A Checklist of Issues for Doing Business in Quebec

October 20, 2014

Contracts of adhesion and external clauses

Contract of adhesion: definition within the Civil Code

1379. A contract of adhesion is a contract in which the essential stipulations were imposed or drawn up by one of the parties, on his behalf or upon his instructions, and were not negotiable.

Any contract that is not a contract of adhesion is a contract by mutual agreement.

External clause: definition within the Civil Code

1435. An external clause referred to in a contract is binding on the parties.

In a consumer contract or a contract of adhesion, however, an external clause is null if, at the time of formation of the contract, it was not expressly brought to the attention of the consumer or adhering party, unless the other party proves that the consumer or adhering party otherwise knew of it.

What to keep in mind ?

Essential stipulations imposed by a party +

Inability to negotiate these stipulations

=> Contract of adhesion

External clause in a contract of adhesion

= > Must be expressly brought to the attention of the adhering party, at the time of formation of the contract

The Right to Terminate Service Contracts

Right to terminate • General grounds for terminating a contract in Quebec are similar to those applicable in common

law. A contract may be terminated by way of:a) expiry of the term of the contract;b) cause; c) agreement of the parties; andd) reasonable notice.

• In Quebec, the rules for terminating a service contract derogate from the general rules of contract termination, as the client may unilaterally resiliate the contract even though the work or provision of services is already in progress (2125 CCQ).

• The client can terminate the contract at any time, without having to claim a cause or allege the fault of the contractor. This right is limited only by an obligation to pay for the services already provided. The client is not responsible for any loss of profits.

• The service provider may not resiliate the contract unilaterally except for serious reasons and never at an inopportune moment; otherwise, he is liable for any injury caused to the client as a result of the resiliation (2126 CCQ).

• Article 2125 CCQ is not of public order and the parties can contractually renounce the benefit of it – must be unequivocal.

Employment

Employment

• Employment Standards, ch. N-1.1• Civil Code of Quebec• Charter of Human Rights and Freedoms, ch. C-12• Pay Equity, ch. E-12.001• Charter of the French Language, ch. C-11• Privacy Legislation, ch. P-39.1• Occupational Health and Safety, ch. S-2.1• Worker’s Compensation, ch. A-3.001• Labour Code, ch. C-27

Employment

• Employment Standards– Minimum wage: $10.35 (May 1, 2014)– Hours of work : 40 hours/week– Holidays: June 24th and July 1st– Vacation: can be taken the year when earned– Pregnancy and Parental Leave: 70 weeks– Psychological Harassment– Termination for Prohibited Practices– Termination for Just and Sufficient Cause– Notice of Termination– Mass Termination : threshold 10 employees in 2 month

running period

Employment

• Charter of the French Language– Employer cannot dismiss, lay off, demote or transfer

because the employee only speaks French– Employer cannot require the knowledge of a language

other than French as a condition of employment unless necessary for the job

• Pay Equity– To redress differences in compensation due to the

systemic gender discrimination suffered by persons who occupy positions in predominantly female job classes

– Obligations vary with the size of the company.

Introduction Lobbying registration

The Willard Hotel lobby

Quebec Lobbying Transparency and Ethics Act

«1. While recognizing that lobbying is a legitimate means of access to parliamentary, government and municipal institutions and that it is in the interest of the public that it be able to know who is attempting to influence such institutions, this Act is designed to foster transparency in the lobbying of public office holders and to ensure that lobbying activities are properly conducted. »

Lobbying & selling to a government or a government-owned corporation

2. Any oral or written communication with a public office holder in an attempt to influence or that may reasonably be considered by the initiator of the communication as capable of influencing a decision concerning

(…)

(3) the awarding of any contract, otherwise than by way of a call for public tenders, or of any grant or other financial benefit or the granting of any other form of benefit determined by government regulation, or

(…)

constitutes lobbying or a lobbying activity within the meaning of this Act.

The arranging by a lobbyist of a meeting between a public office holder and any other person is considered to be a lobbying activity.

What to keep in mind ?

Communication with a public office holder with the prospect of selling a product or a service to the

government = Lobbying

Lobbying => Registration + Compliance with the Quebec Lobbying Transparency and Ethics Act & the

Code of Conduct for Lobbyists

Contracting in good faith

Good faith in Quebec• The principle of good faith has universal application in negotiations and

contract performance in Quebec (1375 CCQ).

• Any behaviour judged to be excessive or unreasonable can be deemed to be in bad faith, despite a party’s lack of malicious intent.

• Good faith can take an active (positive obligations of disclosure, loyalty and cooperation) or passive (avoiding harm, excessiveness or unreasonableness) form.

• While the commom law concept of good faith only applies to the performance of contractual obligations, the obligation of good faith in Quebec applies to both the pre-contractual phase (including negotiations) and the performance of the contract.

French Language Issues

French Language Issues

• Charter of the French Language, ch. C-11• Major principles:

– French is the official language of Quebec– Everyone has the right to be communicated with in

French– Where the Act does not require the exclusive use

of the French language, French and another language can be used.

French Language Issues

• Application:– Agreements. No requirements for contracts between

businesses. Other agreements need to be available in French.

– Software. Distinction between software and packaging.– Business Name. Must be in French unless name is a

trademark not registered in French. – Francization of Business. Obligations vary with the

size of the company.– Penalties. $1,500 to $20,000. Discretionary fine up to

financial gain derived from offence. Double for subsequent offence.

Quebec’s Financial Markets Authority’s “Seal of Approval”

Relevant Contracts

An enterprise is required to obtain the AMF’s authorization if …

competing in a call for tenders or award process for construction and service contracts and subcontracts and public-private partnership contracts with a Québec public body involving an expenditure equal to or greater than $10 million and for which the award process begins on December 6, 2013;competing in a call for tenders or an award process for contracts for the construction, reconstruction, demolition, repair or renovation of roads, waterworks and sewer services of Ville de Montréal involving an expenditure equal to or greater than $100,000 and for which the award process begins on October 23, 2013, as well as for subcontracts of the same nature directly or indirectly related to such contracts and involving an expenditure equal to or greater than $25,000;bidding on a contract listed in the Orders in Council - Certain contracts of Ville de Montréal; 

Authorization

21.18. An enterprise that enters into a contract with a public body or that enters into a public subcontract must hold an authorization on the date the contract or subcontract is entered into. In the case of a consortium, every enterprise in the consortium must hold an authorization on that date.

Moreover, an enterprise that responds to a call for tenders for a public contract or subcontract must hold an authorization on the date it submits its bid, unless the call for tenders specifies a different date which precedes the date the contract is entered into.

An authorization must be maintained throughout the contract or subcontract.

21.41. An authorization is valid for a period of three years. (…)

What to keep in mind ?

Contract with a Quebec public body > 10 Million

(at the present time)

=> AMF’s authorization

Authorization procedure = Examination of the enterprise's antecedents + compliance with the high standards of integrity that the public is entitled to

expect

Class action exposure

• Quebec the “class action haven” of Canada - more than half of the class actions instituted in Canada are brought before courts in Quebec.

 • At the authorization stage, the court’s role is simply to ensure that the

plaintiff has asserted an arguable case, with no requirement for affidavit or expert evidence.

 • The motion for authorization involves simply checking that the class

action is an appropriate procedural mechanism for the action. Unlike in other jurisdictions, the class action need not be the best or even a preferable means for hearing the suit.

 • Several factors also lessen the financial risk for plaintiffs in Quebec. • Quebec’s welcoming attitude towards class actions may create risks for

businesses.

Class actions

Advertising Online in Quebec

Advertising Online in Quebec

• Charter of the French Language, ch. C-11

– Advertising must be in French although it may appear in English so long as French is as prominent.

• Consumer Protection Act, ch. P-40.1

– Prohibited practices : false or misleading representations, advertising to children under 13 years old.

• Act Respecting Lotteries, Publicity Contests and Amusement Machines, ch. L-6

– Notification and deposit obligations. Payment of fees.

Your presenters:

Hélène Deschamps MarquisPartner, Blakes(514) 982-4042 Anny LafranceManaging counsel, Electronic Arts (Canada), Inc.

Michel A. SolisLawyer, certified arbitrator and owner, Solis Juritech Inc.(514) 843-1392