Other Sources of Obligations: Management of Business, Payment Not Due, and Unjustified Enrichment

Overview

The Civil Code of Quebec (Code civil du Québec, CCQ) recognizes two broad categories of obligation sources: contract and all acts or facts to which the law attaches obligatory effects by its own authority (art. 1372 CCQ). Among the non-contractual sources, beyond extra-contractual liability (responsabilité extracontractuelle) under art. 1457 CCQ, three additional mechanisms generate obligations without any agreement between the parties. These are management of the business of another (gestion d'affaires), governed by art. 1482 to 1490 CCQ; reception of a payment not due (réception de l'indu), governed by art. 1491 and 1492 CCQ; and unjustified enrichment (enrichissement injustifié), governed by art. 1493 to 1496 CCQ. Formerly grouped under the label "quasi-contracts" (quasi-contrats), these three institutions share a common corrective logic: the law supplies the obligation to reimburse, restore or indemnify without an agreement creating that obligation. An unrelated contract between the parties does not exclude these mechanisms.

Learning Objectives

After studying this lesson, the reader should be able to:

• Identify and distinguish the three non-contractual, non-delictual sources of obligations under the CCQ
• Explain the conditions, obligations, and effects of management of the business of another
• Apply the rules governing the reception of a payment not due to common fact patterns

Sources of Obligations Beyond Contract

Article 1372 CCQ distinguishes contractual obligations from those attached by law to acts or facts. Management of another's business, payment not due and unjustified enrichment have separate conditions. Fault is not an essential element of these three regimes, although wrongful conduct can produce additional liability.

The absence of another remedy is characteristic of unjustified enrichment. It is not a common condition to transplant into every claim under arts. 1482–1492 CCQ. Nor does every successful management require a benefit still remaining in the principal's patrimony: reimbursement can be due even when the intended result was not achieved (art. 1486 CCQ).

Management of the Business of Another

Definition and Rationale of Management

Management of business for another occurs when a person, the manager (gérant), spontaneously performs an act or undertakes a task for the benefit of another person, the principal (géré), without being legally, judicially, or conventionally required to do so (art. 1482 CCQ). The intervention must occur without the principal's knowledge, or with that knowledge if the principal cannot appoint a mandatary or otherwise attend to the matter.

The intervention may be material or juridical in nature. Material acts include towing a stranded vehicle, storing and repairing an abandoned boat, or preserving goods left behind by a third party. Juridical acts include managing the property of a deceased person before a liquidator of the succession (liquidateur de la succession) is appointed, administering the property of a minor, or managing the affairs of an incapable person before a protective regime (régime de protection) is established.

The institution serves a practical function: the law encourages individuals to act in the interest of others who cannot protect their own affairs, provided the intervention is timely and reasonable, and provides for reimbursement and indemnification.

Illustrative example: A neighbour discovers that a pipe has burst in the home of an absent property owner during winter. The neighbour arranges for emergency plumbing repairs to prevent flooding damage. This neighbour qualifies as a manager under art. 1482 CCQ and may seek reimbursement for the repair costs from the property owner upon the owner's return.

Conditions for a Valid Management

Several conditions must be satisfied for the rules of management of the business of another to apply:

1. Spontaneity. The manager must act on their own initiative. No contract (contrat) may already oblige the manager to perform the intervention. If a contractual relationship governs the situation, the rules of mandate (mandat), service contracts, or another relevant contract apply instead.

2. No legal obligation to act. The manager must not be legally required to intervene. A tutor, trustee in bankruptcy, liquidator or administrator acting within an existing duty is therefore outside this regime for those acts.

3. Intention to manage for another. The intervention must be undertaken for the principal's benefit, with an intention to obtain reimbursement rather than make a gift. An incidental personal benefit does not settle the issue: mixed interests require a contextual assessment (JurisClasseur, fasc. 8, paras. 7–10).

4. Timeliness. The decision to intervene must be appropriate in the circumstances (opportune) (art. 1482 CCQ); urgency is helpful evidence but is not always required. An inopportune intervention reduces the principal's obligation to the extent of enrichment only.

5. The principal's situation. Article 1482 CCQ contemplates two possibilities. The person may be unaware that someone is attending to their affairs. Alternatively, they may know about the intervention but be unable to appoint a mandatary (mandataire) or arrange for the matter to be handled in another way. Illness or distance may explain that inability, but the available means must still be examined in the circumstances.

6. Notification. Once communication becomes possible, the manager must tell the principal about the intervention (art. 1483 CCQ). Notice allows the principal to resume control or make suitable arrangements. A justified initial intervention does not authorize the manager to continue indefinitely without informing the person concerned.

Obligations of the Manager

The manager's obligations operate on two levels: towards third parties and towards the principal.

Towards third parties. The decisive question is whose name the manager used. A manager contracting in their own name is personally bound, without prejudice to the manager's or third parties' recourses against the principal (art. 1489, para. 1 CCQ). A manager acting in the principal's name is bound to the third parties only if the principal is not bound (art. 1489, para. 2 CCQ). The principal's mere inability to pay, such as insolvency, does not itself make the manager liable (JurisClasseur, fasc. 8, paras. 31–32).

Towards the principal. Management must continue until it can be abandoned without risk of loss or until the principal, their tutor, mandatary or temporary representative, or the liquidator of their succession can take over (art. 1484 CCQ). The manager is otherwise subject to the compatible obligations of simple administration, including prudence, diligence, honesty and loyalty (arts. 1299 ff. and 1309 CCQ). If the manager dies, a liquidator who knows of the management must do what is necessary to prevent loss and promptly account to the principal (art. 1485 CCQ).

Obligations of the Principal

The principal bears obligations towards both third parties and the manager.

Towards third parties. The principal must honour the necessary or useful commitments made by the manager in the principal's name or for the principal's benefit (art. 1486, para. 2 CCQ).

Towards the manager. When the conditions are met, the principal reimburses necessary or useful expenses and compensates injury suffered because of the management that is not attributable to the manager's own fault, even if the intended result was not achieved (art. 1486 CCQ). Necessity and usefulness are assessed when expenses or commitments were incurred (art. 1487 CCQ). Improvements to the principal's immovable are governed by the rules applicable to a possessor in good faith (art. 1488 CCQ).

The amount recoverable cannot therefore be determined solely by adding up what the manager spent. Appropriate management falls under the reimbursement and indemnification criteria in arts. 1486–1488 CCQ. Where the intervention was inopportune, art. 1490 instead limits recovery to the principal's enrichment.

A separate question concerns the time available to sue. The three-year prescriptive period (délai de prescription) in art. 2925 CCQ applies to the management-of-business claim; identifying the recoverable amount does not itself settle that procedural question.

Worked Example: Emergency Repairs by a Co-Owner and Management of Business

Factual Scenario

Hypothetical teaching example.

In a mixed-use commercial co-ownership building in Quebec City, an arctic cold snap caused an exterior standpipe supplying the building's wet-pipe fire suppression system to burst late on a holiday evening. The building manager was outside the country, and no syndicat directors responded to emergency telephone calls.

Catherine Viau, the owner of a ground-floor commercial unit, noticed water pouring down the foundation walls toward the electrical service room. Realizing that structural and electrical systems were in imminent danger of destruction, Viau immediately engaged Ecoulement Rapide Inc., an emergency contractor, to excavate the frozen pavement, replace the fractured manifold, and seal the foundation wall. Viau paid the emergency invoice of $14,500 from her personal operating funds. Two months later, the syndicate of co-owners refused to reimburse Viau, asserting that she lacked formal authorization from the board of directors and acted as an unauthorized interloper under the declaration of co-ownership.

Reception of a Payment Not Due

Definition and Scope of Payment Not Due

The reception of a payment not due arises when a person, known as the accipiens (the recipient, bénéficiaire), receives something by error from another person, known as the solvens (the payer, payeur), who was not legally or contractually bound to make the payment (art. 1491 CCQ). Common situations include payment of a non-existent debt, overpayment, or payment to someone other than the true creditor.

Article 1491 CCQ also covers an undue payment made to avoid prejudice while the payer protests that nothing is owed. The protest must contest the debt at payment; merely paying to settle a dispute or buy peace does not establish a recoverable payment. For example, a person disputing a charge may pay under protest to avert a threatened seizure, then establish that the charge was not due (JurisClasseur, fasc. 8, para. 52).

Illustrative example: A tenant mistakenly makes a double rent payment for the same month. The landlord who received the duplicate payment is bound to return the excess. The tenant may recover the overpayment through an action in restitution under art. 1491 CCQ.

Conditions for Restitution

Three conditions govern the obligation to restore a payment not due:

1. A payment must have occurred. The payment may take various forms, including the delivery of money, goods, or the provision of services (art. 1553 CCQ).

2. Absence of a genuine obligation. The disputed payment must not have been due to that recipient. An overpayment can be recoverable even though the parties have a valid contract and the payer owes the underlying debt. Payment to the wrong creditor or mistaken payment of another person's debt may also qualify.

3. Error or protest. The payment must arise from an error of fact or law, or be made to avoid prejudice while protesting that nothing is owed. The inexcusable-error restriction in art. 1400 CCQ does not itself bar recovery of a payment not due; negligence alone is insufficient. A payment consciously made as a gift or to discharge an obligation for someone else can be valid, but donative intent is not automatically presumed (JurisClasseur, fasc. 8, paras. 46–56).

In Threlfall v. Carleton University, 2019 SCC 50, the majority assessed absence of debt and error retrospectively after the presumption that a missing pensioner was alive was rebutted. The recovery concerned pension payments made after the date he was later proved to have died. This does not make every subsequently extinguished debt a claim under art. 1491 CCQ: nullity or resolution of a contract may instead trigger restitution directly under arts. 1422, 1606 and 1699 CCQ. JurisClasseur, fasc. 8, para. 43, distinguishes these routes.

Effects of the Payment Not Due

The payer recovers the object of the payment through a judicial action, and the rules governing the restitution of prestations (restitution des prestations) apply (art. 1492 and art. 1699 et seq. CCQ).

Article 1491, para. 2 CCQ protects a good-faith recipient where, as a result of the payment, their claim against the true debtor has become prescribed, they destroyed the title of obligation, or they gave up a security (sûreté). These are not blanket exceptions whenever a debt happens to be prescribed or a document is missing. The payer retains recourse against the true debtor.

The ordinary period is three years from payment (arts. 2880 and 2925 CCQ), subject to applicable special rules, suspension or interruption. Later discovery of the error does not automatically create a fresh three-year period; the facts must support the relevant rule, such as impossibility in fact to act under art. 2904 CCQ (JurisClasseur, fasc. 8, para. 55).

Unjustified Enrichment

Definition and Legal Basis

Articles 1493 to 1496 CCQ organize a remedy first developed through case law (jurisprudence). In Cie immobilière Viger ltée v. Lauréat Giguère inc., [1977] 2 SCR 67, the Supreme Court recognized the principle and conditions of unjustified enrichment. The remedy addresses a problem that management of another's business and reception of a payment not due do not necessarily resolve: value may move without justification even though there was neither an intervention for another nor payment of a nonexistent debt.

The word unjustified (injustifié) directs attention to the legal explanation for that movement of value. It avoids importing the distinct concept of cause of the obligation (cause de l'obligation) into this remedy. The older expression without cause (sans cause) must therefore be read with that terminological distinction in mind.

Unjustified enrichment occurs when one person is enriched at the expense of another, who is correspondingly impoverished, and no justification exists for the enrichment or the impoverishment (art. 1493 CCQ). The impoverished party (appauvri) may seek indemnification through the action in unjustified enrichment, known in Latin as the action de in rem verso.

Hypothetical example: For eighteen months, Rania organizes inventory for her brother's workshop without pay while considering becoming a partner. The project is abandoned. Unpaid work alone does not establish her claim. The analysis must determine whether an agreement already gives her contractual rights, whether she had a constant intention to make a gift or acted in her personal and exclusive interest or at her own risk, and what benefit corresponds to her impoverishment (arts. 1493 and 1494 CCQ). The discussions about a future partnership must be examined to assess her expectations; their failure alone proves neither a gift nor an entitlement to compensation. Unjustified enrichment becomes relevant only if all its conditions, including subsidiarity, are established. Child care and domestic work performed during a de facto union (union de fait) may also require examination under this remedy following the union's breakdown.

Conditions for the Action

The usual analysis of unjustified enrichment has six conditions:

1. Enrichment of the defendant. The defendant must have been enriched, and the enrichment must still exist at the time the action is brought, except where the enriched party acted in bad faith (mauvaise foi) (art. 1495 CCQ). The enrichment may consist of an increase in patrimony or the benefit of having avoided a loss or other prejudice.

2. Correlative impoverishment of the plaintiff. The plaintiff must have been impoverished in a manner that corresponds to the defendant's enrichment, such as non-payment for services rendered.

3. Connexity between enrichment and impoverishment. The impoverished party must demonstrate a connection (connexité) between their impoverishment and the defendant's enrichment. This is not the strict causal link required in extra-contractual liability, but rather a simple correlation between the two movements of value.

4. Absence of justification. No justification for the enrichment may exist (art. 1494 CCQ). The enrichment must not be explained by a particular legal obligation, a natural obligation (obligation naturelle), or a juridical act. The enrichment must also not originate from an act performed by the impoverished person exclusively in their own personal interest. In a hypothetical example, an owner builds a dike solely to protect their own land, without any shared undertaking with the neighbours; neighbouring properties benefit only incidentally. On those facts, the owner's expenditure in their personal and exclusive interest justifies the incidental enrichment and defeats this claim against the neighbours. Acting primarily for personal advantage, without establishing that exclusive interest, would not by itself establish this justification. The enrichment must also not result from a constant donative intention or an act undertaken at the impoverished person's own risk (art. 1494 CCQ).

5. No evasion of the law. The action cannot be used to circumvent a legal prohibition or obtain indirectly what the law denies (JurisClasseur, fasc. 8, para. 93).

6. Subsidiarity. The impoverished person must not have another available remedy, nor must they have deprived themselves of another remedy, against the enriched party for indemnification of the impoverishment. A buyer who could exercise an action for forced transfer of title (action en passation de titre) cannot bring an action in unjustified enrichment instead. An impoverished person who allowed the prescriptive period on an available remedy to expire cannot fall back on this action as a substitute (art. 1494 CCQ).

The subsidiarity condition gives unjustified enrichment its distinctive residual character as a corrective mechanism for situations where no specific legal instrument addresses the unjust transfer of value between two patrimonies.

Effects of Unjustified Enrichment

The calculation requires two separate valuations: what the defendant gained and what the claimant lost. Indemnification (indemnisation) is limited to the lesser of enrichment and impoverishment (art. 1493 CCQ). Establishing a loss therefore does not justify recovery of that amount if the corresponding benefit is smaller. Both valuations are ordinarily made as of the judicial demand (demande en justice) under art. 1495 CCQ.

The rules governing the restitution of prestations (art. 1699 et seq. CCQ) do not apply to the action in unjustified enrichment. Art. 1493 CCQ specifies that the remedy is indemnification, not restitution.

Where the enriched party acted in bad faith, the enrichment may be assessed at the time the enriched person benefited from it rather than at the date of the demand (art. 1495 CCQ).

Article 1496 CCQ permits recourse against a third-party beneficiary who was in a position to know of the impoverishment, where the enriched person transferred the enrichment gratuitously without intent to defraud the impoverished person. Actual knowledge is not the statutory threshold.

The ordinary prescriptive period is three years. In claims arising from a de facto union, it generally runs from the end of cohabitation, when the basis for assessing the parties' contributions and benefits crystallizes, subject to the applicable suspension and interruption rules (arts. 2880 and 2925 CCQ; JurisClasseur, fasc. 8, paras. 98–99).

Worked Example: Uncompensated Contributions in De Facto Unions and Unjustified Enrichment

Factual Scenario

Hypothetical teaching example.

Sophie Tremblay and Marc Roy cohabited for twelve years, with no marriage, civil union or parental union. They have no children together. During the union, Marc purchased a 15-acre rural property and established an equestrian boarding and training facility titled solely in his name.

Sophie managed the day-to-day operations of the stables, supervised staff, handled scheduling and accounting, and invested $65,000 of her personal inheritance directly into constructing indoor riding arenas and stable stalls. Sophie received no salary, while Marc used the business cash flow to pay down the mortgage on the property. Upon the breakdown of the relationship, the fair market value of the equestrian facility had increased from $450,000 to $900,000. Marc required Sophie to leave, asserting his sole registered title and claiming that she had received free lodging in exchange for her work. Sophie instituted an action for unjustified enrichment claiming a $210,000 indemnity.

Practice Checklist

Use this checklist to identify and analyze other sources of obligations in a fact pattern:

Initial Classification

• Which legal source governs the particular payment or intervention?
• Does a contractual obligation govern the act, or is an additional claim for fault relevant?
• Does the fact pattern suggest unjust enrichment of one party at the expense of another?

Management of the Business of Another

• Did a person spontaneously intervene for the benefit of another?
• Was no contract, legal duty, or judicial order compelling the intervention?
• Did the manager intend to act for the principal's benefit and obtain reimbursement rather than make a gift?
• Was the management timely and opportune?
• Did the manager notify the principal as soon as possible?
• Verify: reimbursement and indemnification are owed if conditions are met

Reception of a Payment Not Due

• Did a payment occur (money, goods, or services)?
• Was the disputed payment or excess not due to that recipient?
• Was the payment made in error, or under protest to avoid a prejudice?
• Did a good-faith recipient lose a claim or security, or destroy the title, as a result of the payment?

Unjustified Enrichment

• Is there an enrichment of the defendant that still exists at the date of the demand?
• Is there a correlative impoverishment of the plaintiff?
• Is there a connection between the enrichment and the impoverishment?
• Is there no legal justification for the enrichment and no attempt to evade the law?
• Does the plaintiff lack any other legal remedy against the enriched party (subsidiarity)?
• Check any parental-union or contractual remedy and calculate the lesser of enrichment and impoverishment.