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Seller’s Obligation In A Contract of Sale (All You Need To Know)

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Seller’s Obligation In A Contract of Sale 

In Quebec civil law, a contract of sale is defined to be a contract between a buyer and a seller where the buyer obligates itself to pay a price of a property to the seller who agrees to transfer ownership of the property.

Article 1708 of the Civil Code of Quebec (CCQ) states:

Sale is a contract by which a person, the seller, transfers ownership of property to another person, the buyer, for a price in money which the latter obligates himself to pay.
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As a result, the seller’s main obligation is to convey title of the property to the buyer.

Article 1716 CCQ further indicates that the seller’s obligation is to deliver the property to the buyer and warrant the ownership and quality of the property.

Such warranties apply to the seller by operation of the law.

In other words, whether the parties have expressly stipulated such warranties in the sale contract or not, in virtue of the law, the seller is bound to these warranties.

Let’s look at these aspects.

Delivery of The Property 

The seller in a sale contract has an obligation to deliver the property to the buyer.

In this context, “delivery” means that the seller allows the buyer to take possession of the property and removes all obstacles or hindrances to allow the buyer to take possession.

For example, in the context of a sale of a home, the seller of the property must allow the buyer to enter into the property and take possession of it.

The Civil Code states that the seller must:

  • Provide the buyer the property in the condition it is in at the time of the sale
  • Hand over title documents to the buyer 
  • Provide the property as per the terms of the contract in area, volume, or quantity 

Also, the delivery expenses are generally assumed by the buyer.

Warranty of Ownership 

The seller has a duty to warrant its ownership to the buyer.

In other words, the seller is legally bound to guarantee that the property is free of all rights except those that have been declared to the buyer at the time of the sale.

In addition, the seller is responsible to ensure that the property is released and discharged from all hypothec so the buyer can receive the property free of any title encumbrances.

Article 1724 CCQ also states that the buyer must warrant to the buyer that the property is free from any encroachment on his part unless it was declared in the contract of sale.

The seller must also warrant to the buyer that the property does not violate any public law restrictions that may affect the property.

Warranty of Quality 

The warranty of quality is an important obligation assumed by the seller.

Article 1726 of the Civil Code of Quebec states that the seller must warrant to the buyer that the property is free from latent defects at the moment of the sale rendering it unfit for the use it was intended.

However, the seller is not legally bound to warrant the buyer against any latent defects known to the buyer or any apparent defect at the time of the sale.

An apparent defect is a type of defect that is visible or “apparent” and can be perceived by a prudent and diligent buyer without the need to resort to an expert.

The issue of latent defect or apparent defect results in many legal controversies, disputes, and lawsuits.

In fact, in many cases, buyers and sellers end up engaging civil lawsuits against one another alleging the other’s failure to provide the necessary information allowing the parties to provide an “informed” consent.

Latent defect

The Quebec laws drill further into the notion of latent defect providing Quebec citizens guidance on how to deal with it in the context of a sale.

In fact, if a property is lost or perished due to a latent defect that existed at the time of the sale, the law attributes the responsibility to the seller.

Also, if the seller was aware of the latent defect (or could not have been unaware), it will be liable to restore the price to the buyer but also make the necessary repairs to render the property fit once more.

Professional Seller

A professional seller selling property will face a legal presumption that can be quite significant.

If the buyer’s property malfunctions or prematurely deteriorates as compared to other similar properties or of the same type, the defect will be presumed to have existed at the time of the sale.

The professional seller can defend against this legal presumption by demonstrating that the buyer did not use the property according to the specifications or as it was intended.

Manufacturer

Just like any other seller, manufacturers (distributing property under its name or through others) and suppliers of property (wholesalers or importers) are bound to the seller’s warranty.

Legal Obligation of Sellers Takeaways 

So what is the legal definition of Seller’s Obligation In A Contract of Sale?

Let’s look at a summary of our findings.

Seller’s Obligation In A Contract of Sale In Quebec

  • A seller is legally required to deliver the property to buyer and warrant the ownership and quality of the same
  • “Delivery” takes place when the seller provides the property to the buyer, allows the buyer to take possession of it, or removes any hindrances allowing the buyer to take possession of the property
  • The seller must provide title to the property free of all encumbrances unless specifically disclosed in the contract of sale
  • The seller must provide a warranty of quality where the property must be free from latent defect (the seller is not bound to warrant the transaction against apparent defects present at the time of the sale)
Apparent defect 
Conventional hypothec 
Distribution agreement
Mandatory injunction 
Latent defect 
Legal hypothec 
Manufacturing agreement
Property title 
Purchase price
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Construction law 
Contract law
Contractual liability 
Contractual warranty
Conventional warranty
Enforce performance 
Property law 
Warranty of quality
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