“L’équité+en+droit+des+contrats

Pierre-Gabriel Jobin: L’équité en droit des contrats

Jobin presents the basic notion that **“l’équité participle de la recherché de la justice … malgré la loi générale.”** It is a derogation from general law when to apply the general law in the particular circumstances would offend justice.

Since the time of the CCBC, the role of **equity in contracts** has greatly evolved in Quebec law due to actions of both the **legislator** and **jurisprudence**, or their mixed actions. This **evolution** has entailed moving away from strict adherence to the principle of **contractual freedom** and **judicial non-interference**. There is increasing recognition that contractual freedom is not always the right measure of contractual **justice** and can even lead to injustice, and that **judges** may be best placed to remedy unjust situations.

Now the principle of good faith, abuse of right, lesion between majors, abusive clauses, //imprévision//, and others are codified – these represent a consolidation of **jurisprudential developments** in equity, and the **introduction of new rules.**

Equity may take various forms (by the judge or legislator): - **modification of the general rule to adapt it to certain situations**
 * - particular rules **
 * - setting aside the general rule implicitly or expressly **

- Equity had an undeniable presence in the 1865 Code in certain rules but probably wasn’t foremost in the legislator’s mind. Moreover, contrary to the previous law in force and the French Civil Code (in some situations), the CCBC did not allow for the annulment of contracts due to **lesion**. Judges in both Quebec and France deferred to the legislature and avoided intervening in contractual freedom.
 * A. Le Code civil du Bas Canada **


 * B. L’époque du CCBC **


 * // 1. La loi //**

The legislator did respond to the changing times and the need for some equitable measures to avoid the effects of draconian practices. Some modifications took place during and after the Great Depression, with certain modifications aiming to protect consumers taking in 1947 especially. Further developments included:

- **1964 introduction of section called “de l’équité dans certains contrats”** à equity became a formal object of the law, and for the first time contracts could be attacked for **lesion** à new provision 1040c derogated from the principle of art. 1012 - **1960s** increasing recognition of consumers as a class to be protected throughout and - **1971 adoption of the //Consumer Protection Act//** = “un veritable bouleversement du droit privé québécois”, including allowing a judge to impose the sanction deemed most appropriate in the circumstances **- 1970s**: legislator granted **increasing power to judges** to determine and reduce or annul **abusive clauses**

**//2. La jurisprudence//**

- There was evolution in jurisprudence as well, and it probably would have taken place even without the legislative developments.

In the 19th and early 20th centuries, the theory of economic liberalism and the philosophy of the autonomy of the will dominated, and courts refused to intervene in contracts.

**Increasing recognition** **of** **implicit obligations from the 1960s onwards**: - in the **1960s and 1970s**, courts started to rely more on art. 1024 CCBC, and imposed certain implicit obligations based on equity or (more generally) the nature of the contract. - **//Soucisse//** (1981): creditor who benefits from a suretyship [//cautionnement//] has an obligation to divulge to the surety [//caution//]’s heirs the existence of the suretyship and the fact that it is revocable - **//Houle//** (1990): similar reasoning allowed for the application of the doctrine of abuse of right in contractual matters [Note: Now, good faith and relationships between creditors and heirs of sureties are codified (see CCQ 6, 7, 1375, 2361)]

- From about the **1980s onwards,** increasing sense of judicial desire to impose **minimum standars of morality in K law** by, for instance, making decisions beyond the text of law

à ex. __unjust enrichment__: effectively recognized in cases like **//Regent Taxi//** (1929) but **//Viger//** (1977) was the first case to recognize UI really explicitly and was a landmark for the courts’ recognition of their own ability to introduce a new institution or regime (not just a rule) on the basis of equity.


 * à ** ex. __dol par réticence__ (tacit misrepresentation): judges saw the injustice in the rule that they could only annul contracts if //dol// was determinative but not if it was incidental, so relied on 1053 CCBC (now 1457) to allow the victim some recovery (**//Demers c. Moreau//, //Bellemare c. Dionne//, //Bellerose c. Bouvier//**)

In **//Gareau Auto//** (1989), in which the Court of Appeal dealt with lesion in consumer contracts, one judge noted that the old notions of contractual freedom are not enough to fulfill the aims of contractual **justice.**

**C. Le CCQ**: codification and culmination of the above developments.

**//1. La loi//**:

// a) La codification de la jurisprudence // - ex. unjust enrichment (1493), reduction of obligations as a remedy/sanction (1407, 1604), abuse of right (7) represent codifications of jurisprudential developments. - **Most significantly, the codification of the principal of good faith has elevated equity to the level of a general principle. The two have much in common, but with some nuances, and good faith //encompasses// the principle of equity.**

// b) L’adoption de nouvelles règles //

- ex. Most notably, there is now arule that allows the court to reduce or annul an **abusive clause** (CCQ 1437) - ex. 1623 also allows the court to reduce an abusive **penal** clause - ex. A judge also has extensive powers to authorize or refuse the realization of a real surety - There are also many rules that allow the court to revise the contract

In certain areas, however, the legislator has //not// moved along with the advancement of equity (did not follow recommendations from the Office de révision), particularly in **IMPRÉVISION** and **LESION** between majors.

- courts will often recognize certain rules that have now been codified as arising from the principle of equity - equity is increasingly relied upon as a tool of interpretation in private law (ex. interpretation of an ambiguous contractual clause on the basis of equity)
 * // 2. La jurisprudence //**