Financing Vehicles

"1745. An instalment sale is a sale with a term by which the seller reserves ownership of the property until full payment of the sale price.
A reservation of ownership with respect to a road vehicle or other movable property determined by regulation, or with respect to any movable property acquired for the service or operation of an enterprise, may be set up against third persons only if it has been published; the reservation may be set up against third persons from the date of the sale provided the reservation of ownership is published within seven days. As well, the transfer of such a reservation may be set up against third persons only if it has been published.
1991, c. 64, a. 1745; 1998, c. 5, s. 2; I.N. 2014-05-01; 2023, c. 24, s. 165; Erratum (2024) 156 G.O. 2, 755."

Case Crédit ltée (Proposition de), REJB 2004-80974

Leasing (Crédit-bail) Leasing is a tripartite financing contract between a vendor, lessor and lessee; the lessor must purchase moveable property from the vendor, for the purpose of leasing the property to the lessee [articles 1842-1850]. The property must be "new" to the lessee; therefore, a sale/leaseback arrangement would not constitute a leasing under the Civil Code of Quebec. While the lessor retains title to the property, the risk of loss and obligation to repair are legally imposed on the lessee. Furthermore, the vendor is directly bound to the lessee for all legal warranties respecting the property. Leasing provides a great deal of flexibility as regards remedies, which may be freely stipulated by the parties, subject to rules of public order. Long-term Lease (Louage) A lease is a simple bilateral contract whereby the original supplier or owner, who retains title, is the lessor of the moveable property [articles 1851-1891]. The lessor is bound by all legal warranties, including suitability of the property for its intended use. The parties may stipulate any remedies not contrary to public order. Instalment Sale (Vente à tempérament) The instalment, or conditional, sale contract is another title retention financing vehicle [articles 1745-1749]. The instalment sale transfers the risk of loss of the property to the purchaser. The Civil Code of Quebec stipulates that if the sale price is not paid in accordance with the contractual terms, the vendor may, in addition to claiming arrears, exact payment of the balance due or take back the property; if the contract contains a clause of forfeiture of benefit of term, the vendor may instead exact payment of the balance of sale price. Contrary to the previously prevailing view, the Quebec Court of Appeal [Case Crédit ltée (Proposition de), REJB 2004-80974] has recently determined that these recourses are not of public order, such that the parties may stipulate that the vendor has the right to take possession of the property and sue for the balance due.