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Contractual Liability: Damages For Breach of Contract Under Quebec Law

Wondering how contractual liability works in Quebec?

Can you claim damages for breach of contract under the Quebec laws?

How can you successfully get an award for damages before Quebec courts?

Who is responsible for compensating for your damages?

In this article, we will cover the concept of contractual liability in detail so you know exactly what to expect.

Are you ready?

Let’s get started…

Types of damages under the Civil Code of Quebec

Under the Quebec laws, a person or entity must compensate another for damages caused as a result of its fault, its actions or omissions.

This concept is referred to as civil liability under the Civil Code of Quebec.

The Civil Code defines two general types of civil liability:

  1. Contractual liability
  2. Extracontractual liability 

Contractual liability relates to damages caused during the execution of a contract whereas extracontractual liability refers to damages caused by two strangers who did not have a contractual relationship with one another.

For example, if a merchant sells a defective product causing the consumer damage, we will refer to such liability as contractual liability.

On the other hand, imagine you fall hurt yourself and suffer bodily damages as you enter into a coffee shop.

Because you do not have a contractual relationship with the coffee shop, you can claim extracontractual damages from the coffee shop owner.

The reason why you claim extracontractual damages from the coffee shop owner is that due to its negligence in properly cleaning the floor, you fell and suffered bodily harm.

What is contractual liability 

Contractual liability relates to a person or entity’s responsibility for damages caused in the course of the execution of its contractual obligations.

Damages can be caused by a contractual party trying to execute its obligations or as a result of poor or non-execution of its obligations.

More commonly, we refer to such instances as contractual responsibility or contractual damages.

Article 1458 of the Civil Code of Quebec defines contractual responsibility as follows:

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.

The law makes it clear that every person must honour his or her contractual obligations.

In the event a person fails to respect its contractual obligations, they expose themselves to potential liability for damages caused.

Types of damages recognized by Quebec law

Under the theory of contract liability, the Quebec civil law defines three category or types of damages:

  1. Bodily damages
  2. Moral damages
  3. Material damages

During the execution of its contractual obligations, if a person causes bodily, moral or material damages to the other, he or she will be held accountable to repair the injury caused.

Bodily injury is any type of injury that is caused to the physical body or integrity of a person.

Moral damages can be awarded if a person suffers psychological or emotional harm as a result of a breach of contractual obligations.

Material damages relate to damages caused to property and material assets or goods.

Let’s see what you need to prove in court to successfully get an award for damages.

Legal conditions to get an award for damages

Filing a lawsuit for contractual damages requires that you establish and prove three legal conditions:

  1. Fault
  2. Causal link or causation
  3. Damages

Let’s break these three conditions down one-by-one.

Condition 1: Fault

To prove fault, you must demonstrate to the court that the other contracting party acted in such a way as to breach the terms of the contract or statutory obligations.

Let’s look at an example to illustrate the notion of fault.

Imagine that you are looking to open a restaurant.

You find a beautiful commercial space and you sign a commercial lease with the landlord. 

The landlord contractually commits in providing you with a leased space free from any defects and in a good state of repair so you can operate a restaurant. 

However, a few years after you open, the landlord neglects to repair and maintain the premises.

The roof starts to leak regularly, the heating system and air conditioning system do not work properly and you have severe plumbing issues preventing you from running your business.

These are essential elements for you to operate a restaurant and the landlord had contractually committed to be responsible to repair them.

You notify the landlord many times in writing and the landlord still fails to do the repairs.

As a result of the poor state of affairs, you start losing your customers, you have many customer complaints and you are unable to run your restaurant business.

It appears that the landlord has failed in providing you with a leased premises in a proper state of repair allowing you to reasonably operate your restaurant. 

This is a typical case of a contractual fault where the landlord has breached the terms of its lease contract causing you damages. 

Condition 2: Causation

Once the element of a contractual fault has been proven, the second element you need to establish is the causation.

Causation or causal link means that you must demonstrate that you suffered damages as a result of the fault.

In other words, the damages were directly caused by the fault. 

In the example of our restaurant, the restaurant owner could not operate his restaurant due to the poor state of repair of the premises.

He lost his clientele, he had to spend money to prevent the ceiling from leaking further and cause further damages, his equipment was damaged by water and so on.

In this case, the tenant suffered prejudice directly as a result of the landlord’s failure to perform its contractual obligations.

The tenant can demonstrate that he may have lost restaurant equipment due to water damage resulting from the ceiling constantly leaking.

He can show customer complaints and refunds given because the ceiling was leaking or the restaurant temperature was not adequate.

The Quebec courts require the damages to be directly caused by the fault.

If the cause of the damages is indirect or not materially linked to the fault, the Quebec courts will not grant an award for damages.

Condition 3: Damages

The third legal requirement is to prove is the actual and damages.

If you file a lawsuit in Quebec seeking an award for damages, you must be able to prove that you suffered damages and prove the amount.

In the example of our restaurant owner, if he was unable to properly enjoy the commercial space he leased, he may quantify the following damages:

  1. Reduction of rent based on the proportion of the leased premises he was unable to use
  2. The market value of his damaged restaurant equipment
  3. The money spent on repairing the leaking ceiling or heating the premises

And so on.

If the tenant says that he wants a reduction of rent of 50% because he could not use half of the leased space, then the evidence must prove that 50% of the leased premises was unusable.

When the evidence is made, then he can quantify the loss by demanding a reduction of 50% of the value of the rent.

By adding up the total value of the different damages suffered, the commercial tenant can demonstrate that he or she suffered actual and direct damages as a result of the landlord’s failure to respect his commercial lease obligations.

Exemption from contractual liability 

Are there instances when a contractual party can be legally exempt from liability?

Article 1470 of the Civil Code of Quebec states that a person may free himself from liability for the injury caused to another by proving the existence of a superior force.

A superior force is an unforeseeable and irresistible event that could not have been reasonably predicted or forecasted.

We generally refer to this as the force majeure event.

To prove the existence of a force majeure, you must demonstrate the following conditions to be freed from your contractual obligations:

  1. The event was unforeseeable 
  2. The event was irresistible 
  3. The event was caused by an external cause

For example, if you enter into a contract with a signer to personally come and sign for you at your wedding and the singer gets into a severe car accident and cannot make it, this can be considered as a force majeure event.

In Quebec, during the 1990 Oka Crisis, the 1998 ice storm and the September 11, 2001 attacks, the courts have rendered judgments where contractual parties were freed from liability due to those events being qualified as force majeure events.

It’s important to note that just because there is a superior force does not mean that you can easily justify an impossibility to perform your contractual obligations.

In 2020, as a result of the COVID-19 pandemic, some contractual parties may be able to justify a force majeure event to free themselves from their contractual obligations and therefore liability.

Others may not. 

Just because there was a worldwide pandemic does not mean that everyone can free themselves from their obligations.

Every case will be analyzed by the Quebec courts based on the overall circumstances of the case such as:

  1. The existence of a force majeure clause in a contract
  2. The intensity of a debtor’s obligation 
  3. Obligations of result or contractual guarantees 
  4. How the event has led the debtor to the impossibility to fulfill its obligations 
  5. Any other factual circumstances pertinent to the court’s evaluation

Determining force majeure is highly circumstantial and is closely tied to the facts of the case.

You should consult with a civil lawyer or contract lawyer to evaluate your specific circumstances.

Are there damages that cannot be excluded contractually

Some damages cannot be excluded contractually under the Quebec civil law system.

Material damages

A person may not exclude or limit his or her liability for material damages caused as a result of an intentional or gross fault.

A gross fault is an action or fault showing gross recklessness, gross carelessness or gross negligence. 

This means that you can effectively limit or exclude your damages for material damages in all other instances.

Moral and bodily damages

A person cannot, in any way possible, limit or exclude his or her responsibility for moral or bodily damages.

If a person suffers bodily harm or suffers psychological or emotional prejudice, the party at fault has a legal duty and obligation to compensate such damages in full.

Even if a contract provides for a clause where bodily or moral damages are excluded, the law will not recognize such a contractual stipulation.

Contributory damages

Contributory damages refer to an instance where a party suffering damages had a role to play in the damages suffered.

If the victim of a fault contributed to the injury, the Quebec courts will evaluate the extent of the damages caused by the victim and deduct that from the total award for damages.

The law makes it clear that the victim’s actions or faults contributing to the damages should be assumed by the victim.

Apportionment of damages

What is the apportionment of damages?

The apportionment of damages is the process where the court evaluates the responsibility of several parties having caused prejudice or damages to another party.

In the case where the injury was caused by several contractual parties, the liability and responsibility will be shared between the parties in proportion to the seriousness of each of their fault.

This is referred to as the apportionment.

As mentioned before, if the victim of the damages had contributed to the damages, the court may apportion a proportion of the responsibility to the victim as well.

Aggravated damages

When a person suffers damages resulting from the contractual breach of the other party and due to his or her acts or omissions, the damages are aggravated, we refer to this as aggravated damages.

Under Quebec’s contract law, if the victim of damages could have avoided further damages or prevented the aggravation of the damages will be held responsible for the aggravated portion of the damages. 

Takeaways

A party suffering damages can seek compensation from the Quebec courts for the damages suffered.

If the damages were caused in the course of the execution of contractual obligations or related to the performance or non-performance of the contract, the legal theory of contractual liability will be pursued.

A person will be liable to compensate for material, moral or bodily damages due to his or her fault.

By proving the fault, causality and damages, you can successfully obtain an award for the direct damages you suffered as a result of the fault.

There are some instances where a person cannot exclude his or her responsibility for damages under a contract.

For example, a party acting recklessly or in a grossly negligent manner cannot exclude responsibility for material damages.

It’s also impossible to exclude your responsibility for bodily and moral damages caused to another.

The laws in Quebec are designed to provide the victim of a fault to get full compensation for direct damages.

If you have suffered damages as a result of contractual performance or non-performance, we recommend that you contact our lawyers to ensure you take the proper steps in ensuring you can fully claim your damages and avoid any contributory or aggravated damages.

We hope this article was useful in providing you additional insight into the concept of contractual liability under the Quebec laws.

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