When the Legal Warranty Has Been Excluded and the Buyer Sues the Seller Invoking Fraud: Very Precise Proof Is Required


June 8, 2017 Real Estate and Construction

This post, published on Éditions Yvon Blais’ blog on latent defects on May 30, 2017 (FR), discusses the judgment in Matteau vVigneault (Full Text | Fiche Quantum), which reminds us that fraud requires very precise proof.

Specifically, when a buyer invokes the seller’s fraud, the buyer must prove that the seller intended to deceive him; therefore, he must prove the seller’s bad faith at the time of the sale, in the form of lies, manipulations, or reticence. Thus, to prove the seller’s fraud, it is not enough to demonstrate the falseness and/or inaccuracy of the seller’s representation/statement; the buyer must demonstrate the seller’s intention to deceive him.   

Thus, this post reminds us that the burden of proof required for proving fraud goes beyond the simple demonstration of the false statement. Specifically, fraud requires proof of the seller’s dishonest and willful intention to mislead the buyer. As the courts have ruled, notably in Cayer v. Bartolone, (Full Text | Fiche Quantum), buyers bear a heavy burden of proof in cases of fraud.

A buyer must therefore be careful when he equates the seller’s false or erroneous statement with fraud, as such a false or erroneous statement will not automatically constitute fraud. Accordingly, in Mangiola v. Pucella (Full Text) the Court of Appeal reminded us fraud cannot be found if the declarant (in this case, the seller) was in good faith when he made false and/or erroneous statements to the buyer.

This bulletin provides general comments on recent developments in the law. It does not constitute and should not viewed as legal advice. No legal action should be taken on the basis of the information contained herein.

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