For the professional seller or manufacturer wishing to do business in Québec, it is vital to be aware of the legal particularities that apply in the province. Important distinctions exist, notably between non-professional sellers, professional sellers and manufacturers, and are essential to identify in order to understand the notions of latent defect, legal warranty, presumption of knowledge, and the value of limitation liability clauses.
Non-Professional Sellers, Professional Sellers and Manufacturers
With regard to latent defects, the status of a professional seller or a manufacturer plays an important role in determining presumed knowledge of defects in a property offered for sale.1 The Civil Code of Québec has established three categories of sellers, according to their level of expertise:
- Non-professional seller: a natural person who occasionally sells property, often as part of transactions between private inpiduals. Take, for example, the case of an inpidual who decides to sell their car.
- Professional seller and manufacturer: these are engaged in the regular commercial activity of selling property or services. The a company, a merchant or even a distributor, as long as the sale of property takes place in the course of their professional activities.
The legal system varies according to the type of seller (non-professional seller or professional seller/manufacturer). The difference between the two depends mainly on the context of sales activities.
What Do the Courts Have to Say?
The courts have repeatedly ruled on the qualification of the seller; for example, the Court of Appeal recognized that a banking institution operating in the financial services sector was not considered a professional seller in the context of a sale of real estate: the bank's profession was not to sell real estate, as the sale was merely incidental to the realization of the guarantees given on the loans it granted.2
More recently, the Superior Court considered the qualifications of a contractor experienced in major renovations who had resold a building. It concluded that knowledge of real estate matters was not sufficient to qualify the entrepreneur as a professional seller, particularly when considering that the sale of real estate had never been his principal occupation or a significant source of income.[3]
Why Is This Categorization Necessary?
The purpose of this categorization is to ensure the applicability of the presumption of knowledge on the part of the seller. This is an important distinction, particularly with regard to liability for properties sold.
The non-professional seller, as a natural person, is generally required to correctly describe the condition of the property they are selling, although the scope of their responsibility is not as great as that of the professional seller due to their special status.
On the other hand, the liability of the professional seller or manufacturer is subject to stricter sales standards and obligations. They will be required to comply with all applicable laws and regulations, in particular with regard to the quality of the properties sold and certain guarantees. To this end, certain legal warranties and presumptions have been established in our law, emphasizing the importance of the professional seller's responsibility.
Would you like to learn more about presumptions, latent defects and legal warranties? Read our article by clicking here.
Footnotes
1. ABB Inc. v. Domtar Inc., 2007 SCC 50 (CanLII), para. 39. /small>
2.Roussel c. Caisse Desjardins de Sainte-Foy, 2004 CanLII 39113 (QC CA), para. 18.
3.Brien c. Limoges, 2023 QCCS 4416 (CanLII), para. 34.
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.
