The Civil Code of Québec sets out some special rules for certain types of contract, one of those being the contracts of adhesion.

Thus, when a contract is "of adhesion" within the meaning of the Civil Code of Québec:

  1. In case of doubt, it is always interpreted in favour of the adhering party (article 1432 of the Civil Code of Québec);
  2. An external clause (i.e., a clause referred to in the contract) is null if, at the time of formation of the contract, it was not expressly brought to the attention of the adhering party, unless the other party proves that the adhering party otherwise knew of it (article 1435 of the Civil Code of Québec);
  3. A clause which is illegible or incomprehensible to a reasonable person is null if the adhering party suffers injury therefrom, unless the other party proves that an adequate explanation of the nature and scope of the clause was given to the adhering party (article 1435 of the Civil Code of Québec), and
  4. Any abusive clause is null, or the obligation arising from it may be reduced (article 1437 of the Civil Code of Québec).

These specific rules applicable to contracts of adhesion are of public order, and it is therefore not possible for the parties to derogate from or modify them.

However, for these rules to apply, the contract must first be a contract of adhesion within the meaning of the Civil Code of Québec.

Article 1379 of the Civil Code of Québec defines a contract of adhesion as follows:

"1379. A contract of adhesion is a contract in which the essential stipulations were imposed or drawn up by one of the parties, on his behalf or upon his instructions, and were not negotiable.

Any contract that is not a contract of adhesion is a contract by mutual agreement."

This definition includes two conditions for a contract to be qualified as "of adhesion":

First condition: That its "essential stipulations were imposed or drawn up by one of the parties, on his behalf or upon his instructions", and

Second condition: That such "essential stipulations" "were not negotiable".

It should be noted that these two conditions must be met for a contract to be "of adhesion" under the Civil Code of Québec.

What about a franchise agreement?

Obviously, except in very rare cases, the essential stipulations of a franchise agreement have been drawn up by the franchisor, on its behalf or upon its instructions, thus fulfilling the first of these two conditions.

For this reason, many people believe that all franchise agreements are "contracts of adhesion" within the meaning of the Civil Code of Québec, and therefore that the special rules applicable to this type of agreement always apply to a franchise agreement.

This belief ignores the second of the above conditions, namely that "the essential stipulations" of the contract "were not negotiable".

Certain essential conditions of a franchise agreement (notably those concerning the management of the network as a whole, and those which must be uniform for all franchisees) cannot be negotiated with each franchisee, but others, such as the term, the number and term of renewal options, the protected territory, and the guarantees and sureties required from a franchisee, can very well be, if the franchisor so agrees.

According to Québec case law on contracts of adhesion, in order for a franchise agreement to qualify as a "contract of adhesion", the franchisee invoking this qualification must prove to the court that she/he has attempted to negotiate with the franchisor the essential stipulations of the franchise agreement, and that such negotiation was impossible.

In the absence of such evidence, which is necessary to meet the second condition set out above, under the second paragraph of article 1379 of the Civil Code of Québec, the contract is a contract "by mutual agreement" to which the special rules governing contracts of adhesion do not apply.

Thus, although many franchise agreements are indeed contracts of adhesion within the meaning of the Civil Code of Québec, notably by reason of the franchisor's refusal to negotiate with its new franchisee the essential stipulations of its franchise agreement, not all of them are, and it is possible for a franchisor to avoid such qualification by agreeing to openly negotiate the essential stipulations of its franchise agreement with a new franchisee.

Fasken has all the expertise and the resources necessary to help you defend and assert your rights in the most effective and appropriate manner for you.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.