Ambiguity in Contracts - Quebec
YAN BESNER
Partner, Montréal
T +1 514 878 5824
M +1 514 758 0478
[email protected]
dentons.com
© Dentons CANADA LLP 2014
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Ambiguities in Contracts
Quebec Legal system

Quebec has a civil law legal system which governs
relations between persons.

The civil law system is primarily embodied in the
Civil Code of Québec, R.S.Q., c. C-1991 (the “Civil
Code”).

The Civil Code contains specific provisions
regarding the interpretation of contracts. These
provisions give the foremost advice to judges when
interpreting a contractual document. These
provisions are completed by the jurisprudence (case
law) and legal doctrine (authors). [Civil Code of Quebec,
articles 1425 to 1432.]
5
Quebec Legal system

In Quebec, the Civil Code constitutes the basic law,
applicable to all persons, and thus serves to
complement specific statutes relating to the various
subject matters it covers.

However the Civil Code provisions – including those
governing contracts – are generally waivable by the
parties unless such provisions are of public policy or
the waiver of same is prohibited by the terms of a
specific provision.
Article 9. In the exercise of civil rights, derogations may be made from those rules of
this Code which supplement intention, but not from those of public order.
[Civil Code of Quebec, article 9]
6
Quebec Legal system

There are important differences between the interpretation
of contracts in Quebec civil law and in Canadian common
law jurisdictions.

Common law jurisdictions insist on an objective approach
to interpretation, by which the meaning is ascertained from
the contract’s text as well as information that was available
to the parties at the time of the execution of the contract.

In civil law, the approach is, in principle, subjective: as art.
1425 C.C.Q. stipulates, the governing factor is the actual
intention of the parties, rather than the words they used.
1425. The common intention of the parties rather than adherence to the literal meaning
of the words shall be sought in interpreting a contract.
[Sébastien Grammond, Anne-Françoise Debruche and Yan Campagnolo,
Quebec Contract Law, Montreal, Wilson & Lafleur ltée, 2011, Civil Code of
Quebec, article 1425]
7
Steps to follow - Interpretation
3 steps to follow:
1) The interpreter first queries the text
It is in the letter that the interpreter must seek the spirit. If the text is clear and
does not lead to ambiguities, then stick to it.
2) The interpreter then questions the intention of the
parties
It should prefer what comes out of the reading as opposed to what is expressly
stated.
3) Finally, the interpreter questions the social
necessities
If the text of a contract does not reveal the intentions of the parties, then the
interpreter must be guided by objective factors (good faith, the nature of the
contract, usage, equity and law) in order to adapt the contract to current needs and
identify what comes out of for justice.
[François Gendron, L’interprétation des contrats, Montréal, Wilson & Lafleur, 2002]
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Guidance and interpretation techniques
• Articles 1425 to 1432 of Civil Code of Québec
under the division “Interpretation of contracts” as
well as articles 1434 to 1439 of Civil Code of
Québec under the division “Binding force and
content of contracts” provide guidance and
interpretation techniques that must be followed.
[Civil Code of Quebec, articles 1425 to 1432 and articles 1434 to 1439]
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Guidance and interpretation techniques
Important: Under Quebec law, the contract binds
the parties not only as to what they have
expressed in it but also as to what is incidental to it
according to its nature.
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.
[Civil Code of Quebec, article 1434]
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Guidance and interpretation techniques
• First rule: The intention
In case of conflicts between the intention and the
formulation it was given, it is the intention that must
prevail.
1425. The common intention of the parties rather than adherence to the literal
meaning of the words shall be sought in interpreting a contract.
[François Gendron, L’interprétation des contrats, Montréal, Wilson & Lafleur,
2002,Civil Code of Quebec, article 1425]
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Guidance and interpretation techniques
• Second rule: The circumstances of the contract.
The following must be taken into account in
interpreting a contract:
• the nature of the contract;
• the circumstances in which it was formed;
• the interpretation which has already been given to it by
the parties or which it may have received; and
• usage.
1426. In interpreting a contract, the nature of the contract, the circumstances in
which it was formed, the interpretation which has already been given to it by
the parties or which it may have received, and usage, are all taken into
account.
[Civil Code of Quebec, article 1426]
12
Guidance and interpretation techniques
• Second rule: The circumstances of the contract.
“Article 1426 C.C.Q. codifies the long-standing jurisprudential
rule to the effect that subsequent conduct is often the best
evidence of the parties’ intent.”
(Sébastien Grammond, Anne-Françoise Debruche and Yan Campagnolo, Quebec
Contract Law, Montreal, Wilson & Lafleur ltée, 2011)
[Pomerlim, Société en commandite v Société immobilière du Québec, 2010
QCCA 127, Sobeys Québec inc. v Coopérative des consommateurs de Stainte
Foy, [2006] RJQ 100 (CA),Civil Code of Quebec, article 1426]
13
Guidance and interpretation techniques
• Third rule: The rule of the global examination.
This rule states that we must first consider the
contract as a whole. Each of the provisions of
the contract really shows its extent when
read with the other clauses and with their
reconciliation we obtain a more complete
reading of each.
1427. Each clause of a contract is interpreted in light of the others so that each is
given the meaning derived from the contract as a whole.
[Civil Code of Quebec, article 1427]
14
Guidance and interpretation techniques
• Fourth rule: The rule of effectiveness.
This rule states that when a clause is
susceptible of two meanings, it must be
interpreted in the one in which it may have
some effect rather than in which it could have
none.
1428. A clause is given a meaning that gives it some effect rather than one that
gives it no effect.
[Civil Code of Quebec, article 1428]
15
Guidance and interpretation techniques
• Fifth rule: The binding force of contracts
This rule states that the interpreter shall choose
the meaning that best conforms to the subject
matter of the contract.
1429. Words susceptible of two meanings shall be given the meaning that best
conforms to the subject matter of the contract.
[Civil Code of Quebec, article 1429]
16
Guidance and interpretation techniques
• Sixth rule: Specific cases in the contract do not
limit its extent.
This rule states that if the parties decided to
include an example to illustrate a particular
case or decided to be more specific about one
matter, that does not mean that the contract
as a whole must be limited to these specific
situations.
1430. A clause intended to eliminate doubt as to the application of the contract to a
specific situation does not restrict the scope of a contract otherwise expressed
in general terms.
[Civil Code of Quebec, article 1430]
17
Guidance and interpretation techniques
• Seventh rule: Possibility to extend or restrict the
scope of the text
This rule states that the interpreter may extend
the scope of the text, but only when the text
does not exactly state the intention.
In parallel, the interpreter may restrict the
scope of the text, but also only when the text
do not exactly state the intention.
1431. The clauses of a contract cover only what it appears that the parties intended
to include, however general the terms used.
[Civil Code of Quebec, article 1431]
18
Guidance and interpretation techniques
• Eighth rule: The contra proferentum rule.
This rule states that, in case of doubt, the
contract shall be interpreted against the person
who drafted the contract.
1432. In case of doubt, a contract is interpreted in favour of the person who
contracted the obligation and against the person who stipulated it. In all cases, it is
interpreted in favour of the adhering party or the consumer.
[Civil Code of Quebec, article 1432]
19
Guidance and interpretation techniques
• Others rules regarding binding force and content
of contracts
o
External clauses
1435. An external clause referred to in a contract is binding on the parties.
In a consumer contract or a contract of adhesion, however, an external clause is
null if, at the time of formation of the contract, it was not expressly brought to the
attention of the consumer or adhering party, unless the other party proves that the
consumer or adhering party otherwise knew of it.
o
Illegible or incomprehensible clauses in contracts of adhesion
or consumer contracts
1436. In a consumer contract or a contract of adhesion, a clause which is illegible
or incomprehensible to a reasonable person is null if the consumer or the adhering
party suffers injury therefrom, unless the other party proves that an adequate
explanation of the nature and scope of the clause was given to the consumer or
adhering party.
[Civil Code of Quebec, articles 1435 and1436]
20
Guidance and interpretation techniques
• Others rules regarding binding force and content
of contracts (con’t)
o
Abusive clauses in contracts of adhesion or consumer
contracts
1437. An abusive clause in a consumer contract or contract of adhesion is null, or
the obligation arising from it may be reduced.
An abusive clause is a clause which is excessively and unreasonably detrimental
to the consumer or the adhering party and is therefore not in good faith; in
particular, a clause which so departs from the fundamental obligations arising from
the rules normally governing the contract that it changes the nature of the contract
is an abusive clause.
o
Effects of null clauses
1438. A clause which is null does not render the contract invalid in other respects,
unless it is apparent that the contract may be considered only as an indivisible
whole.
The same applies to a clause without effect or deemed unwritten.
[Civil Code of Quebec, articles 1437 and 1438]
21
Guidance and interpretation techniques
• Others rules regarding binding force and content
of contracts (con’t)
o
Possibility to resolve, resiliate, modify or revoke a contract
1439. A contract may not be resolved, resiliated, modified or revoked except on
grounds recognized by law or by agreement of the parties.
[Civil Code of Quebec, article 1439]
22
The approaches
• Frenette v. Metropolitan Life Insurance Co.,
[1992] 1 SCR 647 at 667
The Supreme Court of Canada said:
“[i]n the search for this intention, particular consideration must
be given to the terms used by the parties, the context in which
they are used and finally the purpose sought by the parties
using these terms.”
This quote includes the three main methods of interpretation.
[Frenette v. Metropolitan Life Insurance Co., [1992] 1 SCR 647 at 667]
23
The approaches
• The three main methods of interpretation
o The literal method
o The contextual method
o The purposive method
24
The approaches
The Literal method
This approach provides that a contract must be
understood by the examination of its text because it is
the instrument that the parties used to express
themselves.
[François Gendron, L’interprétation des contrats, Montréal, Wilson &
Lafleur, 2002, Entreprises Rioux and Nadeau Inc. v Société de
récupération, d’exploitation et de développement forestiers du
Québec (Rexfor), JE 2000-938 (CA), Mallette v Barrette, [1996], RDI
5 (CA)]
25
The approaches – Literal method
1) The natural meaning of the words
2) The constant meaning of words
3) The additions to the text
4) The respect of the text
5) The primacy of the manuscript on the printed text
6) The primacy of the most recent text
7) The primacy of the specific clauses
8) The logic of the context
[François Gendron, L’interprétation des contrats, Montréal, Wilson & Lafleur,
2002]
26
The approaches
The Contextual method
This approach provides that a contract is a coherent
scheme, it must be interpreted by considering a certain
internal harmony and must correspond with the
circumstances surrounding its drafting.
[François Gendron, L’interprétation des contrats, Montréal, Wilson &
Lafleur, 2002, Construction LPG inc v Compagnie d’assurances
Temple, 2009 QCCA 1260, Caisse populaire St-Louis-de-France v
Productions Mark Blandford inc., [2000] RJQ 1696 (CA), ABB Inc. v
Domtar Inc., [2007] 3 SCR 461, GMAC Location Ltée v Union
canadienne, compagnie d’assurances, [2008] RRA 13 (CA)]
27
The approaches – Contextual method
1) The rule of the global examination
2) The rule of effectiveness
3) The unreasonable interpretation
4) The circumstances of the contract
5) The interpretation of the parties
6) The four classical reasoning
7) The contra proferentem rule
8) The logic and arbitrary
[François Gendron, L’interprétation des contrats, Montréal, Wilson & Lafleur,
2002]
28
The approaches
The Purposive method
This approach provides that the interpreter shall seek the
internal intention of the parties. As the parties decided by
themselves and in full freedom the law that would govern
them, the interpreter must seek their thoughts when they
agreed.
[François Gendron, L’interprétation des contrats, Montréal, Wilson &
Lafleur, 2002, Fortin v Legault-Lanctôt, 2007 QCCA 333, St-Luc-deVincennes (Municipalité de) v Compostage Mauricie Inc., [2008] RJQ
309 (CA), Consolidated-Bathurst v Mutual Boiler and Machinery
Insurance Co., [1980] 1 SCR 888, Corporation de l’École
polytechnique de Montréal v Fardad, [2010] RJQ 1325 (CA)]
29
The approaches – Purposive method
1) The difficulty not provided in the contract
2) The good faith
3) The binding force of the contract
4) The nature of the contract
5) The “usages”
6) The equity
7) The law
8) The social will
[François Gendron, L’interprétation des contrats, Montréal, Wilson & Lafleur,
2002]
30
YAN BESNER
Partner
Dentons CANADA LLP
1 Place Ville Marie, Suite 3900
Montréal, Québec H3B 4M7
T +1 514 878 5824
M +1 514 758 0478
[email protected]
Admitted in Quebec
dentons.com
© 2014 Dentons
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