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Economic dependence - error of assessment - lesion/exploitation in contractual relations

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Business law, Civil and commercial litigation

When talking about free and informed consent in Quebec, one must be careful not to confuse this concept with the notion of complete freedom to act as one might want.

Indeed, it is not because we are sometimes at a contractual disadvantage and may feel forced to sign a contract that we can automatically invoke a defect of consent.

The Limits of Defect of Consent

This can namely be seen when two parties enter into an agreement where one party may feel compelled to sign because of its state of poverty. For example, a home-owner that cannot make his monthly mortgage payments may seek out additional financing at a higher interest rate than that given by the chartered banks. Although the secondary lender is in fact taking advantage of the financial state of the borrower to charge more interest, this is not proof of a lack of valid consent per se.

The concept stated above also confirms section 1405 of the Civil Code which provides that Lesion (exploitation) makes consent to a contract ineffective only with respect to minors, or to person of full age but who are under protective supervision.

Harry Karavitis, Attorney-at-Law
Alepin Gauthier Avocats inc.

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