If you want to make a purchase on the web, the last step is often to go through miles of legal texts to click on the small box “I have read and I accept the terms and conditions”. It is understandable that few people read these contracts in their entirety, sometimes because of a lack of time, sometimes because of a feeling of powerlessness in the face of stipulations that cannot be negotiated.
It can sometimes seem like some companies are using this power position to include clauses so grotesque that it would allow them to steal from you with impunity. Fortunately, a certain legal concept can help you in this type of situation: the unfair clause.
In order to successfully invoke this concept, 2 essential elements are required that stem from article 1437 of the Civil Code of Québec :a contract of adhesion or consumption and a term deemed unfair.
Definition of membership or consumption contract
In order to qualify as a membership, a contract must meet the definition in article 1379 of the Civil Code of Québec. This means that there must have been a strong party that decided the majority of the content of the document and the other party could not negotiate the essential stipulations. Thus, the terms of an online computer purchase and the purchase of a lottery ticket at the convenience store are, for example, membership contracts.
It is important to note that the vast majority of documents that an individual will sign in his life with companies will be membership contracts, as it is not possible to change the terms of service. However, as soon as there is the possibility for both parties to amend the essential stipulations, this prevents the application of Article 1437. For example, an employment contract where the employee was able to negotiate his or her salary and certain other clauses is not considered a contract of membership. Thus, it is necessary to assess whether the signatory had a say in the so-called important clauses.
Article 1437 also applies to consumer contracts. It should be noted that all consumer contracts are membership contracts, but not all membership contracts are consumer contracts. However, it is interesting to look at this separate concept. The definition of this type of act is found in article 1384 of the Civil Code of Québec and in the Consumer Protection Act.
Although there are slight differences between the common law of the Civil Code of Québec and the Consumer Protection Act, the essence of these definitions is the same: the contract must bind a consumer and a merchant in the course of his business. In this definition, a consumer is a natural person who is not a merchant and who obtains a good or service. Thus, anyone who obtains a good or service on their own account from a business has a very good chance of falling within the definition of the Consumer Protection Act.
The difficulty with the unfair term often lies in the assessment of the unfairness of the term, and not in the type of contract present. We will therefore deepen this facet in the next paragraphs.
Definition of unfair term
In order to recognize the unfairness of a clause, it is necessary to rely on the text of Article 1437 of the Civil Code. This text defines the unfair term as follows:
Any term which excessively and unreasonably disadvantages the consumer or member is unfair, thereby contrary to what is required by good faith; is unfair, in particular, if the term is so far removed from the essential obligations arising from the rules governing the contract that it distorts it.
Thus, the legislator wishes to render inoperative any clause so draconian and unfair that it goes against the very notion of equity. There are endless possibilities of a situation where a contract seems to disproportionately harm the weaker party, but the two categories most affected by these clauses are exonerating clauses and penal clauses.
Exemption clauses
Exoneration clauses are clauses that allow a party to withdraw its liability in certain types of situations. However, this is sometimes deemed exaggerated and abusive by the court. This was the case, for example, when Hydro-Québec attempted to use an exoneration clause to avoid liability for a fire caused by its electrical wires or when a travel agency tried to use a similar clause in order not to reimburse customers who had bought plane tickets to a beach that was devastated by a hurricane.
Penalty clauses
Penalty clauses, on the other hand, refer to clauses that give too abrupt consequences when a party does not fully respect the contract. This may be the case for exorbitant interest rates for late payments, or for aggressive economic penalties when a clause is not respected.
Now that it is possible to identify an unfair term in a contract of adhesion or consumption, the question that remains is what will be the concrete consequences if a judge recognizes your situation.
Impact of the unfair term
If the criteria of the unfair term are met, 3 options are then available to a judge. It may amend the unfair term in order to make it adequate, but this power is more rarely used. Indeed, as a general rule, the judge rather nullifies the so-called unfair term or otherwise it may be that the judge cancels the contract completely if the unfair term was so predominant that it rendered the whole act inadequate.
In conclusion, the unfair term can be very useful when a natural person or a small legal person without negotiating power signs a contract with a third party containing excessive terms.
If you or someone close to you thinks that a company or a natural person has abused its position of force in order to include unfair terms, do not hesitate to contact us to find out your rights. In some cases, class action may be possible.