With winter coming, we will all have to change the summer tires on our vehicles to winter tires. While this may seem trivial, we will have to sign a service contract with a garage. The same applies when we buy a movie ticket or go to the hairdresser. Each of these contracts involves rights and obligations for the contracting parties.

What Is a Contract of Enterprise or for Services?

“A contract of enterprise or for services is a contract by which a person, the contractor or the provider of services, as the case may be, undertakes to carry out physical or intellectual work for another person, the client or to provide a service, for a price which the client binds himself to pay.” Section 2098 of the Civil Code of Québec (C.c.Q.).

Here are other examples of this type of contract: entrusting the roofing of your home to a roofer, enlisting the assistance of a travel agent to plan your next getaway or mandating an accountant to prepare your tax return.

Obligations of the Contractor or Service Provider 

1. Prudence and Diligence

One of the obligations of the contractor and the service provider is to ensure that they perform a task or provide a service in accordance with the contract, and in compliance with the law and the regulations governing their trade. Thus, a contractor who installs a bathroom in your home will not only have to comply with all the laws to which they are subject, but will also have to build the bathroom according to the rules of the trade, i.e., in accordance with the tools, materials and work methods that another contractor would use to install a bathroom.

2. Obligation to Provide Information

The contractor or service provider must provide you with all relevant information regarding the nature, goods and schedule of the work they are undertaking. This information must be sufficiently detailed to allow you to assess the cost of the contract and the scope of the work or services provided.

However, you must collaborate in good faith and provide them with the information that may be useful to them in assessing the scope of the task they are being asked to perform. In addition, the contractor’s or service provider’s obligation to provide information varies according to the client’s knowledge. Therefore, the more knowledgeable you are about the task at hand, the less the contractor’s or service provider’s duty will be to provide information, and you will not necessarily be able to hold it against them.

3. Setting the Price

The contractor or service provider is under no obligation to quote a price for the work or service requested. However, in order to avoid any conflict, it is preferable to agree on a pricing method with the contractor or service provider. In this regard, the C.C.Q. provides three main methods for setting the price.

First, the price can be determined according to the services, materials or work provided. In this case, the contractor or service provider simply mentions the cost of the services, without setting an overall price. For example, you may agree to have an attorney represent you, knowing their hourly rate, but not the exact number of hours they will be required to work throughout the mandate or the total cost.

Second, it is possible to request a price estimate from the contractor or service provider. For example, if you decide to redesign your yard, you can request a full quote from the landscaper. If the landscaper agrees, they will be bound by the agreed-upon budget and will only be able to charge you the estimated amount unless unforeseeable circumstances prevent them from doing so.

Third, you may agree to a lump sum contract with the contractor or service provider. This contract will require the contractor or service provider to meet the agreed price, even in the event of unforeseeable circumstances, which may be advantageous to the client.

Your Rights as a Client

1. Particular Work-related Rights: Ownership and Surety

At the end of the contract, that is, when the work is completed and ready to be used for its intended purpose, you must accept the work. However, when you accept the work, you have the right to accept it with or without reservation.

If you accept to receive the work with reservation, you may withhold a sufficient amount from the price to cover the cost of correcting defects or apparent defects. The reservation must expressly and precisely indicate the specific elements of the work that have apparent defects. It may be made verbally or in writing. However, since a verbal reservation is more difficult to prove, it is preferable to put the reservation in writing.

If you accept the work without reservation, you will have no recourse against the contractor for any defect or apparent defect. Therefore, you must inspect the work carefully before accepting it without reservation. However, you will retain your recourse against the contractor for hidden defects and faults, whether or not you have a reservation.

The C.C.Q. also guarantees you certain other rights if the contract is an immovable work. For one thing, you have the right to check the progress of the work at any time during the construction or renovation of the building. In addition, you must exercise this right in such a way as not to interfere with the progress of the work.

You also have the right of recourse against the contractor, the architect and the engineer for the loss of the work that occurs within five years of the end of the work and caused by a defect in construction, design, execution of the work or a defect in the ground. Loss may be defined as any serious defect that renders the work unfit for its intended purpose. For example, it may involve a soil defect affecting the soundness of the construction.

2. Unilateral Termination

At any time during a contract of enterprise or for services, you may, without having to provide explanations, unilaterally terminate the contract. However, if you decide to unilaterally terminate the contract, you will have to pay the contractor or service provider the expenses and fees they incurred prior to the termination. In addition, you will also be required to compensate the contractor or service provider if they have suffered any damages as a result of your untimely termination.

Conclusion

In this article, we outlined some general principles of law regarding a contract of enterprise or for services. However, the obligations and rights of the parties involved in such contracts vary from one contract to another, since they are subject to a variety of other factors, including usage, the application of other laws and the content of the contract. As such, please do not hesitate to contact us if you have a question regarding a contract of enterprise or for services.