Q: We often see an English language clause in loan and security documents whenever we are dealing with Québec borrowers and guarantors. When does that clause have to be included in those documents?
A: A typical English language clause may read as follows:
“English Language. It is the express wish of the parties that this Agreement and all related documents, including notices and other communications, be drawn up in the English language only. Il est la volonté expresse des parties que cette convention et tous les documents s’y rattachant, y compris les avis et les autres communications, soient rédigés et signés en anglais seulement.”
This clause is required in certain types of contracts pursuant to Section 55 of the QuébecCharter of the French Language1 (the “Charter”), which provides that “contracts pre-determined by one party, contracts containing printed standard clauses, and the related documents, must be drawn up in French. They may be drawn up in another language as well at the express wish of the parties.” In order to comply with the Charter, if a contract is drawn up in English, an English language clause is inserted in order to confirm that this is the express wish of the parties. The Charter applies to all contracts governed by the laws of Québec, whether the parties are natural or legal persons, and whether, if the parties are legal persons, they are constituted in Québec or elsewhere.
Section 55 of the Charter only applies to contracts of adhesion (“contracts that are pre-determined by one party or that contain printed standard clauses”), defined in the Civil Code of Québec as “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”.2 However, the practice has developed in Québec, despite the narrow scope of Section 55 of the Charter, to include an English language clause in all types of English language contracts, not only in contracts of adhesion. We therefore often see an English language clause in all types of contracts, including in negotiated contracts where one party might invoke an imbalance of power, such as in a lender-borrower relationship, which may lead a judge to conclude that the contract was, in fact, imposed by the more powerful party.
According to case law, failure to comply with Section 55 of the Charter does not necessarily entail the nullity of the contract, as no provision of the Charter provides for nullity in such circumstances, although a unilingual francophone may invoke other causes of nullity, such as a lack of consent.3 However, Section 205 of the Charter does provide that failure to comply with any provisions of the Charter can result in fines of $600 to $6,000 in the case of a natural person, or $1,500 to $20,000 in the case of a legal person (i.e. a corporation), and such fines are doubled for a subsequent offence.4 Therefore, failure to include an English language clause, where appropriate, in order to confirm the intention of the parties, may result in costly consequences for clients.