F. Diesse, “Le devoir de coopération comme principe directeur du contrat” (1999) 43 Arch. phil. droit 259

F. Diesse, “Le devoir de coopération comme principe directeur du contrat” (1999) 43 Arch. phil. droit 259.

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  The duty to co-operate in context of K has always been a legal std., but std. that for a long time under the classical view of K we’ve put in the shadow of a strict or adversarial notion of contract (Similar to our notion of adversarial proceeding, where K has competition or as way of regulating a K).
  
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  We are returning/re-discovering a more fundamental logic of contract which will be co-operation and not conflict, where co-operation is a common goal between parties to a K.
  
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  He defines common goal as sum of individual interest of Ks. Belley says however this is a minimal definition of Ks to conceive of common interests as individual interest of parties to K. K is so much a fact of co-operation than conflict, that there is something in general experience of contract like an affectio contractus or societas (a sense of belonging).
  

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  This duty is a legal duty imposed by the law and then either recognised and explicitly expressed in K by parties; then this duty becomes a Contractual obligation by the very words or express intent of the parties.
  
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  If it is not express in K, the legal duty is an implicit obligation which will be implied by court on basis of considerations like fairness, usefulness, business efficacy, or good faith (hereinafter GF) which are all objective bases of duty to c-operate.
  

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  To co-operate is more than just to act faithfully or honestly. It is more than just avoiding causing an injury to the other party or refraining from acting to the detriment of other party.
  
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  There is a positive aspect behind this duty which is working together for a common or convergent interest or more generally the duty has to do with the fact of providing a benefit to the other party not just avoiding causing a detriment.
  

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  It is a legal std. content of which cannot be betterment before knowing of the special circumstances to be faced by parties.
  

1. Interdependence linked to solidarity between to parties:

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  Interdependence is importance in context of K whose development in future. The longer the term of the contract, the more uncertainty, the more need for solidarity of parties.
  

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  This is the basic notion of fairness and is the basic ingredient of duty to co-operate
  

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  Diesse gives the example where in collaboration between author and translator to have a good translation for performing K of translation there is a clear and important need for co-operation
  
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  Some Ks can’t go without co-operation between parties in process of performance. There cannot just be parallel performance by every party of his obligations. There is a need to work together to get positive results parties were seeking.
  

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  Diesse distinguishes between two complimentary functions. Duty to co-operate is means of regulation of contractual behaviour of creditor or debtor.
  
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  Creditor will have to exercise his right with respect for interest of other and considering common interest between parties. Creditor will not to insist on strict performance of K in order respect his obligation to co-operate.
  
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  Debtor will have to resist temptation to ask for modification of K, which is not possible for other party to refuse in performance of K, given the cost that would be incurred by creditor with refusal to modify
  
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  Evolution or/and adaptation of K: To promote better techniques or better methods of K negotiation/K management/K adaptation to changing circumstances. The duty to co-operate has dynamic function to force and to teach the parties the ways of promoting efficiency of their contractual relation in context of changing circumstances. They must learn better techniques of K (re)negotiation, adaptation, management. It is crucial in context of long-term K otherwise you will just get failure of long-term Ks. Duty to co-operate is a recipe for Contractual success in context in never-ending change of circumstances.
  

Provigo Distribution v. Supermarché A.R.G., [1998] R.J.Q. 47 (C.A.).

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  The court throws a word of caution about overusing the concept of good faith and abuse of right. They acknowledge the “new contractual morality” that is brought by art 6,7, and the doctrine of abuse of rights. But, they say it is a mistake to treat every non-execution of an implied obligation as an abuse of right. There is civil fault whenever an obligation is not performed, be it an express obligation or one that results from the nature of the K or from equity as per 1434 CCQ. The simple fact that there is non-performance of an implied obligation does not automatically entail an abuse of right, otherwise this notion will lose all meaning.
  
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  Thus, through the lens of good faith, and within the framework of implied obligation of the contract, the fault that was committed by Provigo was not that they exercised their right to compete with their franchisee, which was never excluded by the contract of franchise. Rather, it is that they failed to perform their obligation of collaboration and loyalty in providing technical and commercial assistance which would have allowed the franchisee to compete in the new climate that was largely created by the franchisor. They are allowed to compete, but the nature of the contract of franchise, which is one of affiliation and partnership, obviously limits the extent to which this competition can be free from any obligation to the competitor.
  
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  The franchisee was bound to buy 90% of its supplies from the Provigo, and the prices it paid prevented it from being able to compete if it wanted to realize a profit. Although it is not for the court to say what the reasonable and prudent franchisor should have precisely done in this situation, it is clear that they failed in their duty to collaborate in order to minimize the impact of the competition they created.
  

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  While there was a connection between the losses suffered by the Granby stores and the opening of the Heritage stores in that region, there was no evidence that showed that the Heritage store had an influence on the evolution of the food market in Cowansville generally, specifically on the Gagnon Group’s store in that area. So damages only awarded with respect to the losses suffered by the Granby stores.
  

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  Most commentators say that such a duty to co-operate can only work for relational, long-terms contracts such as this one, and not instant on-time transactions.
  
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  the more controversial question is whether the duty to co-operate requires parties to renegotiate the terms of the K when external circumstances change
  

(2) The burden of proof of superior force is on the debtor.

(2) A superior force is an unforeseeable and irresistible event, including external causes with the same characteristics.

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  This is the last aspect of the duty of Good Faith that we will be discussing in this course. We have seen how Good Faith has been imposed in contract, in non-applicability of contracts in Aselford, and the duty to inform in pre-contractual negotiations. We also discussed the duty to advise, which is a step up from the duty to inform. Statutes and jurisprudence have imposed an obligation to advise on professionals, banks, and financial advisors in particular.
  
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  The most extreme aspect of Good Faith is the argument that during the life of the contract there should be a duty to cooperate between the contracting parties. Can the duty to cooperate be a potential root to the bringing in of the doctrine of imprévision?
  
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  The Diesse article is long, dense, and repetitive, but an interesting aspect is the psychological about-face in the conception of a contract.
  
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  Classically, we think of a contract in conflictual terms, thinking the success of one party depends on the impoverishment of the other.
  
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  Diesse says a contract is about complementary rights, not conflicting rights. He pulls out what some other scholar said about contracts, that a contract is a form of partnership.
  
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  The idea that a contract requires partners to work in mutual interest is very different from the classical notion of individualism that prevailed in the 19^th century. “Partnership” means facilitating the other party’s means of reaching his goal, and taking into account his interests.
  
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  Provigo is a recent real-life example of the duty to cooperate.
  
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  It’s about a franchise contract. In exchange for the franchisee using the Provigo name and equipment, he gets to operate a Provigo supermarket. He has to purchase 90% of his supplies from Provigo’s distributive centre at the prices fixed in the contract. It was not an unfair agreement, when it was first agreed upon. It worked fine for ten years.
  
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  Then, Provigo initiates a new marketing strategy, opening Maxie and other supermarkets. The new strategy is “everyday low prices”. By opening these corporately-owned discount stores, they weren’t doing anything prohibited in the contract.
  
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  The Court of Appeal says Provigo never limited its right to open new corporate stores. The problem is that the franchisee was bound in his contract with Provigo to buy 90% of his supplies from Provigo at prices set in the contract. He couldn’t lower his prices, so he lost business. He sues Provigo for the losses he sustained. What if it had been another company, not Provigo, which competed with the franchisee?
  

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  The Court of Appeal says the contract contains implicitly a duty of Good Faith, which translates in these circumstances to an obligation of loyalty, partnership, and collaboration. The franchisor couldn’t just go off and do whatever it wanted, but had to make sure not to impoverish the franchisee. He had to give the franchisee a way to prevent or minimise the economic loss caused by the new strategy. Provigo is therefore held contractually liable in damages by not fulfilling this obligation of cooperation.
  
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  This case goes beyond Soucisse, Houle, etc., because it wasn’t intrinsically unfair or Draconian, and there was no abuse of right, and it worked well for ten years. The Court is saying that ten years into the life of a contract, you can’t act any way you want to without taking into account the interests of your co-contractant. This changes our conception of what a contract is.
  
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  It’s a powerful case, and now we can’t doubt the existence of a post-contractual obligation of cooperation. There is no doubt that a franchise agreement, by its very nature, lends itself to a duty to co-operate. But the judgement suggests that this duty goes further, extending to all relational contracts.
  

(Extension of the Obligation of Cooperation to Situations of Hardship)

Canada Starch v. Gill & Duffus, [Unreported – 1981] (Que. S.C.)

Facts: Canada Starch (plaintiff) claims damages from the defendant (Gill) for its failure to deliver peanuts it had bound itself to deliver. The defendant pleads that the failure was due to a cause beyond its reasonable control and that the action should be dismissed. Gill could not get more peanuts from its supplier due to a drought. They supplied 71% of the contracted tonnage.

Issues: Is the defendant liable towards the plaintiff for damages it incurred when it had to buy from other sources?

Holding: Nope. Action dismissed and no damages granted.

Ratio:

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  The defendant has not established that there was an absolute impossibility to buy US peanuts from other suppliers to make up the shortage under its contract with the plaintiff.
  
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  The defendant assumed that the force majeure clause in its contract applied. However, the defendant cannot be faulted for not buying in May since historically there had been an over-supply of peanuts. The court is of the opinion that the defendant did not deliver because of the action of the shellers that was brought about by the drought and the resulting crop failure.
  
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  If no peanut had been available in the US then the defendant could not be sentenced to pay the plaintiff’s damages. However, peanuts did become available at 3x the price of the contract. Otis Elevator will be applied. Thus, the action is dismissed and no damages are granted.
  

Note: Court rejects argument based on a) imprevision and b) force majeure in the CCLC.

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