LE TIERS TROMPE (A PROPOS DE L'AFFAIRE BAIL LTEE)

Abstract

In spite of the changing appearance of the principle of the relative effect of contracts, the liability of a defaulting contracting party towards a third party presents a persistent problem. On what basis can a third party complain about the conduct of a contracting party? The author examines the decision of the Supreme Court of Canada in Banque de Montreal c. Bail Ltée where this problem arises in relation to the duty to inform. After stating the general theory of that duty as sketched by the Supreme Court, the writer outlines the remedies available to a third party against a defaulting contracting party. He concludes that the examination of the extra-contractual relationship between a contracting party and a third party makes it easier to understand the importance, in the application of the duty to take reasonable care, of factors such as the nature of the damage or justifiable reliance.