The obligation to inform versus the obligation to be informed

No. While the obligation to inform is one of the central obligations of the seller and should generally be interpreted broadly, it does not extend indefinitely.

Although the obligation to inform is a broad concept that must be adapted to each situation, it does not have clearly defined limits because it is based on the principle of good faith.

Recently, the Supreme Court of Canada reminded us that in the pre-contractual phase of a contract, the requirements of good faith usually entail an obligation to act with "loyalty and fair play". The obligation to inform is mostly limited to items or facts the knowledge of which is critical to the buyer's willingness to enter into the contract. Thus, the seller cannot deliberately omit information deemed decisive, or deliberately transmit information that is erroneous.

As for the buyer, he or she has an obligation to make enquiries. This means that the buyer cannot passively wait for the required information. A failure to seek information could be fatal in the case of a claim against the seller, since the latter does not have the obligation to enquire into all the reasons behind the buyer's intent to enter into the contract.

Finally, it is necessary to point out that, despite the obligation of good faith that must govern all relations between the parties, it does not have the effect of subordinating the interests of one party to those of the other. Each party normally retains its right to defend and assert its own interests.

On the other hand, while each party may protect its own interests, they must do so in a fair manner and in a way that does not vitiate the consent of the co-contractor. Consequently, the line between asserting one's interests and deceiving the other party may be thin. Caution is therefore warranted.

If you have any questions or queries about the application of the obligation to inform or the obligation to disclose, please do not hesitate to contact our litigation team at , who will be happy to advise you.