Beaudouin- Jobin: Obligation de Cooperation

Beaudouin- Jobin: Obligation de Cooperation

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  Commands a positive respect, more than simple abstention
  
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  Depends on two factors: the pursuit by the parties of a common goal shown by their intention to collaborate and the frequency of the relations between the parties
  
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  See Bail
  
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  There is such an obligation for sure in contracts of insurance where the insured has co-operate with the insurer with respect to the declaration of risks and claims and also between franchisers and franchisees (Provigo)
  

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  The more controversial question is whether the duty to cooperate will entail requiring parties to modify and renegotiate contracts in light of changing circumstances. Are there circumstances of extreme difficulty in which the duty to cooperate means the creditor wouldn’t even require the debtor to fulfill contractual obligations? This is the doctrine of imprévision, loosely parallel to Common Law “frustration”.
  
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  See the Canada Starch peanut case.
  
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  U.S. farmers had a contract (under U.S. law) with the DF, a middleman, who had a contract with the PF under QC law to supply peanuts at 30 cents/pack. A drought in the U.S. reduces the amount of edible peanuts by 55%. The DF can’t get all the peanuts he promised the PF, unless he pays three times the price, so he delivers fewer peanuts than promised.
  
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  PF sues for damages. DF argues imprévision: he was caught with a drastic unforeseen event outside his control that interfered with economic situation.
  
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  The positive law in QC was that DF could argue Force Majeure under 1693 and 1470(2) CCQ, or impossibility under 1693. The problem is that paying three times the price is not impossible. From 30 cents to 90 cents. The question we mount is an argument that one party should be excused form performance or that the parties should renegotiate their K relationship if this happens… this is the doctrine of Imprevision and the closest CiL dealing with CoL’s frustration.
  
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  There is currently no doctrine of imprevision in Quebec Law, see Martin article. Barring an explicit clause put into the K by the parties or a specific enactment in a specific area, there is no doctrine of Imprevision. The courts don’t want get involved in K where performance would be difficult. However, art 1470 (2) and 1693 allows parties to get out of K when there is a force majeure. Purpose of this is to not repeat the law but to ask whether the next step in the development in the doctrine of GF is to take the Duty to Co-operate and use it as the stepping stone or the basis of the doctrine of Imprevision.
  
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  In Martin’s article, he asks: “est il equitable que l’un des parties exiges l’execution de contrat quand l’economie…boulverse…..pas prevue”..he says no and continues on that there are 4 ways to reason to ground Imprevision in a Duty of GF i.e. the duty of GF/duty to cooperate, implied obligation, reading in for impossibility to encompass economic issue, and . The other article by Stoffel-Munck a French doctrinal writer and he writes on Imprevision where he believes it is a natural extension of the duty to cooperate is to oblige the parties to renegotiate the K in light of the circumstances that arise. If you trace doctrine of Imprevision in Quebec, there was an attempt to legislate (1977 draft of CCQ) on this topic. But they said it would bring in to much uncertainty into the law of K. martin and Stoffel-Munck don’t think this is going too far but Quebec does.
  
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  Are there CiL jurisdictions that have adopted an Imprevision clause? In Germany, the courts have brought in a doctrine of Imprevision. Germnay is an adventurous jurisdiction. ON what basis has German CiL adopted the doctrine of Imprevision, and what si the remedy they are using? Historically, the triggering event in Germany which caused them to cause about modifying their legislation and laws was the devaluation of the mark at the end of WW1. Two decisions that arose b/c of this incredible devaluation in the currency that caused revision of hardship in contracts. Other things have surfaced as well that have caused imbalance in Ks. They are: t Berlin Blockade and the German reunification…unforeseeable and caused great disruption has forced the hardship issue come before the courts in a way that it wouldn’t in Quebec. Prof loves Peanut case however! IN this area of law, Germany is most like England. But Germany still doesn’t have an expressed clause on Imprevision. No specific legislation on Imprevision and the courts in the 1920s and 1950s and most recently in ‘92, have decided on the doctrine of Imprevision based on section 242 of the German Code which is the provision of GF. Thus doctrine of Imprevision is grounded in GF, where Martin and Stoffel say it should be. Also note, how is the duty to cooperate to bring in Imprevision different from what is happening under CoL rubric of frustration? If Peanut case arose in CoL, what would the powers of the courts be? They would tell the parties not to perform. Frustration is an excuse form performing…I don’t have to deliver the peanuts at 30 cents per pound because this K was frustrated…like a cancelling of the obligations under the K. That doesn’t mean that aspects of unjust enrichment won’t come into play and other things. Anyway, when the currencies devalued or there’s a draught, or blockade or an oil embargo, any big event that affects economics, you must sit down with contracting parties and renegotiate. If they don’t renegotiate, what is the remedy? If there are no peanuts? The CiL reasoning…obligation of GF, duty to cooperate, to renegotiate, but if not….no splitting of loss in frustration, it’s all or nothing, you are either excused or not. The damages will probably be 30 cents assuming that a reasonable negotiation get to 30 cents a pound. Can the judge impose the solution on the parties? No. Stoffel-Munck says you can’t do that b/c we’ve already thrown away the will of parties, and it could potentially hurt both parties terribly. The parties have a right not to contract. The one freedom that can never be taken away from you is your freedom to or not to contract. But he still wants Imprevision to be worked into GF.
  
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  In Cardinal Construction, the Court of Appeal says “la théorie de l’imprévision n’est guère reconnue dans notre loi”, so there’s no similar doctrine to frustration in Civil Law. The 1977 Draft Civil Code envisioned modification of a contract as a result of excessive hardship caused by unforeseeable circumstances – but this was not included in the new CCQ.
  
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  In Churchill Falls, there was potentially a 65 year long contract between Churchill Falls and the Quebec government to supply all hydro power from the falls to Quebec at low prices, requiring the Nfld government to buy its hydro elsewhere at higher prices. In extreme circumstances like a huge drought, should we have an ability to go in and modify the contract to re-establish its economic equilibrium? Is the next step in the development of Good Faith to take the duty to cooperate and develop it into a doctrine of imprévision? Is the PF not in Good Faith by requiring the DF to be held strictly to the contractual obligation? In Canada Starch, the PF was making peanut butter. The argument was that the PF didn’t mitigate his damages, by raising the price of peanut butter and passing on the increased cost to the consumer. So especially in circumstances where PF can get back some of the damages, doesn’t that go toward an argument that the PF is not in Good Faith? No recognition for the need to revise the K even though it was 65 years old and on longer makes any sense. This is QC’s great event…so you see, nothing like in Germany.
  
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  Is the extension of the obligation to cooperate the obligation to require parties to renegotiate? Stoffel-Munck says a party should not be allowed to insist on strict legal rights in situations that greatly disrupt equilibrium between parties. He refers on p. 247 to a case called BP v. Huard, in which Huard owns a car repair shop and enters a contract of distribution with BP agreeing to buy petroleum products from BP for a certain price. In 1982, prices were deregulated in France, and the price went down 17 centimes/litre. Unlike the Provigo case, it’s not the co-contractant that causes the other party to sustain damage by fulfilling the contract. The Cour de cassation said the failure to renegotiate was a breach of Good Faith. So we’re on the cusp, and it’s just a matter of time before a court says there’s a duty to renegotiate.
  
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  There are as many opponents to imprévision as there are proponents. Some say the parties should include clauses to cover changes of circumstance. One scholar suggests reading “economic impossibility” into the definition of force majeure. But this isn’t plausible because there have been opportunities for courts to do this, and they haven’t done so. Quebec Civil Law has a mental block with respect to lesion and imprévision, where courts remain wedded to autonomy of the will. Yet there is no such block when it comes to Good Faith. Jukier characterises this as schizophrenic, drastic inconsistency.
  
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  Remedies for imprévision