“My company is located in Gatineau and often does business with Ottawa companies. If a problem occurs, do I sue in Quebec or in Ontario?”
While the principles may be similar, the fact remains that the laws in Ontario and Quebec are different. In a geographical area like ours, where the border is so near, the first questions to ask are: what is the applicable law and what is the competent court.
To avoid surprises if you do business with companies located in the United States or in any other province of Canada, it is best to determine clearly beforehand in the contract where one must sue, and the applicable law. Indeed, if not specified in the contract, the situation can become problematic when a dispute arises between companies from different states or provinces or if the problem occurs in a place other than the domicile of the parties.
In fact, when there is no mention of jurisdiction and applicable law in the contract, the rules of private international law come into play, even if it is two provinces of the same country like Quebec and Ontario. We must then take into account a multitude of factors to determine the jurisdiction of the tribunal and the law governing the contract.
All this gives room to a lot of uncertainty about where the action must be commenced and which law is to be used to interpret the contract. To avoid unpleasant surprises, it is in the interest of both parties to establish clearly in advance the competent court and the applicable law, by adding a contractual clause to this effect in the contract.
Contact us to find out the applicable law for your contract and the jurisdiction to hear a dispute, or to draft a clause specifying the court and the law applicable to a contract.
