Category Archives: Contracts

Canada Updates its Competition Act

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I recently became aware of changes to the Canadian Competition Act (the Act) meant to modernize this piece of legislation, including to give it a little more teeth.

The changes at issue include the following, in case you hadn’t been following this (I hadn’t):

  • The act now prohibits “drip-pricing” by on-line retailers, as it may be tantamount to false (or misleading) advertising. This is familiar to anyone who has shopped on-line where you may be drawn to a particular source offering a what seems like a good deal, until you go through the whole process and realize fees and costs are successively tacked on, so that you end-up with a price that is substantially more than the “price” that attracted you in the first place.
  • Speaking of false (or misleading) advertising, the recent changes to the Act now allow courts to impose penalties that are no longer limited to fixed (capped) amounts. From now on, whenever a judge must impose a penalty on a given business for this, (s)he may elect to set the penalty according either to what profit the business derived from its misdeed, or better yet, on a percentage (3%) of its annual global revenue. Do I have your attention now?
  • Likewise, the recent changes also remove the cap on competition-related criminal penalties, instead providing that judges now have discretion under the Act as to the amount of penalties imposed on wrongdoers.
  • Anti-poaching agreements between employers are now a big no-no, as an unacceptable constraint on the working conditions of Canadian employees by what amounts to a form of cartel. As to this, one has to admit, if you allow business to agree between them to refrain from hiring from competitors, you’re seriously limiting the prospects of employees working in that industry.

The changes at issue came into effect on June 22, 2022.

Québec Adopts its Charter of the French Language v. 3.0

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The province of Québec recently sought to modernize its Charter of the French Language (the “Charter“), a piece of legislation many Quebecers still call “Bill 101” to this day. After partially amending this statute in 2019, the Québec government overhauled it earlier this month, by adopting Bill 96. Through this bill, Québec is expanding the obligations imposed on organizations and businesses, to use French whenever (and however) interacting with residents of the province.

Though I don’t want to get into all the details this morning, it seems worthwhile to provide you with an overview of the kinds of changes this new version of the Charter brings us, so here it is so as to provide you with an idea of what we’re now facing:

  • A general obligation that all organizations serve their clients in French, by providing them with any and all documents and documentation in French, as the case may be;
  • A major change of the rule as to the display of non-French trademarks, by doing away with the exception relating to the common law trademarks. From now on, only common law trademarks composed solely of French words will be tolerated under the Charter, while the rest of trademarks used in Québec will have to be actually registered to pass muster;
  • Reinforcement of the provisions relating to public display of trademarks (e.g. signage) by now requiring that the overall appearance provide substantially more space to French, as compared to other languages such as English (i.e. store fronts should show about twice as much content in French than other languages, not taking into account the trademark);
  • Introduction of a new rule stating that adhesion contracts must now be available in French as a condition of validity for the contracts that are actually entered into by Quebecers, I including but not limited to those for consumers;
  • Lowering from 50 employees to 25, the threshold above which organizations must adopt and apply a francization program;
  • Adoption of stricter rules as to job postings in French and when an organization may require that job applicants have language skills unrelated to French;
  • Addition of a new rule that all written documents and documentation provided by employers to their employees systematically be in French.

It also seems worthwhile to mention that Bill 96 also adds a very American twist to the Charter, by introducing a private right of action. Once in force, this will allow individuals to sue businesses that violate the Charter, so as to obtain either injunctions or (and yes, this is what’s going to have business owners pay attention) damages and punitive damages. As if often the case whenever such rights are introduced in a piece of legislation, class actions will be the first type of proceedings we can expect them to be used for.

I should mention, finally, that most changes outlined above will not come into effect for 3 years, so as to provide businesses with a transition period during which they can bring their organizations in line with the new rules. So, June 1st, 2025 is the deadline you should remember, to update all your practices and your way of doing things in Québec. Mark your calendars!

So, is your organization in-line with all this? Probably not. If it is not, then you now have less than 3 years to do your homework!

Good 7-Minute Read for Anyone Negotiating Contracts: 10 Rules of Contract Redlining

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This morning, I happened on a good article on Law Insider which I’m happily passing along, including for the benefit of anyone customarily doing contract review, modification and negotiations. The article at issue is entitled The 10 Rules of Contract Redlining, a text penned by Nada Alajafi (from Contract Nerds -something I can definitely relate to). You can download it free from Law Insider.

After reading this article, I agree that the idea of contract redlining etiquette (or CRE) seems like something we should collectively have come-up with long ago, including to teach it in law school. There’s the technical aspect (learn how to use Word and track-change, etc.), and then there’s how to go about passing along your changes in a way that will result in a better deal, in the most efficient manner possible. That last one is where this particular problem lies. Our process to modify those draft agreements isn’t exactly optimal, including buy taking more time and energy to actually reach a point where a deal gets made.

Indeed, sadly, how to go about making comments and suggesting changes to draft contracts is definitely NOT something being taught in law school, nor something everyone agrees how to go about doing. As the author mentions in her article, we basically all learn to do this redlining business (meaning making suggested changes and communicating them) as we go, without anyone ever bothering to really explain HOW this should be done. Well, for once, someone has bothered to provide us with the skinny on this topic, including by reducing her advice to 10 rules contract reviewers should generally strive to follow.

Without wanting to steal her thunder, her rules includes advice like:

  • Be transparent and, yes, do flag for the other party ALL your changes to draft contracts (surprising how often we find stuff that was not shown in track-change);
  • Do use track-change adequately, supplementing most of those changes with a comment explaining why this change is required;
  • Do refrain from commenting any insignificant changes, or  more material ones that may benefit from a strategic omission of any explanation;
  • Refrain from adopting a method of negotiations whereby the parties basically send one-another successive versions of the draft document, without ever talking or meeting (if only with a video-conference) to hash it out -limit the number of such rounds of emails to keep things flowing smoothly;
  • Do use color codes in your comments whenever required, either to distinguish certain things or comments meant for your client vs. those addressed to the other party;
  • Be ready to draft any substantial changes you are requesting, as opposed to lazily letting the other party do the actual work after you raise an issue;
  • Be mindful of the fact that the client or the other party or attorney may or may not be as sophisticated as you are with the contracting process, technology or the law -adapt your comments and methods accordingly;
  • At the end of the process, upon preparing the final version of the contract document, do make a point of checking and re-checking that all agreed-upon changes are properly reflected by that final version.

All in all, lot’s of those may seem obvious for those of us who’ve been doing this for a while, but I think a lot of people involved in contract work may certainly benefit from reading and internalizing these rules. Thank you Nada!