U.S. COMMERCIAL DELEGATIONAerospace Innovation ForumContracting with Companies in Quebec

Dominique Babin, Partner (Montreal)514-846-2286

December 2013

Contracting with Companies inQuébec

• What you may be concerned with

English is obviously not their first language

What is civil law and how does it impact ourrelationship and contract?

Can our contract be governed by another law?

What implied warranties am I giving?

What are my recourses if things go bad?

Can I limit my liability?

What else should I know?

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French Language

• Charter of the French Language (known asBill 101)

• French is the official language of Québec• Some fundamental language rights public services, workplace, consumers and

instructions

• French or English may be used before thecourts – right to request translation ofjudgments in French or English

• Laws are enacted in French and English• Business contracts can generally be drafted

in English or in French

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Civil Law

• What is the Québec Civil Code? A set of rules that governs people, their

relationships with one and other and property Common law applies in other Canadian provinces

and some aspects of Quebec public laws

• What are the main differences with Commonlaw? Rules set out in the code as opposed to developed

by a set of judicial decisions Suppletive role of the rules of Québec Civil Code –

contracts are often less detailed than in commonlaw jurisdictions

Still a very stable and mature legal system

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Choice of Law

• In the absence of choice of law: law of thecountry with respect to which the contracthas its closest connection

• Parties are generally free to choose thelaw that will apply to their contract

• The United Nations Convention onContracts for the International Sales ofGoods will apply to the contract betweenparties in different jurisdictions, unlessexpressly excluded

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Recourses

• Enforcement by the courts

Provincial courts (first instance and appeal),Supreme court of Canada

Arbitration clause enforceable if exclusiveremedy

Choice of jurisdiction will be enforced

Consider difficulty of proving foreign law

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Recourses (Cont’d)

• Specific performance (injunction)• Termination or reduction of his own correlative

obligation Service contracts can be terminated unilaterally by the

client (event if no default), unless such right isexpressly waived by the client

• Damages direct damages future profits, to the extent they are certain and able to

be assessed foreseen or foreseeable at the time the obligation was

contracted, unless intentional or gross fault generally much lower than those awarded in the U.S. can be determined in advance (liquidated damages)

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Limitation of Liability

• A person cannot exclude or limit hisliability for material injury caused throughan intentional or gross fault

Gross fault = gross recklessness, grosscarelessness or gross negligence

• A person cannot in any way exclude orlimit his liability for bodily or moral injury

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What Else Should I Know?

• Some implied warranties of quality

• The contract is formed by the soleexchange of consents

• A promise to enter into a contract, whenaccepted, binds the parties to enter intothe contract

• Obligation for the parties to act in goodfaith at the time the obligation is created,performed and extinguished

• And much more…

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QUESTIONS?