In Gélinas v. LG Constructions TR inc., rendered on October 30, 2025, the Court of Appeal comments on the legal framework governing a contractor unilaterally terminating two construction contracts. In particular, the Court clarifies the application of article 2129 of the Civil Code of Quebec (“C.C.Q.”), which provides, when applicable, that a client is bound to pay the contractor the actual costs and expenses incurred, and the value of the work performed before the termination of the contract.
The facts
On June 26, 2018, Ms. Nathalie Gélinas (“Ms. Gélinas”) and Mr. Jean-Pierre Gilbert (“Mr. Gilbert”), at the time common-law spouses, entered into two agreements whereby Mr. Gilbert’s company (“LG Constructions“) undertook to renovate two buildings belonging respectively to Ms. Gélinas and her company (“Panier Santé”).
LG Constructions began the renovations at the end of September 2018 and ultimately abandoned the construction sites definitively on October 26, 2018, due to the spouses’ breakup.
LG Constructions thereafter instituted legal proceedings against Ms. Gélinas and Panier Santé, claiming the cost of materials provided and the value of the completed work. In response, Ms. Gélinas and Panier Santé filed a defence and counterclaim, alleging various deficiencies, defects, and LG Constructions’ wrongdoing in abandoning the construction sites.
The Trial Judgment
The trial judge partially awarded LG Constructions’ claim for damages and ordered Ms. Gélinas and Panier Santé to pay 51.53% of the contract price (of the 80% claimed). This order also included an amount of $57,047 for the cost of custom-made windows delivered one month after abandoning the construction sites, the order having been impossible to cancel.
The trial judge determined that LG Constructions was entitled to the cost of the windows, even though it had abandoned the construction sites without a valid reason. According to the judge, the application of article 2129 C.C.Q., “did not depend upon qualifying the termination of the contracts as arising for a serious reason or occurring at an ‘inopportune moment’.” Accordingly, the Court ordered Ms. Gélinas and Panier Santé to pay for the cost of the windows. They thereafter appealed.
The Court of Appeal’s judgment
Ms. Gélinas and Panier Santé only sought the Court of Appeal’s intervention to overturn the order to pay the $57,047 for the cost of the custom-made windows. The Court of Appeal shared their viewpoint and considered that the trial judge committed a revisable error in his application of the facts to the legal framework.
The Court of Appeal first emphasizes that article 2129 C.C.Q. forms part of an exceptional set of rules pertaining to unilateral termination that must be interpreted restrictively. Only termination compliant with articles 2125 to 2128 C.C.Q. can give rise to the application of article 2129 C.C.Q. The fact that LG Constructions abandoned the construction sites without a valid reason must be qualified as a contractual fault that precludes the application of these exceptional rules.
Consequently, the provisions governing liability in general apply, specifically articles 1590 C.C.Q. and following relating to a party’s failure to fulfil its contractual obligations. Under these provisions, LG Constructions is not entitled to reimbursement for the cost of the windows because the cost resulted directly from its own contractual fault. For these reasons, the Court of Appeal overturned the trial judgement, removing the order for the payment of the cost of the windows.
Takeaway
In cases of unilateral termination of a construction contract, the consequences and impacts depend on whether the termination is compliant, or not, with the exceptional rules provided at articles 2126 to 2128 C.C.Q.
When a contractor unilaterally terminates a contract, the applicable rules are very different from those that apply to a client unilaterally terminating a contract. The circumstances allowing a contractor to unilaterally terminate are very limited and require the demonstration of a “serious reason” and that the termination did not occur at an “inopportune moment” (article 2126 C.C.Q.). The “serious reason” criterion is extremely difficult to satisfy and essentially requires evidence of a situation out of the contractor’s control that completely denatures the contract in question. Even a client’s failure to pay the contractor does not generally constitute a “serious reason” allowing for unilateral termination.
As such, a contractor can only unilaterally terminate a contract in very particular circumstances and, in most cases, runs the risk of engaging its liability. What’s more, a contractor that unilaterally terminates cannot rely upon article 2129 C.C.Q. to claim costs and expenses incurred prior to the termination, namely if it is not able to establish a “serious reason”.
Consequently, to avoid litigation and unexpected consequences, when a contractor is contemplating unilaterally terminating a contract, when possible, the best course of action is to negotiate an agreement stipulating the modalities of the termination.
Failing an agreement, it is important to establish a strategy with qualified legal counsel to explore all options and to anticipate financial consequences which may result from the abandonment of a construction site at an inopportune time.
Heartbreak alone is insufficient…
