par.+901-911+(clauses+pénales)

__901 – Notion et formes__ · Contractual freedom permits parties to include certain stipulations related to damages to be put into effect if the contract is violated. · In this way, damages may be replaced by a paneal clause. This clause fixes the amount due to the creditor in case of faulty execution by the debtor. · Penal clauses are often seen in contracts of service, sale, loan, lease, enterprise and shareholding (actionnaires). · The legislator may have the ability to restrain contractual liberty in relation to penal clauses.

· Penal clauses may take on various forms, for example: o 1) Stipulate a forfeit penalty in case execution is delayed or does not occur. In this way, the clause puts pressure on the debtor to respect the contract. o  2) Clause may be used to limit responsibility when the fixed sum is less than the amount of damages that could be awarded in the absence of a penalty clause. In this way, the debtor may restrict potential damages.

· Historically, penalty clauses could include prestations to do or not do something. However, the CCQ now suggests that the penalty may only be monetary. · **a. 1801:** payment in kind is prohibited.

· Doctrine on the juridical nature of the penalty clause hesitates between notions of private penalty and reparation of a fixed fee. The penalty clause links multiple institutions of law.

__902 - Distinctions__ 1) The penalty clause… · is distinct from a **deposit agreement** which is reciprocal, in principal, and aims to impede formation of a contract (whereas penalty clauses aim to impede its inexecution). ·  may also be distinguished from **alternative and “facultative” obligations.** In an alternative obligation, the debtor may choose a form of obligation that satisfies the contractual conditions. A penalty clause is subordinate to inexecution of the obligation and its mise en oeuvre belongs to the creditor. ·  is distinct from a **conditional obligation** in that it is only accessory to the principal obligation of the contract.

__903 – General rules__ · **a. 1374:** stipulation of a penalty must be determinable by the terms of the contract; the //quantum// is not left to the discretion of a party. · **a. 1432:** in case of ambiguity, the interpretation that favours the debtor is adopted. · Penalty clauses lead to conventional damages. · **a. 1594, a. 1597**: Guidelines stipulate that **before applying the clause, the creditor must follow the rules of the //mise en demeure//.** · **a. 1622:** The creditor is not obligated to use the penalty clause and may instead opt for specific performace (nature de l’obligation). Both may not be applied concurrently unless the penalty clause is for delay in performance. · In theory, the penalty may serve for fault that has already occurred, while specific performance could be applied to stop the fault from repeating in the future. · The nullity of the principal clause brings about the mullity of the penalty clause.

In the case of partial execution: · **a. 1623:** The penalty clause should be reduced proportionately if the partial execution is to the benefit of the creditor. A tribunal may reduce the penalty amount if the clause is abusive.

__904 - Limites législatives spécifiques a la validité__ · **//L.P.C.//** articles 13, 73, 124, 195(b), 203: contains dispositions against penalty clauses in various situations. · **//Loi sur la faillite et l’insolvabilité//:** tribunal may make an exception that is detrimental to the creditor. · **articles 748 1216, 1901:** restrain penalty clauses in agreements of will, inalienability and housing rental. · **a. 2762**: excludes right of the creditor to reclaim an indemnity other than interest owed and costs. · **A. 2129:** the entrepreneur must prove his prejudice · **//Loi sur le recouvrement de certaines creances//**: prohibits having the debtor account for fees involved in recovering for debt.

__905 – Loi sur l’intéret__ · **//Loi sur l’interet//, a. 8:** no penalty, fine or interest may be demanded that is greater than the non-overdue debt (arrieres) in the context of an hypothec.

__907 – Jurisprudential limits__ · **a. 1617, al. 3**: the creditor may stipulte in the contract that he may have recourse to supplementary damages. The creditor must prove the direct prejudice suffered.

__908 – Legal costs (frais de justice)__ · A common type of penalty clause is one in which the debtor must pay a supplementary amount if, in case of non-payment, the creditor is obligated to carry out judicial action and hire a lawyer (amount covers these costs). This type of clause is controversial. Beaudoin-Jobin believe that it should be accepted. · **a. 1617**, al. 3: upholds the validity of this “lawyer’s fee” clause. · **a. 1623:** not limited to contracts of adhersion and consumption (unlike **a. 1437).**

__909 – Divisible and indivisible obligation__ · When an obligation guaranteed by a penalty clause is indivisible, and inexecution is atrributable to one debtor only, the creditor has a choice to either reclaim the whole penalty from the faulty debtor or pursue each debtor for his or her own part. · **a. 1624:** in the latter scenario, one debtor can pursue the other (faulty) debtor to reimburse his part. · **a. 1625**: when the obligation is divisible, the penalty is too. The creditor has recourse against the faulty debtor and only for his part.

__910 – Solidary obligation__ · In the case of a solidary obligation, the creditor can demand that either of the debtors pay the entirety of the penalty amount. The payer then has recourse against the faulty debtor. · **a. 1625**: in the absence of solidarity, but in the presence of a stipulation that the penalty cannot be divided, and where one co-debtor has impeded execution of the obligation in its totality, the result is identical that of solidary obligation. The debtor can reclaim the total penalty from the faulty debtor or from the others for their part only.

__911 – Effects on third parties__ · When a third party is complicit to the violation of a contractual obligation to which a penalty clause applies, the third party is not linked by the penalty clause, even though he or she was aware of it. · **//Dostie c. Sabourin//** [2000], QCCA: the principal of the relative effect of contracts is opposed to linking a stranger by a conventional obligation such as this. Where the penalty clause is not only compensatory but comminatory (warns of punishment), there can be no imposition of the third party of a penalty to which he never consented. · //Compare with a non-competition clause that includes a penalty: complicity of a third party produces extracontractual reaponsibility towards the victim of the fault – see section “Responsibility of a third party towards the contracting party”.//