While I am certain we have all, at some point or another, heard of “secret” agreements between people, such agreements, if they are to be enforced, must follow the rules outlined by the Civil Code of Quebec.
Indeed, such a secret agreement (legally known as a simulation), exists when two or more parties agree to express their true intent, not in an apparent contract, but in a secret one, also called a counter-letter. In fact, between the parties, the counter-letter prevails over whatever other agreements the parties chose to show the general public.
It is therefore useful to ask whether or not a counter-letter must be made in writing or rather, if it can simply be a verbal agreement.
In a number of recent cases, the Courts have decided that a counter-letter, despite its name, does not necessarily have to be made in writing. However, it should be noted that, while a counter-letter may, in theory, be made up of a simple verbal agreement, it will nevertheless be subjected to the applicable rules of evidence that also apply to other verbal contracts. That is to say that it will be more difficult to convince any Court of the existence of such a verbal counter-letter. Consequently, it is usually a much better idea to prepare everything in writing in order to avoid such problems.
That said, the use of counter-letters, in any situation, can often bring about unexpected problems and we therefore recommend that an attorney be consulted before any such decisions are made.
Me Harry Karavitis, Attorney at Law
Alepin Gauthier Avocats Inc.