prolonged the deadline, and but augmented the interest tax. This was a simple modification to the operation, and not novation. The debtor finally stopped paying, and as a means of defense of novation as a delay was rejected. The CCQ says that a mere extension of the term does not release the surety (CCQ 1961)

- In modern law, instead of making a novation by a change in the obligation, the parties will simply amend the contract, as permitted by CCQ 1439

153Nicole Spadotto

- Novation by changing the creditor: this form of novation is very archaic. This is when by effect of a new contract, a new creditor is substituted for the old one (CCQ 1660(2)). The debtor participates in the operation, and so the new credit is distinct from the old one. CCQ 1638 in matters of cession of the credit, provides for the transmission of accessories, such as mortgages. CCQ 1662 provides in principle for the disappearance of mortgages, unless the creditor reserves them

- In modern law, the parties operate by assignment of the debt

Macdonald and Brierley, “Quebec Civil Law”DELEGATIONExtinction of obligations by transfer: delegation

- Delegation is a technique by which the creditor acquires a new debtor to an obligation already in existence

- Resembles both the stipulation for a third party, except that the beneficiaries rights under a stipulation arise at the moment the other two parties contract and not when the delegation is made, and also the indication of payment, except that the person who is told to pay in the latter case doesn’t personally assume any obligation towards the initial creditor

- Where, in accepting the third party as a new debtor, the creditor releases the initial debtor, the delegation is said to be perfect, and the obligation is novated

- In all other cases, the obligation is said to be imperfect, and does not operate novation - Imperfect delegation is frequent in cases where either the debtor or creditor indicates to the other

that a third party is to make or receive payment, as the case may be- The original debtor as well as the new debtor remain bound to perform the obligation, and the

creditor assumes the same position as if the obligation were one involving imperfect solidarity- Nevertheless, the new debtor may take advantage of any defences open to the first debtor in

addition to those that are inherent in the obligation he or she personally contracted

d. Extinction of an obligation i. Payment and subrogation

Payment- The liberation of the debtor and the satisfaction of the creditor - The payment creating liberation is profound, but only because it satisfies the

creditor - Payment is the natural mode of liberation for the debtor (CCQ 1553, 1562, 1564) –

obligation is the partial alienation of liberty (conception of modern liberality of the obligation expressed by F. Von Savigny), because the creditor, in the case of inexecution, is paid from the debtor’s property and not his person

o Coercion by body, prison for civil debts, or slavery and selfdom are at the heart of this reticence

- The patrimony is the basis for the “gage général” (general right of pledge) which forms the basis of law of inexecution as well as the causes of preference

o CCQ 2644-2649

What does payment mean?CCQ 1553: Payment means not only the turning over of a sum of money in satisfaction of an obligation, but also the actual performance of whatever forms the object of the obligation.

- The execution of that which is the object of the obligation – precisely, execution of the object of the obligation, because this is the prestation (to pay or to do a thing)

- A juridical act (a legal fact for third parties)- It’s for this reason that the CCQ says a formal act constitutes an execution

The conditions of validity of a payment- The cause :

154Nicole Spadotto

o The cause of the payment is the debt – a payment without a cause is “undue,” which you then have to return. Payment made without a cause/debt is undue, and there’s restitution needed for undue reception

See CCQ 1554: Every payment presupposes an obligation; what has been paid where there is no obligation may be recovered. / Recovery is not admitted, however, in the case of natural obligations that have been voluntarily paid.

The double sense of CCQ 1554? All payments suppose an obligation: this means all payments

pre-suppose the existence of the debt (this is a presumption) “Recovery is not admitted, however, in the case of natural

obligations that have been voluntarily paid” Does this text have a relationship with CCQ 1410? CCQ 1410: The

cause of a contract is the reason that determines each of the parties to enter into the contract. / The cause need not be expressed.

- The object : CCQ 1373: The object of an obligation is the prestation that the debtor is bound to render to the creditor and which consists in doing or not doing something. / The debtor is bound to render a prestation that is possible and determinate or determinable and that is neither forbidden by law nor contrary to public order.CCQ 1374: The prestation may relate to any property, even future property, provided that the property is determinate as to kind and determinable as to quantity.

o The payment of a sum of money to discharge an obligation, but also the actual performance of what is the subject of the obligation

o The object is the prestation – not the object itself (the payment is also an execution of the object/prestation)

o Think of CCQ 1373: The object of an obligation is the prestation that the debtor is bound to render to the creditor and which consists in doing or not doing something.

o If the payment satisfies the creditor – it’s valid and creates the liberation (the principle which commands the whole regime of the payment is the satisfaction of the creditor)

If you pay for another, you’re by definition not the debtor (because you don’t have a debt to the creditor)

- The parties : the solvens CCQ 1555: Payment may be made by any person, even if he is a third person with respect to the obligation; the creditor may be put in default by the offer of a third person to perform the obligation in the name of the debtor, provided the offer is made for the benefit of the debtor and not merely to change creditors. / A creditor may not be compelled to take payment from a third person, however, if he has an interest in the payment being made by the debtor personally.

o The solvens: the one who payso Attention: the solvens is not necessarily the debtor: see CCQ 1555 which

states that payment made by third parties is valid if it’s satisfactory to the creditor (a payment that does not satisfy the creditor is not a real payment (ex. Intuitu personae)

o Keep in mind the liberal aspect of civil obligations: the balance between the freedom of the debtor and the satisfaction of the creditor

o Under CCQ 1555: The principle is that the payment made by the third party is valid

(because it’s to the satisfaction of the creditor: same economy) – if the payment doesn’t satisfy the creditor, then it’s not a real payment and therefore not valid

155Nicole Spadotto

The exception is the creditor’s interest in obtaining the payment from the debtor personally (a creditor may not be compelled to take a payment from a third person if he has an interest in the payment being made personally by the debtor)

There needs to be a formal notice by the offer of a third party (mise-en-demeure) – remember the creditor can also be late

- Payment is equilibrium between two big ideas :o The satisfaction of the creditor, and the return of liberty which is conditioned

on the satisfaction of the creditor o This conception of liberal rights ties into the big structure of liberal moral

politicso CCQ 1556: A valid payment may only be made by a person having a right in

the thing due which entitles him to give it in payment. / However, payment of a sum of money or of any other thing due that is consumed by use may not be recovered against a creditor who has used it in good faith, even though it was made by a person who was not authorized to make it.

The conditions of validity: the parties (l’accipiens): those who receive the paymentCCQ 1557: Payment shall be made to the creditor or to a person authorized to receive it for him.Payment made to a third person is valid if the creditor ratifies it; if it is not ratified, the payment is valid only to the extent of the benefit that the creditor derives from it.

- The person who receives the payment (l’accipiens) is not forced on the creditor: it’s not necessarily the creditor who receives the payment

- The payment made to a third party is valid if the creditor ratifies it – must be a voluntary act of the creditor to recognize the payment (ties to validity, a juridical act between the parties)

o Ratification: juridical act by which the creditor recognizes the payment (this can even be done without the creditor’s knowledge)

- If the payment benefits the creditor, then it’s valid – this goes back to the same principle that the payment is to be made to the satisfaction of the creditor

CCQ 1558: Payment made to a creditor without capacity to receive it is valid only to the extent of the benefit he derives from it.CCQ 1559: Payment made in good faith to the apparent creditor is valid, even though it is subsequently established that he is not the rightful creditor.

- This isn’t good faith in the sense of CCQ 1375- If the payment is made in good faith to the apparent creditor, then the payment is

valid – the condition is good faith, as the payer who does not know that the recipient is not he creditor but believes in good faith that this is the creditor

- This provision benefits the debtor CCQ 1560: Payment made by a debtor to his creditor to the detriment of a seizing creditor is not valid against the seizing creditor who, according to his rights, may compel the debtor to pay again; in that case, the debtor has a remedy against the creditor so paid.

Object of the payment = object of the obligation (CCQ 1561-1565)CCQ 1561: A creditor may not be compelled to accept anything other than what is due to him, even though what is offered is of greater value. / Nor may he be compelled to accept partial payment of an obligation unless the obligation is disputed in part. In that case, if the debtor offers to pay the undisputed part, the creditor may not refuse to accept payment of it, but he retains his right to claim the other part of the obligation.

- Discharge of the debtor depends on the creditor’s satisfaction, which explains CCQ 1561

- Line one: get all of the obligations or get none. This is the right of the creditor. Cannot force a creditor to accept another thing.

- Line two: creditor doesn’t need to accept a partial payment (supplement)

156Nicole Spadotto

o This is the rule of indivisibility of a payment o Do not confuse the indivisibility of the payment with the indivisibility of the

object of the obligation: Indivisibility of the payment is based on the idea that the payment

must be satisfactory Indivisibility of the object results from the possibility of opposing the

benefit of the divisibility. Parties say the object is indivisible by a stipulation of indivisibility

- Where it is clear, in contractual matters, that performance by equivalent is not really a payment but a remedy for non-performance

o Like novation, as it transforms the object of the obligation (if not executed, obtain interest damages – interest damages for reason of inexecution isn’t execution, so it’s transformed)

CCQ 1562: A debtor of certain and determinate property is released by the handing over of the property in its actual condition at the time of payment, provided that the deterioration it has suffered is not due to his act, omission or fault and did not occur after he was in default for the payment.

CCQ 1563: Where the property is determinate as to its kind only, the debtor need not give the best quality, but he may not offer the worst quality.

CCQ 1564: Where the debt consists of a sum of money, the debtor is released by paying the nominal amount due in money which is legal tender at the time of payment.He is also released by remitting the amount due by money order, by cheque made to the order of the creditor and certified by a financial institution carrying on business in Québec, or by any other instrument of payment offering the same guarantees to the creditor, or, if the creditor is in a position to accept it, by means of a credit card or a transfer of funds to an account of the creditor in a financial institution.

CCQ 1565: Interest is paid at the agreed rate or, if none, at the legal rate.

The place of payment CCQ 1566: Payment is made at the place expressly or impliedly indicated by the parties.If no place is indicated by the parties, payment is made at the domicile of the debtor, unless what is due is certain and determinate property, in which case payment is made at the place where the property was when the obligation arose.

- In short, if the place isn’t determined by convention, the creditor must go to the home of the debtor to collect it

The place of payment CCQ 1568: A debtor who pays his debt is entitled to an acquittance and to the turning over of the original title of the obligation.

- The right to release and remit the original title of the obligation o Receipt = document indicating proof of payment (like a receipt) o Right to the benefit of the solvens

- Two principle consequences: o The extinction of the debt: the payment is the natural cause of the extinction o The extinction of its accessories (accessoires) also – in general, this is

securities (contracts or real rights granted to guarantee the payment) - The regime of solidarity: this explains explicitly that if the co-debtor in solidarity

pays the debt, he’s freeo This is a caution: if you have a co-debtor in solidarity, can look to either to

pay (another patrimony from which to look for the payment)

157Nicole SpadottoIn the case of invalidity of the payment

- The debtor remains liable to the creditor - Whoever pays wrongly pays twice, unless the first payment has benefitted the

creditor (CCQ 1557) o CCQ 1557: Payment made to a third person is valid if the creditor ratifies it;

if it is not ratified, the payment is valid only to the extent of the benefit that the creditor derives from it.

o Ie, the assigned debtor pays the original debtor and not the original creditor. The assigned debtor has an action against the original debtor, but at the same time, the fact the action exists means he still has to pay the original creditor. The payer has an action against the debtor for undue reception, but the other creditor can still pursue the debtor for the action. The fact he paid the wrong person isn’t defense for not paying

o Keep in mind partial payment is also an inexecution - If the debtor is late: he owes default damages per CCQ 1617

o CCQ 1617: Damages which result from delay in the performance of an obligation to pay a sum of money consist of interest at the agreed rate or, in the absence of any agreement, at the legal rate

The creditor is entitled to damages from the datea of the demeure without having to prove that he has suffered any injury

The creditor may stipulate, however, that he will be entitled to additional damages, provided that he justifies them

- He must be in demeure (CCQ 1594 and onwards) – ie, legally late

Subrogation - An operation that’s accessory to payment which is for the effect of transferring the

paid claim to the solvens (the one who pays)o Also understood as the substitution of creditors: the effect to transmit the

obligation (the paid amount) to the person who paid o Ie, insurance in case of theft. The insurance pays you, but subrogates you in

your rights against the thief. So if the thief is caught, you can't demand that he reimburse you, the insurer can

o Ie, Your friend owes $100 and has to pay today. He doesn't have the money to pay. You pay in his place. You subrogated his creditor.

o See CCQ 1656 for examples of when this occurs- Essential condition of subrogation :

o CCQ 1651: A person who pays in the place of a debtor may be subrogated to the rights of the creditor. / He does not have more rights than the subrogating creditor.

o Payment that gives the measure of the subrogation; it is by effect of the payment that a person takes the place of the creditor

- Why take the place of the creditor ? o To benefit from the rights of the creditor – it’s a mode of transmitting the

obligation o To satisfy the creditor of another, you take that person’s place

CCQ 1651: A person who pays in the place of a debtor may be subrogated to the rights of the creditor.He does not have more rights than the subrogating creditor.

- First condition: validity of the payment - Subrogation also may happen: it’s not a given

Source of the subrogation CCQ 1652: Subrogation may be conventional or legal.

158Nicole Spadotto

- CCQ 1652 distinguishes the sources of subrogation o Contract: conventional subrogation o The law

- CCQ 1654: Subrogation may be made by the creditor only at the same time as he receives payment. It takes effect without the consent of the debtor, notwithstanding any stipulation to the contrary.

o Can be done without consent: because the fundamental element is the payment for another. Because if it’s valid, it’s because its satisfied the creditor

o The debtor cannot interfere with the benefit of the subrogation o No means of defense: only means of defense is fraud

- Conventional subrogation : o CCQ 1653: Conventional subrogation may be made by the creditor or the

debtor, but it must be made expressly and in writing. Must be made expressly – this means explicitly; a written act

establishes expressly the subrogation The payment by the solvens triggers the possibility of subrogation. No

payment means no subrogation Person subrogating has all the rights, but not more, than the original

person/creditor; he does not “act in the name of” that person, but rather subrogates his rights

The parties: the solvens and the creditor (CCQ 1654: Subrogation may be made by the creditor only at the same time as he receives payment. It takes effect without the consent of the debtor, notwithstanding any stipulation to the contrary.)

Consent of the debtor is not necessary Parties can also exceptionally be the solvens and the debtor, or even

in favour of a lender who advances to him the money necessary to pay his creditor (CCQ 1655(1): Subrogation may not be made by a debtor in favour of anyone except his lender and it takes effect without the consent of the creditor.)

- Legal subrogation : the subrogation is an effect of law/voluntariness attributed to a payment

o These are the cases referred to in CCQ 1656o CCQ 1656: Subrogation takes place by the sole operation of law. (1) in

favour of a creditor who pays another creditor whose claim is preferred to his because of a prior claim or a hypothec; (2) in favour of the acquirer of property who pays a creditor whose claim is secured by a hypothec on the property; (3) in favour of a person who pays a debt to which he is bound with others or for others and which he has an interest in paying; (4) in favour of an heir who pays with his own funds a debt of the succession for which he was not bound; (5) in any other case provided by law.

Allows us to dispense of the validity conditions associated with conventional subrogation

However, may be derogated from by agreement This is the effect that the law attributes to the payment (so that which

is voluntary, when the subrogation is conventional)o Effects :

The extinction and transfer of the claim to the extent of the payment The case of partial payment – CCQ 1658: A creditor who has

been only partly paid may exercise his rights with respect to the balance of his claim in preference to the person subrogated from whom he has received only part of his claim. /However, if the creditor has obligated himself to the person subrogated to

159Nicole Spadotto

guarantee payment of the amount for which the subrogation is acquired, the person subrogated has preference.

Opposability of the exceptions: the debtor may raise against the subrogee all the exceptions he could raise against the original creditor

Difference with the cession de créances (assignment of credit)

Compensation- Very elementary mechanism in civil law - When I owe you $50, but you also owe me $50 – the relationship is done- This is when two people are simultaneously debtor and creditor for the same

obligation - If I owe you X and you owe me X = compensation - Compensation is automatic- Problem: as it is automatic, the parties are not always informed (not always done

consciously)

PAYMENT IN GENERALCCQ 1553: Payment means not only the turning over of a sum of money in satisfaction of an obligation, but also the actual performance of whatever forms the object of the obligation.

CCQ 1554: Every payment presupposes an obligation; what has been paid where there is no obligation may be recovered.Recovery is not admitted, however, in the case of natural obligations that have been voluntarily paid.

CCQ 1555: Payment may be made by any person, even if he is a third person with respect to the obligation; the creditor may be put in default by the offer of a third person to perform the obligation in the name of the debtor, provided the offer is made for the benefit of the debtor and not merely to change creditors.A creditor may not be compelled to take payment from a third person, however, if he has an interest in the payment being made by the debtor personally.

CCQ 1556: A valid payment may only be made by a person having a right in the thing due which entitles him to give it in payment.However, payment of a sum of money or of any other thing due that is consumed by use may not be recovered against a creditor who has used it in good faith, even though it was made by a person who was not authorized to make it.

CCQ 1557: Payment shall be made to the creditor or to a person authorized to receive it for him.Payment made to a third person is valid if the creditor ratifies it; if it is not ratified, the payment is valid only to the extent of the benefit that the creditor derives from it.

CCQ 1558: Payment made to a creditor without capacity to receive it is valid only to the extent of the benefit he derives from it.

CCQ 1559: Payment made in good faith to the apparent creditor is valid, even though it is subsequently established that he is not the rightful creditor.

CCQ 1560: Payment made by a debtor to his creditor to the detriment of a seizing creditor is not valid against the seizing creditor who, according to his rights, may compel the debtor to pay again; in that case, the debtor has a remedy against the creditor so paid.

CCQ 1561: A creditor may not be compelled to accept anything other than what is due to him, even though what is offered is of greater value.Nor may he be compelled to accept partial payment of an obligation unless the obligation is disputed in

160Nicole Spadotto

part. In that case, if the debtor offers to pay the undisputed part, the creditor may not refuse to accept payment of it, but he retains his right to claim the other part of the obligation.

CCQ 1562: A debtor of certain and determinate property is released by the handing over of the property in its actual condition at the time of payment, provided that the deterioration it has suffered is not due to his act, omission or fault and did not occur after he was in default for the payment.

CCQ 1563: Where the property is determinate as to its kind only, the debtor need not give the best quality, but he may not offer the worst quality.

CCQ 1564: Where the debt consists of a sum of money, the debtor is released by paying the nominal amount due in money which is legal tender at the time of payment.He is also released by remitting the amount due by money order, by cheque made to the order of the creditor and certified by a financial institution carrying on business in Québec, or by any other instrument of payment offering the same guarantees to the creditor, or, if the creditor is in a position to accept it, by means of a credit card or a transfer of funds to an account of the creditor in a financial institution.

CCQ 1565: Interest is paid at the agreed rate or, if none, at the legal rate.

CCQ 1566: Payment is made at the place expressly or impliedly indicated by the parties.If no place is indicated by the parties, payment is made at the domicile of the debtor, unless what is due is certain and determinate property, in which case payment is made at the place where the property was when the obligation arose.

CCQ 1567: The expenses attending payment are borne by the debtor.

CCQ 1568: A debtor who pays his debt is entitled to an acquittance and to the turning over of the original title of the obligation.

THE ALLOCATION OF PAYMENTS CCQ 1569: When making payment, a debtor who owes several debts has the right to impute payment to the debt he intends to pay.He may not, however, without the consent of the creditor, impute payment to a debt not yet due in preference to a debt which has become due, unless it was agreed that payment may be made by anticipation.

CCQ 1570: A debtor who owes a debt that bears interest or yields periodic payments may not, without the consent of the creditor, impute a payment to the capital in preference to the interest or periodic payments.Any partial payment made on the principal and interest is imputed first to the interest.

CCQ 1571: Where a debtor who owes several debts has accepted an acquittance by which the creditor, at the time of payment, imputed payment to one specific debt, he may not subsequently require that it be imputed to a different debt, except upon grounds for which contracts may be annulled.

CCQ 1572: In the absence of imputation by the parties, payment is imputed first to the debt that is due.Where several debts are due, payment is imputed to the debt which the debtor has the greatest interest in paying.Where the debtor has the same interest in paying several debts, payment is imputed to the debt that became due first; if all of the debts became due at the same time, however, payment is imputed proportionately.

Garantie des bâtiments résidentiels neufs de l’APCHQ inc. c. MYL Développement inc. Facts :

161Nicole Spadotto

- After paying the beneficiary of a new residential building guarantee plan, the appellant brought an action against the respondents to recover her disbursements.

- The appellant's action was commenced more than three years after the beneficiary of the guarantee gave notice of the defects

o Warranty plan is for the benefit of those who have entered into a contract with a contractor for the construction of a new residential building. The plan guarantees the performance of a contractor's legal and contractual obligations subject to certain conditions.

Timeline : - the beneficiary of the guarantee denounces in writing the defects.- the inspector decides on the beneficiary's claims. He orders MYL to correct five

defects. On the same day, a letter of formal notice is sent to the respondents.- the appellant added two additional corrections and notified the respondents.- the appellant assigned a contractor to proceed with the corrective work.- the appellant requested reimbursement of the amounts paid to the contractor who

performed the corrective work on the recipient's building.- the appellant commenced its action against the respondents.

History : - The trial judge dismissed the appeal. He thought he was prescribed. - Appellant appeals – Argues that the extinctive limitation period began on the date of the payment

of the compensation to the beneficiary, in which case the appeal would not be required or the expiry of the period provided for in Article 19. of Regulation respecting the guarantee plan for new residential buildings

Issues : Is the beginning of the extinctive limitation period when the payment of the compensation began? Yes

Holding : Dismiss appellant’s action on ground that action was prescribed

Reasons: - For the respondents, the appellant sued the subrogated. - As a subrogated payer, she had no more rights than the subrogant and she had to act within the

prescribed time period.- The appellant submits that this is a personal claim based on the Respondent MYL's contract of

adhesion which contains certain conditions that it must respect and that, as a result, The prescription must begin on the date on which it may demand repayment of its disbursements to the respondents.

- Court does not accept the appellant's position. It does not exercise a remedy that is personal, but rather a recourse exclusively subrogatoire. She is subrogated to the rights of the beneficiary and the regulatory procedure does not allow her to override the rule that, as a subrogated payer, she has no more rights than the subrogant.

- As subrogee, the appellant is not in a different legal position from any other subrogated creditors under CCQ 1656.

- In many cases, these creditors acquire the right to subrogation after meeting certain conditions or after certain delays. For example, the insurer is subrogated in the rights of the insured to the extent of the indemnities he has paid (CCQ 2474)

Ratio :- Subrogation cannot harm the debtor, since he has often not consented to it.

162Nicole Spadotto

- The payor-subrogated does not obtain more rights than the creditor-subrogeant (CCQ 1651). - The debtor, (and his guarantors), can oppose to the subrogee "[...] the means they had against the

original creditor" (CCQ 1657) that they are related to the validity of the contract, to his execution or for any reason relating to the subrogatory act.

MacDonald and Brierley, “Quebec Civil Law” PAYMENT Theory of payment

- Payment is the legal operation by which a debtor delivers a sum of money in satisfaction of an obligation or performs any thing to which he or she is obliged (presumes both a material and intellectual element)

- Excepting payment of a natural obligation, every payment made where there is no debt owing may be recovered

- Code distinguishes only between simple payment and payment with subrogation, but analytically the rules of compensation of debts amount also to the voluntary performance of an obligation, effected by operation of law

Simple payment- Normally, payment will be made by the debtor, though a third party can also effect payment

provided that this is done in the interest of the debtor and not merely to change the creditor - The creditor may also object to receiving payment from another where there is a special interest in

having the obligation performed personally by the debtor - Basic principle is that the payment will be made to the creditor, but the CCQ also provides for the

conditions under which payment may be made to the creditor’s mandatory, or even third party whose receipt of it is ratified by the creditor, or even to an ostensible creditor

- Two principles govern the object of payment to the creditor: - First principle: most importantly, the payment must be of the exact prestation owed by the debtor,

and the creditor cannot be compelled to receive anything else, even if it is of greater value. This means that where a sum of money is due, neither a cheque or other negotiable instrument, nor a credit or debit card need be accepted by the creditor. Payment must be, subject to express agreement, made in Canadian dollars, and for the exact nominal amount owing, regardless of the effects of inflation or deflation. Where a determinate thing is to be paid, the debtor is not responsible for deteriorations not caused by his or her fault, a simple application of the general theory of risk. If a fungible object is to be paid, however, deteriorations are at the risk of the debtor, in that the object must be of at least merchantable quality, unless the parties have otherwise provided

- Second principle governing the object of payment: payment is indivisible. The creditor cannot be constrained to accept partial payment, either by the debtor or by the court – though the court can authorize to reduce interest payments it considers usurious (charging illegal or exorbitant rates of interest for the use of money). However, parties may as an installment sale or obligation with a term derogate from the principle of indivisibility of payment. Codal rules governing divisibility of obligations among heirs and compensation also tempter the principle of indivisible payments, as do modern consumer protection provisions that permit courts to adjust the modalities, and even the amount of payment due

- Payment is due at the time and place stipulated by the parties in their contract, or by the court in the judgment that fixes its amount

- Code provides no grace period for payment - Where monetary obligation carries interest, any debt with a term cannot in principle be paid by

anticipation. In these cases, the term is presumed to have been stipulated for the benefit of the creditor as well

- Where the parties have not stipulated a place of payment for a sum of money, it must be made at the domicile of the debtor, or if payment of a thing is certain, it must be made at the place where the object was located at the time of the contract

Imputation of payments- If the debtor owes more than one claim to a creditor, it’s necessary to determine which debt the

163Nicole Spadottopayment is intended to extinguish

- Normally, the debtor will declare which debt he or she intends to pay, and subject to any prior arrangement between the parties this imputation will be binding upon the creditor

Payment with subrogation- One of the most important mechanisms of payment regulated by the Code is payment with

subrogation - Personal subrogation is the arrangement by which a person who pays the claim of another may

assume all the rights of the original creditor – including warranties, accessories, and securities – against the original debtor

- Subrogation may either be legal or contractual. Legal subrogation is regulated by the Code - Legal subrogation include the cases of a creditor who pays the claim of another creditor holding a

prior privilege or hypothec, or a purchaser of an immovable who pays a secured claim upon it, or a person such as a solidary debtor, a surety, or an insurer who pays a debt to which he or she is also held, or a heir who has accepted under benefit of inventory but who nevertheless pays a debt of the succession, or as between spouses when private debts have been paid from community property

- In addition to these special cases listed in the Code, special statutes provide for a plethora of situations where legal subrogation takes place

- Contractual subrogation is also governed by the Code: usually it will occur where a creditor, upon receiving payment from a third party, expressly subrogates the payer in his or her rights against the debtor. In such cases, the subrogation must occur at the same time as the payment, on the basis that otherwise the debt would simply be extinguished by payment. Contractual subrogation may also occur when a debtor borrows money to pay a debt, and subrogates the lender in the rights of the creditor. On this hypothesis, the subrogating deed must either be in notarial form, or signed by two witnesses, and the receipt given by the creditor must specify that the debt was paid with the borrowed money

- The main effects or subrogation are to extinguish the initial debt between debtor and creditor, and to place the party who has paid in the exact same position as the initial creditor

- As against third parties, the subrogation in principle has no effect, and to the extent that they are affected by the accessories to the debt, or are sureties of it, they remain bound following the subrogating payment. Nevertheless, the subrogated creditor can never claim a greater amount than that which has been paid, and where the subrogation has only been partial, the original creditor retains a priority for payment over the subrogated creditors as against the original debtor for any amount that remains due

Payment by compensation- Normally, payment presumes that only one party (the debtor) will be fulfilling an obligation owed

to the other. However, particularly in relationships between financial institutions, or between such institutions and their customers, it may be that two parties are at the same time debtor and creditor of each other

- In such cases, compensation of claims and debts may arise, either by operation of the law, as a result of judicial decision, or by agreement of the parties themselves

- The rules established by the Code to facilitate payment of the obligations outstanding between mutual debtors are broadly drawn and cover both monetary and non-monetary obligations

- For compensation to operate, the two debts must be between the same two persons acting in the same quality. The debts must, moreover, both be exigible/due – that is, neither may be suspended by a term or condition, although a simple grace period given by one creditor does not prevent compensation

- The requirement that both debts also be liquid means that contested contractual claims, or delictual claims prior to judgment recognizing and evaluating them, cannot be the subject of compensation

- The two debts must also be of the same kind and quality – a debt in money cannot be compensated against an obligation to deliver an object, although theoretically an obligation to deliver a determinate amount of fungible property (ie, grain or gold) could be compensated against an identical obligation owed by the other party

164Nicole Spadotto

- Several cases that prevent compensation are identified in the Code: compensation does not lie if the debtor is unjustly deprived of the thing, if the depositary refuses to disgorge, or if the debt is an alimentary obligation not liable to seizure. Compensation is also impossible once bankruptcy has occurred, unless the claim has already been assigned by the bankrupt, or once the claim is seized by garnishment. Most important, compensation may not be set up against the state or its agencies, normally in relation to income and sales tax owing

- Where the conditions for compensation are satisfied however, its legal effects are automatic. The two obligations are mutually extinguished up to the value of the lesser amount due. Though compensation thus operates as a type of forced payment, and is consequently subject to the regime of imputation of payments, by its very nature it constitutes an exception to the principle that payment is indivisible

- Despite the automatic operation of compensation, it is a suppletive regime of payment, and its effects may be renounced by the parties or extended to situations that do not meet the criteria set out in the Code, in which case the compensation agreement between the parties is typically a mixed contract involving elements of payment, release, and transaction

- As is the case with payment generally, the most important instances of compensation are those contractually arranged between major financial institutions. Here, the rules of Civil law play nearly no role whatsoever in determining the conditions of and effects of compensation

pubdocs.capubdocs.ca/.../793-forray_advancedcivillawobligations_wi… · web viewthe judge rules...

Documents