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Enterprise

“Enterprise” appears in three contexts in the Civil Code of Québec (“CCQ”): (1) in the regime governing the solidarity of obligations; (2) in the regime governing the nominate contract of enterprise, also called the contract for services; and (3) in connection with procedural requirements involving the enterprise registrar. It is important not to confound the “contract for the carrying out of an enterprise” that applies in sense (1) with the “contract of enterprise”, defined separately in relation to sense (2) as a nominate class of contracts. Similarly, “enterprise register” and “enterprise registrar” in sense (3) refer to entities defined in An Act Respecting the Legal Publicity of Enterprises,[1] and this sense is unrelated to the other two senses of “enterprise”..

     (1) The regime of the CCQ governing solidarity of obligations defines an enterprise as any economic activity that involves the provision of a service or the production, administration or alienation of property.[2] An enterprise may consist of one or more persons and need not be commercial in nature.[3] In general, the CCQ’s usage of “enterprise” outside the regime of solidarity conforms to this definition. In slightly extended usage, “enterprise” may appear elsewhere in the CCQ to mean the apparatus of the economic activity[4] or the persons or entities engaged in the economic activity.[5] The technical significance of “enterprise” in the regime of solidarity is outlined below.

     “Enterprise” in the CCQ regime of solidarity relates to the cause[6] for which a person may take on an obligation or agree to a contract; obligations contracted for other (that is, non-enterprise) reasons are sometimes called civil obligations.[7] In regime under the CCQ, “enterprise” usually occurs in the phrase “obligations contracted for the carrying out of an enterprise”. In practice, however, “enterprise” is more likely to affect entire contracts rather than single obligations.[8] It is therefore more convenient to speak of contracts for the carrying out of an enterprise.

     Solidarity is presumed between the debtors of contractual obligations that are incurred in relation to the carrying on of an enterprise.[9] This means that the creditor of such obligations will, in most cases,[10] have the right to demand full performance by any one of the debtors.[11] It is important to note that this is normally not the case. Debts arising in non-enterprise (that is, civil) contracts are not presumed to be solidary.[12] This discrepancy gives rise to a grey area for contracts that, while not directly for the carrying out of an enterprise, are nevertheless accessory to the carrying out of one.[13] Although there is reason to suggest that such accessory contracts give rise to the presumption of solidarity, the authorities are somewhat divided on the matter.[14]

     (2) The CCQ regime of nominate contracts defines the “enterprise contract” or “contract of enterprise” as a contract between a contractor and a client by which the former promises the latter performance of physical or intellectual work in exchange for payment without creating a relationship of subordination.[15] The lack of subordination is the distinguishing feature of the contract of enterprise.[16] Whereas the employee in a contract of employment is subject to the employer’s direction and control (including specific instructions pertaining to the performance of the contract[17]), the contractor in a contract of enterprise retains control over the means of performing the contract.[18] For example, the contractor is generally free to hire a subcontractor to carry out the contract.[19] However, the contractor’s general freedom does not preclude the client from providing general instructions to the contractor, or from demanding inspection and supervision over the contractor to ensure proper performance.[20]

     (3) “Enterprise register” and “enterprise registrar” are terms defined in An Act Respecting the Legal Publicity of Enterprises with effect in the CCQ. For example, declarations of partnership can be set up against third parties from the date they are recorded in the enterprise register.[21] The enterprise register, then, is the official collection of registration documents for entities such as partnerships, sole proprietorships, and legal persons established for private interests.[22] The enterprise registrar is an appointed public officer charged with the management of the enterprise register.[23]

[1]An Act Respecting the Legal Publicity of Enterprises, RSQ c P-44.1.
[2]Art 1525(3) CCQ.
[3]Art 1525(3) CCQ.
[4]See e.g. art 427(2) CCQ.
[5]See e.g. art 746 CCQ.
[6]In the sense of the subjective, rather than objective, reason for taking on an obligation. F Allard et al, eds, Private Law Dictionary of Obligations and Bilingual Lexicons, (Cowansville, Que: Yvon Blais, forthcoming) sub verb “cause[1]”.
[7]The explicit distinction between enterprise and civil obligations of the C.C.L.C. did not survive into the CCQ. However, the notion of civil obligations continues to serve as a useful contrast. See: Jean-Louis Baudouin, Les obligations, 7th ed (Cowansville, Que : Yvon Blais, 2013) at para 73 [Baudouin].
[8]Ibid.
[9]Art 1525(2) CCQ; see also, in the context of partnerships, arts 2221(1), 2221(1) and 2254 CCQ.
[10]That is, absent specific agreement to make the debt not solidary.
[11]Art 1523 CCQ.
[12]Art 1525(1) CCQ.
[13]Baudouin, supra note 7 at para 75.
[14]Ibid.
[15]Art 2090 CCQ. See also JEC Brierley et al, Private Law Dictionary and Bilingual Lexicons, 2nd ed, (Cowansville, Que: Yvon Blais, 1991) sub verbo “contract of Enterprise” [Brierley].
[16]Art 2099 CCQ. See also Brierley, supra note 15 sub verbo “contract of enterprise”.
[17]Rules concerning the contract of employment are found in arts 2085 ff. CCQ 2. See also Brierley, supra note 15 “contract of employment”.
[18]Art 2099 CCQ.
[19]Art 2101 CCQ.
[20]Drouin v Desautels, [1995] C.S. 123, pp. 128-129.
[21]Art 2195 CCQ.
[22]An Act Respecting the Legal Publicity of Enterprises, s. 21.
[23]Ibid, s. 1-3.