Contrat de cautionnement (Québec)

A Quebec suretyship agreement (contrat de cautionnement) is a legally binding contract governed by articles 2333 to 2366 of the Civil Code of Quebec (C.c.Q.) whereby a person, known as the caution (surety), undertakes toward a creditor to fulfill the obligation of a principal debtor if the debtor fails to perform. Suretyship is one of the oldest forms of personal security in civil law and plays a critical role in commercial and personal lending transactions throughout Quebec. Under article 2335 C.c.Q., suretyship is never presumed and must arise from an express agreement between the surety and the creditor. The obligation of the surety is always accessory in nature, meaning it depends entirely on the existence and validity of the principal obligation it guarantees. Article 2341 C.c.Q. stipulates that the suretyship may not exceed what is owed by the principal debtor, nor may it be contracted under more onerous conditions. If the suretyship exceeds the principal obligation, it is not void but is simply reducible to the measure of the principal obligation. Quebec law distinguishes between two types of suretyship: simple suretyship and solidary suretyship. In a simple suretyship, the surety retains the benefit of discussion under article 2347 C.c.Q., meaning the creditor must first pursue the principal debtor before turning to the surety. In a solidary suretyship under article 2352 C.c.Q., the surety waives this benefit and may be pursued directly by the creditor. This distinction has significant practical consequences for all parties involved and must be carefully considered when drafting the agreement.

A Quebec suretyship agreement is needed in a wide variety of commercial and personal situations where a creditor requires additional security for an obligation. The most common scenario involves commercial lending, where a bank or financial institution requires a personal guarantee from the directors or shareholders of a borrowing corporation. Landlords frequently require suretyship agreements from third parties when leasing commercial premises to newly formed companies or tenants with limited credit history. In the construction industry, performance bonds and payment bonds often take the form of suretyship agreements. Parents or family members may provide suretyship for student loans, vehicle financing, or residential leases on behalf of younger family members who lack established credit. Business partners may guarantee each other's obligations in joint ventures or partnership arrangements. Suppliers may require suretyship before extending trade credit to new business customers. The agreement is also commonly used in franchise arrangements where the franchisor requires the franchisee's principals to personally guarantee the franchise obligations. In all cases, the surety should carefully consider the scope and duration of the commitment, as a suretyship agreement creates a serious legal obligation that can result in significant financial liability.

The key elements of a Quebec suretyship agreement include several essential components mandated by the Civil Code of Quebec. First, the complete identification of all three parties is required: the caution (surety), the créancier (creditor), and the débiteur principal (principal debtor), including their full legal names, addresses, and contact information. Second, a precise description of the guaranteed obligation must be provided, clearly identifying the underlying debt or obligation that the surety is guaranteeing. Third, the maximum amount guaranteed must be specified, as art. 2341 C.c.Q. limits the suretyship to the amount of the principal obligation. Fourth, the type of suretyship must be clearly stated as either simple (allowing the benefit of discussion under art. 2347) or solidary (waiving the benefit under art. 2352). Fifth, the duration of the suretyship must be defined, whether for a fixed term or indefinitely, with art. 2362 permitting termination of indefinite suretyship upon reasonable notice. Sixth, conditions for the release of the surety must be outlined, including the circumstances under which the surety's obligation is extinguished. Seventh, the surety's right of subrogation under art. 2356 C.c.Q. must be addressed, specifying that the surety who pays is subrogated to the creditor's rights. Eighth, notice of default provisions must be included to ensure the surety is promptly informed of the debtor's failure to perform. Ninth, a good faith clause pursuant to article 1375 C.c.Q. must be included. Finally, the governing law clause must reference the applicable provisions of the Code civil du Québec.