According to article 1726 of the Civil Code of Québec, a seller has a legal obligation to guarantee that the property he sells does not have latent defects that could hinder its use.
However, some people, such as professional sellers, manufacturers, suppliers or distributors have even stricter obligations when it comes to latent defects. The Civil Code of Québec provides specific rules that they must follow to ensure the quality of the goods they sell.
What are these specific rules? And to whom do they apply?
The presumption of knowledge of the hidden defect by the professional seller
Who is a professional salesperson? This is a person whose main activity is to sell goods or services in a commercial setting. A seller who does not specialize in the sale of a particular property is also considered a professional seller. Whether it is a seller specializing in a particular property or not is not a determining factor to be qualified as a professional seller. This is a person whose main activity is to sell goods or services in a commercial setting.
According to article 1729 of the Civil Code of Québec, a professional seller is presumed to be aware of the presence of a latent defect. To fully understand the strength of the presumption and its effects in favour of the buyer, we must refer to the Civil Code of Québec:
The legal presumption is that which is specially attached by law to certain facts; it exempts from any other proof the person in whose favour it exists.
The one concerning presumed facts is simple and can be repelled by evidence to the contrary; that which concerns reputable facts is absolute and no proof can be opposed to it.
However, the professional seller can rebut this presumption by proving that he could not have suspected the presence of the defect and that even with the reasonable precautions that could be expected of him, he could not have discovered the defect. The Court will therefore have to make a thorough analysis of the internal functioning of the trade or commercial practice, in order to determine whether reasonable precautions were taken by the professional seller to detect the defect.
It is important to point out, however, that the evidence prepared by a non-specialized professional seller requires less persuasion from the court than for a specialized professional seller.
The presumption of the existence of a latent defect for a professional seller at the time of purchase
According to article 1729 of the Civil Code of Québec, the existence of a defect at the time of sale is presumed when the improper functioning of the property or its deterioration occurs prematurely compared to similar property. However, the defect must not be due to misuse of the property by the buyer.
Indeed, this article has a 3-part presumption:
- The existence of the vice;
- The existence of the defect before at the time of sale;
- The existence of the defect caused the malfunction or premature deterioration.
Thus, as the buyer of a property, you do not have to prove the presence of the defect at the time of sale, but only to prove the malfunction of the property or its deterioration that occurred prematurely during its normal life. The presumption in favour of the buyer facilitates its recourse by reducing the elements to be proved, while the professional seller will have to demonstrate misuse to rebut this presumption, which constitutes a reversal of the burden of proof to the advantage of the buyer.
However, if you are the buyer of the property, you have misused the property and a defect results from it, the presumption of the existence of the defect can be rebutted if the seller is able to prove the misuse of the property. Thus, the seller must demonstrate that the malfunction or premature deterioration of the property does not come from a defect specific to the property, but rather from an external cause, such as misuse, improper installation or poor maintenance by the buyer. He must also prove that this fault of the buyer is the real cause of the defect observed.
For example, according to the case Intact Insurance Company v. Claude Joyal Inc. , the dispute is related to the purchase of a combine harvester in new condition at a cost of $303,000. This agricultural machine was purchased from a professional seller. After only 550 hours of use, the machine’s engine caught fire, and completely destroyed it. The plaintiff brought an action against the professional seller, due to the premature deterioration of the combine, which is supposed to have a lifespan much longer than 550 hours. Thus, in this decision, the presumption of the existence of the defect provided for in article 1729 of the Civil Code of Québec contributed to obtaining a judgment in favour of the plaintiff. This presumption favours the chances of success of such an action, especially when the seller fails to demonstrate that the defect, malfunction or premature deterioration results from the misuse of the property.
The Manufacturer, Distributor and Supplier Presumption
According to article 1730 of the Civil Code of Québec, the manufacturer, any person who distributes the property in his name or as his property, and any supplier of the property, including the wholesaler and importer, the distributor and the supplier of a good are also bound by the seller’s warranty. The concept of manufacturer includes any person who has participated in a transformation operation to create the good for the use for which it is intended. All these players are professional sellers within the meaning of the law, but certain clarifications are necessary.
As a buyer, you can sue a manufacturer, for example because of a hidden defect that results in particular from a manufacturing defect. This is the case in the case Aireau Qualité Contrôle Inc. c. Recyc RPM Inc., where the manufacturer had installed a ventilation system at the buyer’s premises, but the latter was unable to provide sufficient ventilation to the buyer’s plastic recycling facility. Since the problem was too difficult to fix, resolving the sale was the ideal solution.
The distributor referred to in article 1730 of the Civil Code of Québec is the distributor who uses his own brand on the product. He must have the objective of buying a significant quantity of goods and then distributing them on the market, with the intention of developing his customer base and seeing his sales increase.
The supplier referred to in article 1730 of the Civil Code of Québec by the presumptions refers to wholesalers, retailers or importers of the property.
In addition, the professional seller and the manufacturer are jointly and severally liable, in addition to the restitution of the price, for reparation for the damage suffered by the buyer. Thus, as a buyer, you can demand to be compensated by the professional seller or the manufacturer, at your choice, since they are jointly and severally liable.
This principle is exemplified in Manac Inc./Nortex v. Boiler Inspection and Insurance Company of Canada. In this case, a slaughterhouse was ravaged by fire. The fire spread extremely quickly because of wall panels called Arcoplast, which had proven to be highly flammable. These panels were manufactured by one company and then sold and installed by another company. However, the two companies claimed, wrongly, that the panels were non-combustible. As professional sellers, both of these companies were presumed to be aware of the product’s defects. The Court ruled that they were both liable for the damage caused and that they should jointly and severally compensate the victims. Thus, the buyer could claim the entire damages from either company.
The rules surrounding latent defects are already complex, but when it comes to a professional seller, manufacturer or distributor, the law provides for even stricter obligations in favor of the buyer. Thanks to the legal presumptions provided for in the Civil Code of Québec, your recourses are facilitated and your chances of obtaining compensation are increased.
If you believe you are the victim of a latent defect, contact our team specializing in latent defect litigation today to protect your rights and obtain the compensation to which you are entitled.