Civil Code of Québec, 1991

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Loss from a solidary debtor’s insolvency is shared among the other co-debtors, unless their debt interests are unequal.

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A solidary debtor sued for reimbursement may raise common defenses not already raised against the creditor, and may also raise personal defenses of their own.

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The obligation of a solidary debtor is divided by law between the debtor’s heirs, unless the obligation is indivisible.

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1541. Solidarity between creditors exists only where it has been expressly stipulated. It entitles each of them to exact the whole performance of the obligation from the debtor and to give a full acquittance for it. 1991, c. 64, a. 1541.

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Paying an obligation to one solidary creditor releases the debtor from that obligation toward the other creditors.

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1543. A debtor has the option of performing the obligation in favour of any of the solidary creditors, provided he has not been sued by any of them. A release from the obligation granted by one of the solidary creditors releases the

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An obligation for the benefit of a solidary creditor is divided between the creditor’s heirs by operation of law.

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An obligation is alternative only if it has two principal prestations and either one can release the debtor for the whole; if one prestation was impossible when the obligation arose, it is not alternative.

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The debtor has the choice of the prestation unless that choice is expressly given to the creditor.

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A debtor must not perform, or be forced to perform, only part of one prestation and part of another.

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If the debtor may choose the prestation and one option becomes impossible, the debtor must perform the remaining one.

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If the creditor chose the prestation and one becomes impossible, the creditor must accept the remaining prestation unless the debtor is at fault.

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1550. Where all the prestations become impossible to perform through no fault of the debtor, the obligation is extinguished. 1991, c. 64, a. 1550.

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1551. The obligation is an alternative obligation even where it has more than two principal prestations as its object, and the rules of this subdivision apply, adapted as required, to all such obligations. 1991, c. 64, a. 1551.

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A facultative obligation has one principal prestation, but the debtor may discharge it by performing another prestation.

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“Payment” includes both paying money to satisfy an obligation and actually performing what the obligation requires.

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A payment made without an obligation may be recovered, except where it was a natural obligation voluntarily paid.

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Payment may be made by any person, including a third person, and a creditor may be put in default by a third person’s offer to perform for the debtor if the offer benefits the debtor and is not meant just to change creditors.

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A valid payment can only be made by a person who has the right to give it in payment.

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Payment must be made to the creditor or an authorized recipient; payment to a third person is valid only if the creditor ratifies it, or otherwise only to the extent of the creditor’s benefit.

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A payment to a creditor who lacks capacity to receive it is valid only to the extent of the benefit the creditor gets from it.

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A payment made in good faith to the apparent creditor is valid, even if it later turns out that person was not the rightful creditor.

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A payment by a debtor to one creditor is not valid against a seizing creditor if it prejudices that seizing creditor.

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A creditor cannot be forced to accept payment other than what is owed, even if the offer is worth more, and cannot be forced to accept partial payment unless the debt is disputed in part.

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A debtor is released when certain and determinate property is handed over in its actual condition at payment, if the deterioration was not caused by the debtor and did not occur after default.

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If the property is only identified by kind, the debtor does not have to provide the best quality, but must not offer the worst quality.

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A debtor who owes money is released by paying the amount due in legal tender at the time of payment.

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1565. Interest is paid at the agreed rate or, if none, at the legal rate. 1991, c. 64, a. 1565.

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Payment must be made at the place indicated by the parties, or otherwise at the debtor’s domicile, unless the debt is for certain and determinate property.

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The debtor must bear the expenses attending payment.

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A debtor who pays the debt is entitled to an acquittance and the original title of the obligation.

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A debtor with several debts may choose which debt to pay, but cannot choose an unpaid debt over one already due unless the creditor agreed to early payment.

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A debtor with an interest-bearing or periodically payable debt may not, without the creditor’s consent, apply a payment to principal before interest or periodic payments; partial payments are applied first to interest.

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If a debtor with several debts accepts an acquittance that allocates payment to one debt, the debtor cannot later demand that the payment be applied to another debt unless the contract could be annulled.

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1572. In the absence of imputation by the parties, payment is imputed first to the debt that is due. Where several debts are due, payment is imputed to the debt which the debtor has the greatest interest in paying. Where the debtor has the

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If a creditor refuses or neglects to accept payment, the debtor may make a tender.

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If money is being tendered, it may be paid in legal tender, by certified cheque to the creditor, or by an irrevocable and unconditional undertaking from a Québec financial institution.

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Tender may be made in several forms, including a notarial act en minute or a recorded judicial declaration; other writings or methods are allowed if proved.

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If a tender of money or securities is made by judicial declaration, it must be completed by depositing the money or securities.

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If payment or delivery is to occur at the debtor’s domicile or where the property is located, the debtor’s written notice that the debtor is ready to perform has the same effect as a tender.

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If what is owed is money or securities, the debtor may give the creditor written notice that the amount or securities have been deposited, and that notice has the same effect as a tender.

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A tender, or a notice with the same effect, must state the debt, how it was created, who the creditor or payee is, and describe the property tendered; cash must also list each denomination.

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A creditor is considered in default by operation of law if they refuse a valid tender without justification, refuse a notice with the same effect, clearly say they will refuse any tender, or cannot be found despite the debtor’s diligence.

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If the creditor is in default for not receiving payment, the debtor may preserve the property owed, including by giving it to a third person for storage or custody.

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A creditor in default for not receiving payment must bear certain preservation, sale, and deposit costs, and also bears the risk of loss by superior force.

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A debtor may deposit money or securities owed in the Québec general deposit office, with an authorized trust company, or during judicial proceedings under the Code of Civil Procedure.

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A debtor may withdraw deposited money or securities only before the creditor accepts the deposit; no withdrawal is allowed during judicial proceedings unless the court authorizes it.

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If a court has declared the deposit valid, the debtor may not withdraw it unless the creditor consents.

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A qualifying deposit releases the debtor from paying future interest or income yielded.

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Interest or income from a deposit belongs to the creditor from the deposit date, unless the deposit is made to obtain performance of a correlative obligation; in that case, it belongs to the debtor until the creditor accepts the deposit.

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1588. A tender accepted by the creditor or declared valid by the court is equivalent, with respect to the debtor, to payment made on the day of the tender or of the notice having the same effect, provided the debtor has always been willing

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If the court accepts or declares valid a tender and deposit, the creditor bears the related expenses.

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The creditor may demand full, proper, and prompt performance of the obligation, and if the debtor defaults without justification, may seek specific performance, contract resolution or resiliation in a contractual case, or other legal enforcement measures.

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If one party to a synallagmatic contract substantially fails to perform, the other party may refuse to perform its corresponding obligation, unless it must perform first by law, agreement, or usage.

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A party in detention of another party’s property, with that party’s consent, may retain it until the claim is fully paid if the claim is due and closely related to the detained property.

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A right of retention may be asserted against anyone, and involuntary dispossession does not end that right.

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A debtor may be in default if the contract says time alone triggers default, or if the creditor makes an extrajudicial demand, files a judicial application, or default arises by law.

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A creditor’s extrajudicial default demand must be in writing.

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If a creditor brings a judicial application against a debtor who is not otherwise in default, the debtor may perform the obligation within a reasonable time after the demand.

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A debtor is in default by operation of law in several specified situations, including when time-sensitive performance expires, urgent performance is not done immediately, an obligation not to do is violated, performance becomes impossible through the debtor’s fault, the debtor clearly says it will not perform, or repeated refusal or neglect occurs for successive performance.

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The creditor must prove that one of the cases of default by operation of law occurred, even if a statement or stipulation says otherwise.

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An extrajudicial demand against one solidary debtor also has effect against the other debtors; a similar demand by one solidary creditor also has effect against the other creditors.

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If the obligation is for money, the debtor may be liable for injury caused by delay once in default, even if a grace period was granted.

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A creditor may demand specific performance from the debtor in cases where that remedy is available.

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If the debtor is in default, the creditor may perform the obligation or have it performed at the debtor’s expense.

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The creditor may be authorized to destroy or remove, at the debtor’s expense, work done in breach of a negative obligation.

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A creditor may seek contract resolution or resiliation instead of specific performance, but not for a minor default unless repeated in successive performance; the creditor may then get a proportional reduction, or damages only if reduction is impossible.

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A contract may be resolved or resiliated without judicial action if the debtor is in default by operation of law or fails to perform within the time set in the demand putting him in default.

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If a contract is resolved, it is treated as never having existed and each party must return what it has already received. If a contract is resiliated, it ends only for the future.

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A creditor is entitled to damages for bodily, moral, or material injury that directly and immediately results from the debtor’s default.

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The debtor’s duty to pay damages to the creditor is not reduced or changed because the creditor gets a benefit from a third person, except where that third person is subrogated to the creditor’s rights.

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Certain acquittances, transactions, or statements about bodily or moral injury are ineffective if they harm the creditor and were obtained within 30 days of the injury-causing act or omission.

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A creditor may assign or transmit the right to damages, including punitive damages, except when the claim arises from infringement of a personality right.

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1611. The damages due to the creditor compensate for the amount of the loss he has sustained and the profit of which he has been deprived. Future injury which is certain and assessable is taken into account in awarding damages. 1991, c.

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A trade secret owner’s loss includes investment expenses for acquiring, perfecting, and using the secret.

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A debtor is liable only for damages that were foreseen or foreseeable when the obligation was contracted, if the nonperformance was not caused by intentional or gross fault by the debtor.

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Damages for future aspects of bodily injury are measured using discount rates set by Government regulation, starting when those rates are set.

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When awarding damages for bodily injury, the court may reserve the creditor’s right to ask for additional damages for up to three years if the person’s physical condition cannot be determined precisely at judgment.

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Damages for injury are generally payable as capital all at once unless the parties agree otherwise.

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If payment of money is delayed, damages are interest at the agreed rate or, if there is no agreement, at the legal rate.

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1618. Damages other than those resulting from delay in the performance of an obligation to pay a sum of money bear interest at the rate agreed by the parties, or, in the absence of agreement, at the legal rate, from the date of default or

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An indemnity may be added to damages awarded, using a specified interest-rate-based formula.

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Interest on principal does not itself earn interest unless an agreement, a law, or an express demand for additional interest in a suit allows it.

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If punitive damages are available by law, the amount cannot exceed what is needed for their preventive purpose.

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A penal clause lets the parties fix damages in advance, and a creditor may use it instead of specific performance where that is allowed.

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A creditor using a penal clause is entitled to the stipulated penalty without proving injury.

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If a penal-clause obligation is indivisible and only one co-debtor caused the nonperformance, the penalty may be claimed in full from that person or split among co-debtors for their shares.

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For a divisible obligation with a penal clause, the penalty applies only to the debtor who fails to perform, and only for that debtor’s share.

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A creditor may take necessary or useful measures to preserve rights.

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A creditor with a certain, liquid, and exigible claim may exercise the debtor’s rights and actions in the debtor’s name if the debtor refuses or neglects to act to the creditor’s prejudice.

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The claim does not need to be liquid and exigible when the action starts, but it must be liquid and exigible when judgment is rendered.

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A person sued by oblique action may raise against the creditor any defenses available against that person’s own creditor.

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Property recovered by a creditor in the debtor’s name becomes part of the debtor’s patrimony and benefits all creditors.

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A creditor injured by a debtor’s fraudulent act may ask for a declaration that the act cannot be set up against the creditor.

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1632. An onerous contract or a payment made in performance of such a contract is deemed to be made with fraudulent intent if the other contracting party or the creditor knew the debtor to be insolvent or knew that the debtor, by the

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1633. A gratuitous contract or a payment made in performance of such a contract is deemed to be made with fraudulent intent, even if the other contracting party or the creditor was unaware of the facts, where the debtor is or becomes

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A claim must be certain when the action starts, liquid and exigible when judgment is rendered, and it must generally have existed before the challenged juridical act.

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An action is forfeited unless brought within one year of the relevant trigger date.

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A juridical act that cannot be set up against the creditor also cannot be set up against other qualifying creditors who intervened to protect their rights.

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1637. A creditor may assign to a third person all or part of a claim or a right of action which he has against his debtor. He may not, however, make an assignment that is injurious to the rights of the debtor or that renders his obligation

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1638. The assignment of a claim includes its accessories. 1991, c. 64, a. 1638.

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If an assignment is by onerous title, the assignor warrants that the claim exists and is owed to him, unless the assignee took it at his own risk or knew the claim was uncertain.

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If an assignor under onerous title gives a simple warranty that the debtor is solvent, the assignor is liable only at the time of assignment and only up to the price received.

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An assignment can be set up against the debtor and third persons once the debtor agrees, receives certain assignment documents, or—if the debtor cannot be found in Québec—after notice is published under the Code of Civil Procedure.

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An assignment of a universality of claims, present or future, may be set up against debtors and third persons if it is registered and the other required formalities are observed.

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A debtor may use certain earlier payments or other pre-assignment extinction causes against an assignee.

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1644. Where a copy or an extract of the act of assignment or any other evidence of the assignment which may be set up against an assignor is handed over to the debtor at the time of service of an action brought against the debtor, no legal

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An assignment cannot be set up against a surety unless the prescribed formalities for setting it up against the debtor have also been observed for that surety.

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Claims are paid pro rata by value; assignees with a warranty of payment rank ahead of other assignees and the assignor.

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A claim attested by a bearer instrument issued by a debtor may be assigned by delivery of the instrument to another bearer.

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A debtor who issued a bearer instrument must pay the debt to a bearer who presents the instrument, unless notified of a judgment to withhold payment.

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A debtor who issues a bearer instrument stays bound to every good-faith bearer, even if the debtor proves it was negotiated against the debtor’s will.

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A person unjustly dispossessed of a bearer instrument may not stop the debtor from paying the claim to the person who presents it, unless notified of a court order.

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A person who pays a debtor's obligation may be subrogated to the creditor's rights.

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Subrogation may be conventional or legal.

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Conventional subrogation may be made by the creditor or the debtor, but it must be made expressly and in writing.

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A creditor may make subrogation only when receiving payment.

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A debtor may only make subrogation in favour of the lender, and the creditor’s consent is not required.

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Subrogation happens automatically by law in listed payment situations.

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Subrogation applies against the principal debtor and his warrantors, and they may raise against the subrogated person the defenses they had against the original creditor.

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If a creditor has been only partly paid, the creditor may claim the unpaid balance ahead of the person subrogated. But if the creditor promised the person subrogated to guarantee payment of the subrogated amount, the person subrogated has priority.

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Unless there is an agreement to the contrary, persons subrogated to the rights of the same creditor are paid in proportion to their share in the subrogated payment.

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Novation happens when a new debt, debtor, or creditor replaces the former one.

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1661. Novation is not presumed; the intention to effect it must be evident. 1991, c. 64, a. 1661; I.N. 2014-05-01.

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Hypothecs attached to the former claim do not transfer to the substituted claim unless the creditor expressly reserves them.

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When novation substitutes a new debtor, the new debtor cannot raise against the creditor the defenses available against the former debtor, except a nullity challenge in one case.

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If novation is made between a creditor and one solidary debtor, any hypothec attached to the former claim may be reserved only on the property of the co-debtor who takes on the new debt.

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Novation between the creditor and one solidary debtor releases the other co-debtors; novation with the principal debtor releases the sureties.

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A novation agreed to by one solidary creditor cannot be used against the other co-creditors, except for that creditor’s share in the solidary claim.

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A debtor’s naming of someone to pay in his place counts as a delegation of payment only if that person personally obligates himself to the delegatee to make the payment.

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If the delegatee accepts the delegation, the delegatee keeps rights against the delegator unless it is evident the delegatee intends to discharge the delegator.

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The delegate may not raise against the delegatee defenses that could have been raised against the delegator, subject to an exception where nothing was due to the delegatee at the time of delegation.

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1670. The delegate may set up against the delegatee all such defenses as the delegator could have set up against the delegatee. The delegate may not set up compensation, however, for what the delegator owes to the delegatee or for what the

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Obligations end by the causes named in the Code and also by compensation, confusion, release, impossibility of performance, or discharge of the debtor.

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If two people owe each other, their debts are extinguished by compensation up to the smaller debt; compensation cannot be claimed from the State, but the State may claim it.

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Compensation happens by operation of law when certain, liquid, and exigible debts coexist and each debt is for money or an identical kind of fungible property.

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1674. Compensation is effected even though the debts are not payable at the same place, provided allowance is made for the expenses of delivery, if any. 1991, c. 64, a. 1674.

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1675. A period of grace granted for payment of one of the debts does not prevent compensation. 1991, c. 64, a. 1675.

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Compensation applies regardless of the cause of the obligation, but not for claims from intentional harm or debts secured by property exempt from seizure.

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If several debts subject to compensation are owed by the same debtor, the rules for imputation of payment apply.

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A solidary debtor may not use compensation against the creditor for a co-debtor’s debt, except for that co-debtor’s share. A debtor, whether solidary or not, may not use compensation against one solidary creditor for what a co-creditor owes, except for that co-creditor’s share.

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A surety may set up compensation against what the creditor owes to the principal debtor; the principal debtor may not do so against what the creditor owes to the surety.

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A debtor who unconditionally accepts an assignment or hypothec of claims cannot later use compensation against the third person that could have been used against the original creditor.

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Compensation cannot be carried out or waived if that would prejudice a third person’s acquired rights.

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A debtor who could have set up compensation and then paid the debt may not later use any priority or hypothec attached to the claim if that would prejudice third persons.

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1683. Where the qualities of creditor and debtor are united in the same person, confusion is effected, extinguishing the obligation. Nevertheless, in certain cases where confusion ceases to exist, the effects cease also. 1991, c. 64, a.

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1684. Confusion of the qualities of creditor and debtor in the same person avails the sureties. Confusion of the qualities of surety and creditor or of surety and principal debtor does not extinguish the primary obligation. 1991, c. 64, a.

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If the same person becomes both creditor and solidary co-debtor, or both debtor and solidary co-creditor, the obligation ends only for that person’s share.

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A hypothec ends if the hypothecary creditor becomes the owner of the hypothecated property, but it revives if the creditor is evicted for a cause not attributable to the creditor.

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A creditor may release a debtor from an obligation; the release is complete unless the parties stipulate that it is partial.

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Release may be express or tacit, and it may be onerous or gratuitous depending on the nature of the act it comes from.

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If a creditor voluntarily gives the original title of an obligation to the debtor, this is presumed to be a release of the debt unless the debtor has actually paid. The same presumption applies when the title is given to one solidary debtor, in which case the release is presumed for all debtors.

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An express release given to one solidary debtor or one solidary creditor limits the effect of the release to the released person’s share, with special apportionment rules if another co-debtor becomes insolvent.

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A creditor’s express renunciation of a priority or hypothec does not create a presumption that the secured debt is released.

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An express release of one surety also releases the other sureties to the extent of their remedy against the released surety.

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The debtor must prove superior force if relying on it to be released from an obligation.

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A debtor released for impossibility of performance may not demand the creditor’s corresponding performance; if performance was already rendered, restitution is owed.

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1695. Where a prior or hypothecary creditor acquires the property on which he has a claim, as a result of a sale by the creditor or a sale under judicial authority, the debtor is released from his debt to the creditor up to the market

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1696. The creditor is presumed to have acquired the property if it is sold to a person in connivance with or related to the creditor, in particular a spouse, a relative or a person connected by marriage or a civil union up to the second

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A released debtor is entitled to an acquittance from the creditor.

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