27 May 2022
How Will the Controversial Bill 96 Affect Lenders and Borrowers?
Bill 96 reforming the Charter of the French language aims to modify several Quebec laws. The goal of this article is to highlight the specific impact of Bill 96 on lenders and borrowers when setting up financing agreements if Bill 96 comes into force in its current state:
- Article 55 Charter of the French Language: Contracts pre-determined by one party and the related documents, must be drawn up in French. To determine whether an agreement constitutes a contract of adhesion and therefore must comply with this requirement, a factual analysis is required. Precisely, the contract of adhesion qualification is based on a factual assessment of the absence of negotiation with respect to the essential stipulations. For example, it must be determined whether the essential terms of a loan such as the amount, the interest rate, and the terms of repayment thereof are negotiated between the parties.
From now on, it will be insufficient to add a clause to the effect that the parties wish to contract in English in an agreement that constitutes a contract of adhesion. The parties may only agree to draw up such a contract in English, if such is their wish, after having read the French version. The consequences of non-compliance with this article are the nullity of the agreement in question, without the plaintiff needing to prove any prejudice. Criminal penalties may also be applicable.
- Article 55.1 Charter of the French Language: The contracts for the sale of a mainly residential building of less than five dwellings, the contract for the sale of a co-ownership fraction of a mainly residential building, the promise to conclude a sale contract of a mainly residential building of less than five dwellings and the contract for the sale of a residential building must be written in French.
However, unlike the documents referred to in Article 55 of the Charter of the French language, the parties may choose to contract exclusively in English, if such is their wish, simply by expressly mentioning it in the contract. It is important to note that this article concerns certain contracts related to the sale of residential buildings, therefore transactions involving the sale of commercial buildings will not be targeted.
- Article 57 Charter of the French Language: Invoices, receipts, quittances, and other similar documents must be drawn up in French. These documents may however be written in English if a French version is accessible under similar conditions to the English version, even if these documents are linked to a contract in English which respects the conditions of Article 55 Charter of the French language.
- Article 21 Charter of the French Language: Contracts concluded with the government, or its agencies must be written exclusively in French, regardless of whether the contracting party is a Quebec of foreign company. However, loan contracts with the government or its agencies may be drawn up in both French and English. It is therefore assumed that it would be prohibited to draft a loan agreement with the government solely in English.
- Article 91 Charter of the French Language: When the drafting of a document is permitted in both French and English, as is the case with loan contract with the government under Article 21 Charter of the French language, French must at least be shown as evidently and be complete without having to refer to the English version.
- Article 26 Consumer Protection Act: Contracts relating to goods and services and the related documents must be drawn up in French. It will therefore now be insufficient to add a clause to the effect that the parties wish to contract in English. The parties can only agree to draft the contract in English, if such is their wish, after having read the French version of the contract in question.
- Article 1060 Civil Code of Quebec: The declaration of co-ownership as well as its amendments must be presented exclusively in French to the Land Registry Office.
- Article 2984 Civil Code of Quebec: Applications for registration in the land register and in the register of personal and movable real rights (RDPRM) must be written exclusively in French.
- Article 3006 Civil Code of Quebec: The documents accompanying the applications for registration must be translated into French if they are written in a language other than French.
Considering the adoption of Bill 96 by the Assembly of Quebec on May 24th, 2022, it is important for us to quickly make lenders and borrowers aware of the changes with which they will have to comply as of Royal Assent.
If you would like to learn more about Bill 96 and the potential impacts on your business, do not hesitate to contact a member of our financing department.
[This article has been updated to take into account the amendments to Bill 96 adopted during the meeting of February 17, 2022.]
 Lefebvre, B. (2003). Le contrat d’adhésion. La revue du notariat, volume 105, p. 453 à 455.
 Westboro mortgage investment limited partnership c. 9080-9013 Quebec Inc. et al., 2018 QCCS 1 au para 50.