In this article, we talk about the type of contract under the Quebec laws.
If you wonder what are the different contract types and what they mean, keep reading!
We will go over the notion of a contract and look at contracts of adhesion, mutual agreement, bilateral, unilateral, onerous, gratuitous and more.
We have divided this article into different sections to help you better navigate to the section of your choice:
- What is a contract?
- Contracts of adhesion
- Contracts by mutual agreement
- Bilateral contract
- Unilateral contract
- Onerous contracts
- Gratuitous contracts
- Commutative contracts
- Aleatory contracts
- Contracts of instantaneous performance
- Contracts of successive performance
- Consumer contracts
Let’s get started!
What is a contract?
Under Quebec laws, a contract is an agreement of wills where one or many people obligate themselves towards one or several other people.
So a contract can be formed when one person obligates himself towards another or several people obligate themselves to one another.
A contract can be formed when one person obligates himself or herself to another, like a gift.
In the case of a gift, this is a type of contract where you bind yourself to execute an obligation without expecting any corresponding obligation from anyone else in return.
In a case when the parties obligate themselves to one another, you also have a contract.
Like a service contract.
For example, if a software developer enters into a development contract with a client, the software developer will agree to develop software for the client and the client agrees to pay for such development.
Contracts of adhesion
A contract of adhesion is a type of contract that one party dictated the terms and conditions applicable to the contract without giving the other party a chance to negotiate the terms.
There may be cases where some minor clauses may have been negotiated but you’ll still have a contract of adhesion as long as the essential terms of the contract were imposed by one party to the other.
The moment a contract was substantially negotiated or at least the essential terms were negotiated, then you no longer have a contract of adhesion but rather a contract by mutual agreement.
Contracts by mutual agreement
A contract by mutual agreement is what we typically think of when we think of contracts.
It’s the ideal scenario when dealing with contracts.
A contract by mutual contract is a type of contract where the terms and conditions of the contract were duly negotiated by the parties and mutually agreed upon.
A bilateral contract is a contract where the parties mutually and reciprocally obligate themselves to one another.
Under the Quebec laws, a bilateral contract is also referred to as a synallagmatic contract.
This type of contract is one where each party will have to execute its contractual obligations to the other.
In some cases, one party can only execute his or her own obligations depending on the execution of the other party.
In other cases, the obligations of the parties are entirely independent from one another.
A bilateral contract is any contract mutually entered by the parties.
So if you enter into a contract to have a software developer develop software in exchange for a monetary sum that you will pay, considering it’s a contract mutually negotiated between the software developer and the client and benefits both, it is considered to be a bilateral contract.
A unilateral type of contract signed by two people where there is only one party obligated towards the others.
By referring to the word unilateral, we are referring to the fact that the obligations are assumed by only one party for the benefit of the other.
For example, in some business transactions, a party may sign a unilateral NDA.
This is a confidentiality agreement where one party alone will assume confidentiality obligations in favour of the other.
An onerous contract is a contract a party expects a benefit or an advantage in exchange for rendering his or her obligations.
For instance, a service contract where you expect to be paid for the services you render is an onerous contract.
Gratuitous contracts are another type of contract under Quebec laws.
In a gratuitous contract, one party will obligate himself or herself for the benefit of the other party without obtaining any advantage in return.
A gift is the most common form of a gratuitous contract.
The person giving a gift obligates himself or herself to give a gift and expects no benefit or advantage in return.
A commutative contract is a type of contract where at the moment of the formation of the contract, the obligations of each party are clear, certain and identifiable.
A commutative contract is also one where the obligations of one party is the equivalent of the obligation of the other.
A typical example is a contract of sale.
The obligation one party go give a thing in exchange for some money is equivalent to the obligation of the other to give money and receive a thing.
An aleatory contract is a type of contract where the extent of the obligations or advantages of one party or both is uncertain at the moment when the contract is formed.
In an aleatory contract, the execution of one party may depend on the happening of an event or even a random event beyond the control of the parties.
Most insurance contracts are aleatory contracts.
The obligations of the insurer to pay an indemnity depends on the happening of an event that may result in the insurance company having to pay.
The actual event could be fire, earthquake, theft.
It’s an event beyond the control of the parties.
Contracts of instantaneous performance
When the obligations of party can be executed or rendered at one single point in time, then the contract is considered to be a contract of instantaneous performance.
A contract of instantaneous performance can be a consumer contract for instance.
If you buy a computer from a store, you pay and receive the computer, the execution by both parties is instantaneously performed.
Contracts of successive performance
A contract of successive performance is a type of contract where the obligations can be executed over a period of time or continuously.
A rental agreement is a contract of successive performance.
The landlord must continually provide the leased premises in exchange for rent.
For so long as the landlord continually authorizes the tenant to live in the premises, the tenant will need to pay rent.
A consumer contract is a type of contract that involves a merchant and a consumer.
The consumer is a physical person purchasing goods or services for personal, family or domestic use.
The merchant is a business or enterprise offering products and services destined to consumers.
Consumer contracts may also be regulated by specific laws.
The Quebec civil laws define different types of contract classes.
Each contract class will result in different obligations on the contracting parties, which will impact the time when the obligation is to be executed and what each party can expect from one another.
An onerous contract is one where both parties expect to obligate themselves and receive a benefit.
A gratuitous contract is one where a party will render an obligation without expecting anything in return.
In this article, we went over 11 different contract types defined under Quebec laws.
Should you need any legal support from our law firm with regards to contract law, contract negotiations and closing, our contract lawyers in Montreal are happy to support you.
Good luck with your contracts!