General Motors v. Kravitz, [1979] 1 S.C.R. 790

General Motors v. Kravitz, [1979] 1 S.C.R. 790

Articles in C.c.Q:

Art. 1726: The seller is bound to warrant the buyer that the property and its accessories are, at the time of the sale, free of latent defects.

The seller is not bound, however, to warrant against any latent defect known to the buyer or any apparent defect.

Latent defects: the defects that render the property unfit for its intended use or diminish its usefulness so that the buyer would not have bought it or paid so high a price if he had aware of them.

An apparent defect: a defect that can be perceived by a prudent and diligent buyer without any need of expert assistance.

Art. 1728: If the seller was aware or could not have been unaware of the latent defect, the remedies would be the restore of the price AND the damages suffered by the buyer.

Under art. 1522 & 1527 C.c (now 1726 -1728), there is no doubt that in selling the vehicle to its dealer, GM became liable to it for the warranty against latent defects. Hence Plamondon could have brought a redhibitory and damage action against GM, based on this legal warranty against latent defects. In the appropriate circumstances, Kravitz could have exercised this remedy himself through an action in subrogation.

1. 
   The first question is whether the non-warranty stipulation contained in the k of sale b/w Plamondon and Kravitz, in the circumstances of the case at bar, should be held to be valid?
   

• 
  the French courts have consistently held that any clause avoiding or limiting the liability of a professional manufacturer or seller is void. Doctrinal comments are: 1) the stipulations in the k as the parties’ will is not absolute and it is necessary to assume that the parties are in good faith; it can not be used to allow one of them to stipulate in a k against the consequences of the “dol” he has committed when making this very contract. 2) the presumption of knowledge that flows from the professional status is considered to be not rebuttable. 3) in order to protect the non-professional buyer, the warranty against latent defects was considered as a matter of public policy in cases where the sale is made by a manufacturer or professional seller.
  
• 
  as to the case at bar, the judge preferred the French approach and saw no reason to depart from it. Moreover, the k of sale was a standard form k. In this type of k, a manufacturer or a professional seller is not permitted to ignore the warranty against latent defects or limit its effect, to the detriment of the non-professional buyer (this has already been adopted by the courts of Quebec).
  

2. 
   The second question is what about the effect of GM’s conventional warranty when the automobile was delivered to Kravitz.
   

• 
  Because neither a manufacturer nor generally a professional seller can contract out of the legal warranty against latent defects or limit the liability resulting from such warranty. Consequently, any provision of the conventional warranty which would be to relieve GM from its liability under the legal warranty for latent defects for which it is liable must be held to be null and void.
  
• 
  It follows that GM’s conventional warranty, stipulated in booklet No. 2 cannot be opposed to Kravitz’s claim against GM.
  

3. 
   The third question is whether Kravitz can exercise a direct remedy against GM based on the legal warranty against latent defects resulting from the sale b/w GM and Plamondon. In other words, the question is whether the warranty has effect only as b/w the immediate parties to the k or whether it can also benefit a subsequent purchaser or the thing sold.
   

• 
  the theory of relativity stated in art. 1023 C.c (1440 C.c.Q) was subject to the exceptions. The exceptions to the rule are based primarily on the interpretation of arts. 1028 to 1031 C.c (arts. 1443, 1444, 1441 and 1627 C.c.Q). The rules differ depending on whether a right or an obligation is involved. While it is generally true that a k binds only the contracting parties, and their successors either universal or by general title, this does not necessarily mean that a k can never benefit a successor by particular title. Indeed, it seems to have always been recognized that some rights are so closely related to a thing that they can benefit only its owner.
  
• 
  In France, the seller is liable on the warranty (whether the warranty against latent defects or that against eviction) not only to his immediate purchaser, but also to any susequent purchaser of the thing. => the doctrinal comments:
  

1. 
   Pothier stated that successors by particular title benefit from the stipulations pertaining to the thing they acquire.
   
2. 
   Lepargneur pointed out that “in the case of a personal right that is an advantage for the thing transferred and is so closely related to it that it cannot be exercised without the thing, common sense also seems to support the view that the purchaser should be allowed to enjoy this right, even without a special agreement.”
   
3. 
   Aubry & Rau: “the successor by particular title enjoys … all the rights and actions which have been identified with the thing as its active elements or which have become its accessories.”
   
4. 
   where an obligation is identified with the thing transferred or is the accessory thereof, the successor by particular title of the first seller is not regarded as a third party, and it is considered normal that he be automatically substituted for the previous creditor of such obligation.
   
5. 
   The warranty against latent defects, like the warranty against eviction, is clearly an accessory of the thing sold. “For a long time and in accordance with the general law, the courts have held that the obligation of warranty is transferred to the creditor’s successors” (C.B. 192). The sub-purchaser can bring this action directly against the original seller, because the action is tied to the thing sold as one of its accessories. The obligation to answer for latent defects is inherent in the sale, and the action designed to ensure performance of this obligation is transferred, as an accessory, to the holder of the thing sold.
   
6. 
   This solution as to the transfer of the warranty against latent defects is also valid as regards the warranty against eviction.
   

• 
  At end of the day, Pratte J created a new exception as to art. 1023 C.c (1440 C.c.Q).
  
• 
  There are some interest debates, such as the warranty against latent defects is a personal right or real right.
  
• 
  Jukier seems to be not satisfied by Pratte J’s interpretation that the warranty against latent defects is a real right (an accessory of the thing sold).
  

Les ayants cause à titre particulier: Baudouin –p.380

Les ayants cause à titre particulier = successors

• 
  L’ayant cause à titre particulier est celui qui reçoit de son auteur un droit ou un bien spécifique et déterminé soit entre vifs, soit à cause de mort.
  
• 
  L’acheteur, le cessionnaire, le légataire ou le donataire d’un bien.
  
• 
  Contrairement aux héritiers universels ou à title universel, ils ne continuent pas la personnalité juridique de leur auteur.
  
• 
  Les ayants cause à titre particulier sont des tiers à l’égard des contrats relatifs au bien ou au droit transmis par leur auteur.
  
• 
  Cependant si le contrat passé par l’auteur lui confère des droits réel, ce contrat profite alors aux ayants cause à titre particulier avec la même étendue et les même limitations, puisque, de par sa nature même, le droit réel suit le bien et est opposable à tous.
  
• 
  Il en est même pour certains droits personnels.
  
• 
  L’article 1442 C.c.Q introduit le principe de la transmission aux ayants cause à titre particulier des droits personnels, acquis par l’auteur, s’ils constituent l’accessoire du bien qui leur est transmis ou qu’ils lui sont intimement liés.
  
• 
  Le doit peut résulter d’une obligation contractuelle ou légale. I.e. la garantie contre les vices cachés dans le contrat de vent est transmise au sous-acquéreur.
  
• 
  Le principe de l’article 1442 est destiné à jouer un rôle important pour la protection des sous-acquéreurs et à recevoir une interprétation plutôt large.
  
• 
  Le principe est complété par des mécanismes comparables dans des contextes particuliers (dans la vente et dans le doit de la consommation).
  
• 
  L’ayants cause à titre particulier, par contre, ne sont pas tenus des obligations personnelles résultant d’un contrat conclu par leur auteur, à moins qu’ils ne s’y engagent.
  

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