Civil Code of Québec, 1991

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If a promise to lend is not performed, the beneficiary may only claim damages from the promisor.

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The borrower must act with prudence and diligence when keeping and preserving the loaned property.

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The borrower must not use the loaned property for any purpose other than the one intended, and must not let a third person use it without the lender’s authorization.

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The lender may claim the property early in certain cases.

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The borrower may be reimbursed for necessary and urgent expenses made to preserve the property, but must bear expenses incurred in using the property.

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If the lender knew the property had latent defects and did not tell the borrower, the lender must make reparation for the borrower’s resulting injury.

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A borrower is not liable for loss of loaned property caused by the intended use, but may be liable if the property is used for a different purpose or kept longer than agreed, even if the loss is caused by superior force, unless that force would have caused the loss anyway.

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A borrower is liable for loss of loaned property if it perishes by superior force and the borrower could have saved it using his own property, or chose to save his own property when both could not be saved.

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A borrower may not retain the property for the lender’s debt, unless the debt is an urgent and necessary expense for preserving the property.

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2325. An action for damages for injury caused by the fault of a third person to the property loaned may be taken by the lender or the borrower, whichever is the more diligent. 1991, c. 64, a. 2325; I.N. 2015-11-01.

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If several persons borrow the same property together, they are solidarily liable to the lender.

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In a simple loan, the borrower becomes the owner of the property loaned and bears the risk of loss once it is handed over.

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The lender is liable for injury caused by defects in the property loaned.

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A borrower must return the same quantity and quality of property received, regardless of price changes; for a money loan, the borrower must return only the nominal amount received.

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2330. The loan of a sum of money bears interest from the date the money is handed over to the borrower. 1991, c. 64, a. 2330.

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Paying off the principal of a money loan also discharges the interest.

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2332. In the case of a loan of a sum of money, the court may pronounce the nullity of the contract, order the reduction of the obligations arising from the contract or revise the terms and conditions of the performance of the obligations

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Suretyship is a contract where the surety promises the creditor to perform the debtor’s obligation if the debtor does not fulfill it.

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2334. Suretyship may result from an agreement, or may be imposed by law or ordered by judgment. 1991, c. 64, a. 2334.

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2335. Suretyship is not presumed; it is effected only if it is express. 1991, c. 64, a. 2335.

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A person may act as surety for an obligation, even without the other person’s order or knowledge.

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A debtor who must provide a surety has to offer one with sufficient property in Québec, a domicile in Canada, and, if that is not met, provide another surety.

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A debtor required to provide a legal or judicial surety may instead offer other sufficient security.

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The court decides disputes about whether a surety’s property or offered security is sufficient.

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Suretyship may be contracted only for a valid obligation.

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A suretyship must not exceed the debtor’s debt or be on more onerous terms.

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Suretyship may cover only part of the principal obligation, and it may be made on less onerous conditions.

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Suretyship must not be extended beyond the limits for which it was contracted.

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Suretyship covers the principal obligation’s accessories, including certain costs.

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If the surety asks, the creditor must provide useful information about the principal obligation and how far performance has progressed.

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A surety must perform the debtor’s obligation if the debtor fails to perform it.

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2347. A conventional or legal surety enjoys the benefit of discussion unless he renounces it expressly. A person who is surety of a judicial surety may not demand the discussion of the principal debtor nor of the surety. 1991, c. 64, a.

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A surety using the benefit of discussion must raise it in the action, tell the creditor which property of the principal debtor can be seized, and pay the sums needed for discussion costs.

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If several people become sureties for the same debtor and debt, each is liable for the whole debt unless he expressly renounced the benefit of division in advance.

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A surety is proportionately liable for insolvency that existed when the division was obtained, but not for insolvencies occurring after the division.

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A creditor who voluntarily divides an action may not later challenge that division, even if some sureties were already insolvent.

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If a surety binds himself with the principal debtor as a solidary surety or solidary co-debtor, he cannot invoke the benefits of discussion and division.

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A surety may raise the principal debtor’s defences against the creditor, except defences that are purely personal to the principal debtor or excluded by the surety’s undertaking.

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A surety is not released just because the creditor extends the principal debtor’s term; forfeiture of the term by the principal debtor also affects the surety.

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A surety cannot waive in advance the right to information or subrogation benefits.

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A surety may recover specified amounts from the debtor, with different recovery rules depending on whether the debtor consented.

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If a principal debtor is discharged because of incapacity, the surety may seek reimbursement from the debtor to the extent the debtor kept an enrichment.

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A surety who paid a debt generally has no remedy against a principal debtor who later paid it, or who had certain defences when the surety paid without informing the debtor; the surety still keeps a recovery action against the creditor.

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A surety may sue the debtor before paying in specified cases.

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If several people are sureties for the same debt, a surety who pays may claim contribution from the others, subject to a condition on when payment was made.

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If the surety dies, the suretyship ends, despite any contrary stipulation.

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A surety may end a suretyship for future or indeterminate debts, or for an indeterminate period, after three years if the debt is not yet due and prior notice is given to the debtor, the creditor, and the other sureties.

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A suretyship tied to special duties ends when those duties stop.

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When the suretyship ends, the surety remains liable for debts that already existed, even if those debts are conditional or subject to a term.

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If the creditor’s act or omission prevents the surety from being usefully subrogated to the creditor’s rights, the surety is discharged to the extent of the resulting injury.

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If a creditor voluntarily accepts property as payment of the principal debt, the surety is discharged, even if the creditor is later evicted.

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An annuity contract is one where the debtor agrees to make periodic payments to the annuitant for a certain time.

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A contract is called alienation for rent when the debtor undertakes to pay an annuity in exchange for transfer of ownership of an immovable for the debtor’s benefit.

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An annuity may be created for the benefit of someone other than the person who provides the capital.

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An annuity may be created by contract, will, judgment, or law.

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An annuity may be a life annuity or a fixed term annuity.

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A life annuity may be set up for the lifetime of specified persons, and it may also be agreed that payments continue after that person’s death for a determinate person or the annuitant’s heirs.

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A life annuity for someone who is already dead, dies within 30 days, or does not yet exist when payments are to start is without effect, unless the unborn person was conceived then and is later born alive and viable.

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2374. Where a life annuity is set up for the lifetime of several persons successively, it has effect only if the first of those persons exists on the day the debtor is to begin paying the annuity or if he is conceived at that time and is

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A non-returnable loan is presumed to be a life annuity for the lender’s benefit and for the lender’s lifetime.

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The payment period for any annuity is capped at 100 years after it is constituted, even if the contract says longer or makes it successive.

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A stipulation can make an annuity unseizable and inalienable only when the annuitant receives it for free, and then only for the amount needed for the annuitant’s support.

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Capital set aside to pay an annuity is generally exempt from seizure, with a limited exception for the amount needed to fund the annuity.

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2379. The designation or revocation of an annuitant, other than the person who furnished the capital of the annuity, is governed by the rules that apply to stipulations for another. However, the designation or revocation of an annuitant,

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A stipulation may provide that a joint life annuity continues after one annuitant dies for the survivors' lifetimes; a spouses' life annuity is presumed to continue for the surviving spouse.

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A life annuity is payable only in proportion to the days the measured person lived, and the annuitant may demand payment only after proving that person exists.

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Payments are due at the end of each payment period, and each period may not be longer than one year.

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The debtor cannot avoid paying the annuity by offering to repay its capital value and waiving recovery of annuity payments already made.

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An annuity debtor may appoint an authorized insurer in place of the debtor by paying the annuity value; the owner of secured immovable property may also substitute insurer-backed security. The annuitant cannot object, but may require another insurer or contest the capital value or annuity value.

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The substitution releases the debtor or the owner of the immovable charged as security for the annuity when the required capital is paid.

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Non-payment of an annuity does not let the annuitant demand return of the capital, but it does allow collection measures and, in some cases, payment of the capital.

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An annuitant generally cannot insist that a judicial sale be subject to the annuity, but if the annuitant’s hypothec ranks first, the annuitant may require the creditor to provide sufficient surety.

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2388. The capital value of an annuity is always assessed as equal to the amount that would be sufficient to acquire an annuity of equivalent value from an authorized insurer. 1991, c. 64, a. 2388; I.N. 2014-05-01.

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An insurance contract is one where the insurer promises to pay the client or a third person if a covered risk occurs.

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Marine insurance is intended to indemnify the insured for losses arising from a marine adventure.

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2391. Non-marine insurance is divided into insurance of persons and damage insurance. 1991, c. 64, a. 2391.

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This section defines insurance of persons as coverage for the insured’s life, physical integrity, or health, and says it is divided into individual insurance and group insurance.

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Life insurance guarantees payment of the agreed amount when the insured dies, and it may also pay the agreed amount during the insured’s lifetime in specified circumstances.

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2394. Clauses of accident or sickness insurance which are accessory to a contract of life insurance and clauses of life insurance which are accessory to a contract of accident or sickness insurance are governed by the rules governing the

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2395. Damage insurance protects the insured against the consequences of an event that may adversely affect his patrimony. 1991, c. 64, a. 2395; I.N. 2014-05-01.

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Damage insurance includes property insurance and liability insurance.

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A reinsurance contract is effective only between the insurer and the reinsurer.

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2398. A contract of insurance is formed upon acceptance by the insurer of the application of the client. 1991, c. 64, a. 2398.

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A policy is the document that proves an insurance contract exists.

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In non-marine insurance, the insurer must give the client the policy and a copy of any written application made by or for the client.

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In group insurance, the insurer must issue the policy to the client and deliver the insurance certificates to the client, who must distribute them to the participants.

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2402. In non-marine insurance, any general clause whereby the insurer is released from his obligations if the law is violated is deemed not written, unless the violation is an indictable offence. Any clause of a policy whereby the insured

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An insurer may not rely on conditions or representations that are not written into the contract, except as affected by special marine insurance provisions.

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In insurance of persons, an insurer may rely only on exclusions or clauses reducing coverage if they are clearly shown under an appropriate heading.

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In non-marine insurance, contract changes are evidenced by riders, but a rider reducing the insurer’s liability or increasing the insured’s obligations (other than a higher premium) has no effect unless the policyholder gives written consent.

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A participant’s representations in group insurance can be used against the participant only if the insurer has provided a copy of them.

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A member is entitled to a copy of the current articles of association.

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The client must disclose facts known to them that could materially affect an insurer’s premium, risk appraisal, or decision to insure; the insured must do the same if the insurer requires it.

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An obligation about representations is treated as properly met if a normally provident insured would make them, without material concealment, and if the facts are substantially as represented.

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Misrepresentation or concealment of facts by the client or insured can nullify the contract at the insurer’s instance, subject to the rules on statement of age and risk.

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In damage insurance, the insurer remains liable to the insured for a proportional part of the indemnity unless the client acted in bad faith or the insurer would not have covered the risk if it had known the facts.

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A warranty breach that aggravates the risk suspends coverage.

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If the insurer’s representative or an insurance broker entered or suggested the application representations, testimony may be used to show they do not match what was actually said.

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Certain clauses in non-marine insurance contracts are null if they give specified insured persons fewer rights than the chapter provides.

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2415. In addition to the particulars prescribed for policies generally, a policy of insurance of persons shall indicate, where applicable, the name of the insured or a means to identify him, the time limits for payment of premiums, any

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An insurer must clearly disclose the coverage in an accident or sickness policy, and if disability coverage is included, also the payment terms and the nature and extent of the disability covered.

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In accident or sickness insurance, an insurer may not exclude or reduce coverage for a disease or ailment disclosed in the application, unless there is fraud or the policy specifically names the disease or ailment. An insurer may not use a general clause to exclude or limit coverage for an undisclosed disease or ailment, except in cases of fraud or if the disease or ailment appears within the first two years of the insurance.

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An individual insurance contract is null if the client lacks an insurable interest in the insured’s life or health when the contract is made, unless the insured consents in writing.

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2419. A person has an insurable interest in his own life and health and in the life and health of his spouse, of his descendants and the descendants of his spouse, or of persons who contribute to his support or education. He also has an

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Misstating the insured’s age does not void the insurance; the insured sum is adjusted proportionately, and in accident or sickness insurance the insurer may instead adjust the premium to match the true age.

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In life insurance, the insurer may apply to have a contract annulled if the insured’s age was above the insurer’s rate limits when the contract was formed.

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2422. In accident or sickness insurance, the true age is the determining factor in cases where the commencement or termination of the insurance depends on the age of the insured. In life insurance, the true age is also the determining

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In group insurance, a participant’s misrepresentation or concealment about age or risk affects only the insurance of the persons concerned.

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Fraud, misrepresentation, or concealment as to risk does not justify annulling or reducing insurance that has been in force for two years.

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2425. Life insurance takes effect when the application is accepted by the insurer, provided that it is accepted without modification, that the initial premium has been paid, and that there has been no change in the insurability of the risk

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Accident or sickness insurance takes effect when the policy is delivered to the client.

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In life insurance, the policyholder gets 30 days to pay each premium, except the initial premium.

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2428. When payment is made by bill of exchange, it is deemed made only if the bill is honoured when first presented. The payment is also deemed made when the bill is not honoured by reason of the death of the person who issued the bill of

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A premium generally does not earn interest during the payment period, except in group insurance. If an insurer is entitled to interest on a premium due, the rate cannot exceed the rate set by government regulations.

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An in-force accident or sickness insurance contract cannot be cancelled for non-payment of premium unless the debtor is given 15 days’ prior written notice.

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If an individual life insurance policy was cancelled for non-payment, the insurer must reinstate it when the policyholder applies within two years and the insured still meets the policy conditions; the policyholder must then pay overdue premiums and repay advances with interest.

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2432. Any amount payable for the reinstatement of a contract may be made out of advances receivable on the policy up to the sum stipulated in the contract. 1991, c. 64, a. 2432.

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The insurer may require overdue premiums to be paid when settling certain group life, accident, or sickness insurance claims, and may deduct overdue premiums from benefits payable under an individual insurance contract.

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When an insurance contract is reinstated, the two-year period runs again.

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The policy holder, beneficiary, or insured must give the insurer written notice of loss within 30 days of learning of it, and must send the insurer the information it may reasonably expect within 90 days.

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The insurer must pay insured sums and contract benefits within 30 days after receiving required proof of loss.

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If disability income insurance has a waiting period, the first indemnity is payable 30 days after that waiting period ends.

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The insured must submit to a medical examination when the insurer is entitled to require one because of the nature of the disability.

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In accident or sickness insurance, the insurer may lower the indemnity after an occupational-risk increase lasting at least six months, and must adjust the premium or extend coverage after notice if the occupational risk decreases.

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The beneficiary’s heirs may require the insurer to pay any instalment sums as one lump sum.

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2441. The insurer may not refuse payment of the sums insured by reason of the suicide of the insured unless he expressly stipulated that coverage would be excluded in such a case and, even then, the stipulation is without effect if the

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Section 2441.1 is repealed.

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A funeral-expenses insurance contract of the kind described here is null.

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If the policyholder attempts to take the insured’s life, the insurance is cancelled and the surrender value must be paid. If someone else does so, only that person’s right to coverage is forfeited.

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Benefits established for a mutual benefit association member, and for the member’s married or civil union spouse, ascendants, or descendants, cannot be seized for debts of either the member or the beneficiaries.

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The sum insured may be payable to the policyholder, participant, or a specified beneficiary; in individual insurance, the holder of a policy on a third person may name subrogated policyholders; a life insurance policy may not be payable to bearer.

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2446. The designation of beneficiaries or of subrogated policyholders is made in the policy or in another writing which may or may not be in the form of a will. 1991, c. 64, a. 2446.

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A beneficiary or subrogated policyholder does not have to exist or be fully identified at designation, but the designation is treated as conditional on later existence.

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This section sets survivorship rules for insurance when the insured, beneficiary, or policyholders die in unclear sequence.

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A beneficiary designation can be irrevocable or revocable depending on who is named and what writing governs it.

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2450. A designation or revocation contained in a will that is null by reason of a defect of form is not null for that sole reason; such a designation or revocation is null, however, if the will is revoked. A designation or revocation made

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A beneficiary designation stays revocable until the insurer receives it.

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Designations and revocations are effective against the insurer only when received, and the insurer is discharged by good-faith payment under these rules to the last known person entitled.

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Beneficiaries and subrogated policyholders are creditors of the insurer, and the insurer may assert against them the same nullity or forfeiture grounds that could be invoked against the policyholder or participant.

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The policyholder is entitled to policy dividends and other contract benefits even if a beneficiary was designated irrevocably.

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2455. Sums insured payable to a beneficiary do not form part of the succession of the insured. Similarly, a contract transferred to a subrogated policyholder does not form part of the succession of the preceding policyholder. 1991, c. 64,

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Insurance payable to a succession, or to named estate-related recipients in a stipulation, is part of that person’s succession.

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If the designated beneficiary is the policyholder’s or participant’s spouse, descendant, or ascendant, the contract rights are exempt from seizure until the beneficiary receives the insurance money.

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A stipulation of irrevocability binds the policyholder, even if the designated beneficiary does not know about it. While the designation remains irrevocable, the contract rights of the policyholder, participant, and beneficiary are exempt from seizure.

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Separation from bed and board does not change a spouse’s rights, but a court may declare the spouse’s beneficiary or subrogated policyholder designation revocable or lapsed when granting a separation.

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The policyholder and participant may dispose of their rights, but only subject to the beneficiary’s rights.

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An insurance assignment or hypothec cannot be asserted against the insurer, the beneficiary, or third persons until the insurer is notified.

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Insurance assignment transfers the assignor’s rights and obligations to the assignee.

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In damage insurance, the insurer must make reparation for the injury suffered at the time of the loss, but only up to the coverage amount.

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The insurer must make reparation for injury caused by superior force or the insured’s fault, unless the contract expressly and restrictively excludes it.

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The insurer is not bound to indemnify for certain property losses caused by an inherent defect or by the nature of the property.

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The insured must promptly tell the insurer about certain risk-increasing circumstances within the insured’s control.

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If the insurer is notified of new circumstances, it may cancel the contract or offer a written premium increase; the insured must accept and pay the new premium within 30 days, or the policy ends.

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Short absences from a residence, and limited maintenance/repair visits by tradesmen, do not count as a change that increases risk in the stated circumstances.

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The insurer is entitled to the premium only when the risk begins, and only for as long as the risk continues if it later disappears completely because of an uncovered event.

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The insured must notify the insurer of a covered loss as soon as the insured becomes aware of it.

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At the insurer’s request, the insured must promptly report all circumstances of the loss, provide vouchers, and swear the information is true.

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A deceitful representation causes the person who made it to lose the right to indemnity for the related risk.

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The insurer must pay the indemnity within 60 days after receiving the notice of loss, or after receiving the requested information and vouchers.

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The insurer is subrogated to the insured’s rights against the person who caused the injury, but only up to the amount paid in indemnity, and not against members of the insured’s household.

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