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__Notes from Jobin__ **107 – Preliminary Remarks** – 1437 allows a court to delete an abusive clause or to reduce its scope of application and effects. We have limited this to consumer Ks and Ks of adhesion – but this is criticizable – because these Ks do not have the monopoly on abusive clauses. Contractual justice should be universal. **108 – Distinction with Lesion** – Can a contracting party say that the //price// is abusive under article 1437, in order to introduce the concept of lesion into his claim? Some authors (Vezina) and courts have said yes (//Federation des medecins residants v. U de M//, [1994] RJQ 1650). But all this is moot because of s.8 of the LPC, which provides for lesion in consumer Ks. So for consumer Ks, this interpretation is fine. But some say that this interpretation outside of consumer Ks, in the adhesion K sphere, removes all of the content out of article 1405 and goes against the intention of the legislator – which demands lesion between majors “only in cases set out by law.” The distinction between the two concepts is this: abusive clauses deal with one part of the K, lesion looks at the whole K and the balance of prestations. Many have said that 1437 cannot therefore relate to price, which is a fundamental element of the K and not an accessory clause. There is a debate about whether 1437 applies to accessory clauses only, or all clauses. This makes no sense, says Jobin because non-negotiable clauses, be they accessory or not, will be the most likely to be draconian. This interpretation restricts things too far. The court of appeal agrees – because we need to protect good faith and equity. **109 – Distinction with Unforeseeability, Taking Payment, and Retaking Possession –** We could use article 1437 in situations where because of unforeseeable events, a clause becomes abusive. But remember that jurisprudence says that a K will generally not be revised for unforeseeability – Jobin says this should change.

Distinction with powers of the court to intervene in the taking of payment pursuant to a hypothec and the re-taking of possession at the end of a stipulated term – consider these rules – they allow a judge to evaluate situations of default and modify the K: //2778.// //Where, at the time of registration of the creditor's prior notice, the debtor has already discharged 1/2 or more of the obligation secured by the hypothec, the creditor shall obtain authorization from the court before taking property in payment, except where the person against whom the right is exercised has voluntarily surrendered the property.// //LPC// //107.// //If the consumer does not remedy his default within the time provided for in section 106, the balance of his obligation becomes payable unless, upon a motion by the consumer, the court changes the terms and conditions of payment according to such conditions as it considers reasonable or authorizes the consumer to return the goods to the merchant.// //144.// //If the court dismisses the motion, it shall allow the consumer to retain the goods and it may change the terms and conditions of payment of the balance according to such// //conditions// //as it deems reasonable.// **110 – Distinction with Abuse of right –** We might confuse this with abusive clauses, but remember that abuse of right is about the exercise of a right that is not abusive in and of itself. 1437 looks at situations where an abusive right is created by K. **111 – Nature** – Abusive clauses are a distinct concept of equity. **112 – Powers Accorded to the Judge –** The judge can reduce the effects of the abusive clause, but doing so is rare. Jobin says maybe judges should do this more in order to protect K stability. But K stability and predictability, while important, are not undermined by 1437. It’s just that we have to recognize that there is a little bit of a trade-off. We hope that 1437, in its granting of wide discretion, will cure and prevent injustices. Let’s not exaggerate and say that this article undermines stability and has a nefarious effect on commerce. This is going a bit far, despite what is said above. And courts do not apply 1437 all the time – it’s only half the claims that succeed. **113 – Scope of Application –** Consumer Ks and adhesion Ks only, so courts take a wide view of what counts as a consumer or adhesion K. Does 1437 apply to non-compete clauses? It seems that they are not regulated by 1437 if they are not work (adhesion?) contracts. 2089 sets out a specific regime for non-compete clauses. **114 – Good Faith –** There are two conditions for 1437 – it has to disadvantage the adherent to an excessive degree, and thus go against good faith. Are these two separate conditions? Some say that a lack of good faith //and// the unreasonable character should be proven. Most say good faith is not determinative, but illustrative, and we should look at the excessiveness of the clause. Good faith is the criteria by which we evaluate the excessiveness, so the conditions are not distinct. **115 – Method of Determination of Abusiveness –** Can be objective or subjectively abusive. Also, we take the relative positions of the parties into account. Sometimes, clauses don’t look abusive on their own; we have to see them in context. Other clauses seem draconian on their own but are not when put in context (like a unilateral power of resiliation for each party). Note that if a clause is standard, that doesn’t necessarily mean it isn’t abusive. __Example:__ « [55] J'ai peine à me convaincre que la clause sous étude est excessive et déraisonnable. Le caractère excessif d'une clause peut être apprécié soit en fonction d'un critère objectif (par exemple, exiger du contractant l'exécution d'une obligation pratiquement impossible à remplir ou totalement disproportionnée par rapport à l'obligation corrélative), soit en fonction d'un critère subjectif (c'est-à-dire en tenant compte de la situation particulière du contractant) et des difficultés auxquelles il peut faire face dans l'exécution de celle-ci. **//__Dans ce dernier cas, ce qui pourrait être excessif pour l'un, ne le sera pas nécessairement pour un autre__//**.» (//Québec (Procureur général)// c. //Kabakian-Kechichian//, [2000] R.J.Q. 1730 (C.A.) ) **116 – 1437 al. 2** – If the clause so departs from the fundamental obligations arising from the rules normally governing the contract that it changes the nature of the contract, it is abusive. The court looks at what is “normal” and judges from there, based on categories of Ks. Suppletive rules come into play – but going around them does not mean abuse per se. Exoneration clauses in tender Ks (“we don’t guarantee that the soil analysis is valid”) used to be okay, but now they are abusive because we have recognized a devoir d’information.