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3. Contractual Liability In Quebec
3.1 Breach of Contract
Two provisions in the Civil Code of Quebec set out the details of a claim for breach of contract. Article 1458, sets out the liability of the party in breach. Note how it mirrors the article for extra-contractual liability:
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 liable to reparations 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.
Article 1590 sets out what constitutes the performance of an obligation:
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.
Note that in the civil law, non-execution of the contract does not always give rise to a cause of action. For example, force majeure (superior force) exempts the contracting party from liability.
3.2 Remedies for Breach of Contract
Article 1590 sets out several of the remedies available for a breach of contract. In addition to specific performance, resiliation of the contract and resolution of the contract, mentioned in Article 1590, other remedies include reduction of obligations, non-execution, and the right of retention.
Unlike common law, where specific performance is an exceptional remedy, specific performance is a common remedy in Quebec. The court will refuse to grant specific performance where the obligation to be performed is intuitu personae (that is, requires unique and personal involvement by a physical person). Specific performance will also be denied where the obligation is illegal, dangerous, impossible or prejudices the rights of a third party and where the actions performed are sufficiently complex to render compliance with the order difficult or impossible to verify by the court.
The court may also grant the resolution or the resiliation of a contract. The resolution of a contract is the retrospective and prospective annulment of a contract, whereas resiliation is the prospective annulment of a contract. The plaintiff may also withhold execution of his obligations under the contract or retain property in his or her possession belonging to the defendant pending the execution of the contract by his or her co-contracting party. Where the breach by the defendant is not sufficiently serious to warrant resiliation or resolution, the plaintiff may also petition the court to reduce his or her correlative obligations under a bilateral contract.
3.3 Damages
In addition to the remedies listed in the previous section, the plaintiff may apply for damages to compensate a loss he has sustained or a profit of which he has been deprived. Contractual damages are less extensive than extra-contractual damages. The defendant is only liable for damages foreseeable at the time the obligation was contracted, except in cases of intentional or gross fault. Even in the latter case, the defendant can only be held liable for the immediate and direct consequences of the non-performance.
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