Class 1 Introduction and the Civil Law Tradition Sept. 5 3
V. Karim, “La règle de bonne foi prévue dans l’article 1375 du Code civil du Québec: sa portée et les sanctions qui en découlent”
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V. Karim, “La règle de bonne foi prévue dans l’article 1375 du Code civil du Québec: sa portée et les sanctions qui en découlent”(2000) 41 C. de D. 435 DUTY TO ADVICE ADD OVERRIDES EXTEND – Pre-K/Formation DUDY TO COOP 1981 1990 1992 Soucisse Houle Bail: duty to inform Aselford 1981 SCC: Soucisse v. Banque Nationale Facts: Dr. Groulx signed a suretyship for Maurice Robitaille for present and future loans. Clause said it would be “binding on my estate and all my heirs.” Groulx died in 1963 and Robitaille kept borrowing after his death. Heirs claim that they should not have to pay back the money borrowed after Groulx died because the bank failed to inform them of the suretyship and thus deprived them of the opportunity to revoke it if they had so desired. Trial judge said terms of contract are clear: non-intervention, autonomy of will, etc. means they have to pay. Issue: Did the bank commit a fault in not informing the heirs of the suretyship? If so, how does that affect their claim? Holding: Bank committed a fault in not informing of the suretyship. In so doing they made the suretyship essentially irrevocable, thus placing itself in a more favorable position than it had been during the surety’s lifetime. The idea of a fin de non recevoir applies in Quebec law and one of its manifestations is that you cannot profit from your own fault. So, the bank is not allowed to claim back the money that was borrowed after Groulx’ death because it is through their own fault in not informing the heirs of the suretyship that the debt was incurred. Ratio: Beetz, J: If it were necessary to do so, I would not hesitate to hold that, to the extent that it wished to make new advances after the surety’s death, the bank was under an obligation as soon as it learned of the death itself to disclose to the heirs if the surety that the suretyships existed and were revocable I would hold that this obligation results from the principle that agreements must be performed in good faith […] the principle is axiomatic and agreements must be performed in good faith […] (citing Domat) There is no species of agreement in which it is not implied that one party owed good faith to the other party, with all the consequences which equity may demand, in the manner of stating the agreement as well as in the performance of what is agreed upon and all that follows therefrom In any event, once the bank informed the estate of some of the obligations of the suretyship, it assumed a duty to do this completely, because partial information is misleading information. The Bank cannot simply disclose what is to its advantage and withhold what is in its interest to withhold. By failing to disclose the suretyship the bank committed a fault and is therefore barred from benefiting from that fault. Fin de non recevoir can be based on the idea that a party cannot benefit from his wrongful conduct. Fin de non recevoir does not extinguish the debt, but makes it ineffective by precluding the creditor from bringing the action to which it gives rise. Interestingly, Beetz never actually modifies the written text of the contract, rather he bases himself on 1024 CCLC now 1434 CCQ that says that obligations are not just what were written but what was intended. Good faith is an implied obligation and includes the duty to inform of the suretyship after Groulx’s death. Since the heir has to choose to accept or refuse the succession, they must be able to make an informed decision. Therefore, he doesn’t really erode the autonomy of the will, just acts as though that obligation was implicit in the contract. DISCUSSION: The most important case which begins to recognize good faith in Quebec was the 1981 decision of Soucise. This case deals with a contract of suretyship. Under this contract the bank has the right to call on this suretyship even after the death of the surety. The new CCQ enacted an article 2361 that says: 2361: Notwithstanding any contrary provision, the death of the surety terminates the suretyship. = so looks like we can thank the Banque Nationale for a few codal provisions. The trial judge is very sympathetic to the defendants, but we are living under a concept of absolute rights and autonomy of the will. Beetz says that the bank is estopped from exercising its rights. If this is not in the Code where does the Court base this decision. CCLC 1024 and now 1434 (look also at 1375). CCLC 1024: The obligation of a contract extends not only to what is expressed in it, but also to all the consequences which, by equity, usage or law, are incident to the contract, according to its nature. CCQ 1434: A contract validly formed binds the parties who have entered into it not only as to what they have expressed in it but also as to what is incident to it according to its nature and in conformity with usage, equity or law. The juridical basis of this new obligation of good faith was an implied obligation of the party’s contract. This duty of good faith is generic which we see in case after case starts manifesting itself in different manners. In this case the duty of good faith puts the bank in the obligation to inform the heirs of the suretyship so they know how to act. Mr. Beetz J. never modifies the content of the contract. He could not do this because the civil law is very much based upon the notion of autonomy of the will because this would destroy the foundation of the contract. The concept of the heir is that the heir steps into the rights and obligations of the deceased. But in this case the heirs have to choose whether to assume or not these obligations. What is clever is that Beetz merely adds an obligation to the contract. There is the notion of pact sunt servanda but he can add another obligation. It does not change the contract but added and implied obligation, thereby he is not destroying the will of the parties. This is not your classic implied obligation, in both the CoL and CiL law you can imply obligation that if you would of asked the parties the parties would have said yes. This asks the question whether you are implying an obligation or whether you are imposing it? Good faith is taken one step further in Houle: notion of abuse of right, and that lack of good faith does not mean bad faith, but a lack of reasonable exercise of a right Directory: pubdocs -> files files -> International maritime conventions files -> Chapter 1: Property as rights, not thing files -> Insurance Law – May 4 files -> Contractual Obligations – Prof. Helge Dedek Introduction 1 files -> Constitutional Limits on Criminal Law 1 files -> Antonio Iacovelli Winter 2005 Advanced Criminal Law files -> Private International Law – Prof. Walsh Summer 2005 files -> Part I: conceptualizing and justifying ip space 3 files -> Part I – general 5 The Sources of Int’l Air Law 5 Q? How does customary law relate to int’l law? Download 0.68 Mb. Share with your friends:
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