The Act to protect consumers from planned obsolescence and to promote the durability, repairability and maintenance of goods (“Law 29”) was adopted as part of an effort to modernize consumer law in Quebec. It amends the Consumer Protection Act1 (“CPA”) and is intended to better protect consumers in terms of the durability and repairability of goods. The main changes brought about by Law 29 can be summarized as follows: It introduces a legal warranty of good working order for certain commonly used new goods. It enhances the legal warranty of availability of replacement parts and repair services for goods that require maintenance work. Regarding additional warranties, it adds an obligation for merchants to inform consumers, before entering into a contract, of the existence and content of any legal warranty of good working order. It prohibits marketing goods with planned obsolescence and using techniques that make it more difficult for consumers to maintain or repair goods. These new measures have been gradually coming into force since October 5, 2023. The legal warranty of good working order will start to apply on October 5, 2026, marking the last phase of implementation2. 1.     The legal warranty of good working order Under sections 38.1 and following of the CPA, certain new consumer goods will be covered by a warranty of good working order at the time of sale. Entry into force and scope The new warranty will come into force on October 5, 2026. It imposes a minimum period of good working order during which the merchant or manufacturer of a good will be bound to cover repair costs, including parts and labour3. Exclusions However, the following will not be covered by the warranty: Normal maintenance and the resulting replacement of parts Damage resulting from misuse by the consumer4. Covered goods and duration of the warranty The Regulation respecting the application of the Consumer Protection Act5 (the “Regulation”) determines which goods are covered and the duration of the warranty6 that applies to each good. Here are some examples: Range, refrigerator, freezer, air conditioner and heat pump: six years Dishwasher, washing machine, dryer: five years Television set: four years Desktop computer, laptop, tablet, cell phone, video game console: three years 2.    Display and disclosure obligations Before a contract is entered into For in-store sales, merchants will have to display the duration of the warranty of good working order applicable to the good near the good’s price7. Also, before entering into a contract containing an additional warranty for goods already covered by the warranty of good working order, merchants will have to provide consumers with a notice informing them of the existence and scope of such warranty, in accordance with the requirements of sections 91.9 and 91.10 of the Regulation8. After a contract has been entered into After a sale, the merchant will have to provide the consumer with a written document outlining the legal warranty of good working order, including their obligations in the event of malfunction of the goods during the coverage period9. Penalties A merchant or manufacturer who fails to indicate the duration of the warranty near the sale price or fails to provide the associated document after the sale will be subject to a fine ranging from $3,000 to $75,000 (in the case of a legal person)10. 3.    Our advice With the legal warranty of good working order slated to come into force in fall 2026, manufacturers and merchants operating within Quebec should prepare to deal with the new warranty now, in particular by: Identifying the goods that may be subject to the warranty Confirming which minimal periods of good working order apply under the Regulation Updating labels, in-store displays and information materials Reviewing contractual and pre-contractual documentation, including documents provided during the sale of additional warranties, to incorporate the required notices Given that the warranty will require covering certain repair costs, and that it will come with specific obligations regarding displays and consumer information, we highly recommend that you go through with the above analysis. We are available to assist you with the implementation of measures to comply with the new requirements of Law 29, in particular by helping you identify affected products, reviewing your documentation and disclosures and providing advice on how to adapt your business practices. Consumer Protection Act, CQLR c. P-40.1 Supra note 1, s. 37 Id., s. 38.2. Id., s. 38.3. Regulation to amend the Regulation respecting the application of the Consumer Protection Act, O.C. 1459-2025 (G.O. II), s. 1. Regulation respecting the application of the Consumer Protection Act, CQLR, c. P-40.1, r. 3. Id., s. 38.8. Supra, note 5, ss. 3 and 4. Supra, note 1, s. 38.9. Supra, note 1, s. 277.

Shareholders’ agreements set out shareholders’ rights and obligations in various situations that may occur during a corporation’s existence. While it is true that corporate laws generally establish a common structure for all business corporations, they don’t do so in great detail. A shareholders’ agreement is thus an invaluable tool for preventing conflicts and settling those that do arise. A shareholders’ agreement is essential to the proper functioning of a corporation and helps to solidify the commitment of its shareholders. A shareholders’ agreement also serves to: Maintain proportional shareholding between shareholders; Maintain the “private” nature of a corporation by preventing third parties from becoming shareholders without the consent of the parties; Ensure a market for the shares; Prevent a minority shareholder from being prejudiced by a majority shareholder’s decisions or actions; Settle in advance certain potentially contentious issues in the administration of a corporation; and finally Give the shareholders the power to decide on some of the corporation in question’s activities. The main provisions of a shareholders’ agreement The clauses that can be included in a shareholders’ agreement are many, and they make it possible to apprehend and prevent difficult situations. Here are some examples. Share transfers Some clauses in shareholders’ agreements govern the transfer of shares, such as: Clauses imposing an obligation to sell or an option to purchase the shares of other shareholders in specific situations (disability, personal bankruptcy, retirement at a certain age, death, voluntary withdrawal from the corporation, misappropriation of corporate funds or breach of a non-competition or non-solicitation clause). A right of first refusal clause. This type of clause aims to oblige a selling shareholder to offer their shares to co-shareholders, in proportion to their shareholding, before the selling shareholder can sell them to a third party or another co-shareholder. A drag-along clause. This type of clause is required in agreements between a majority shareholder and one or more minority shareholders. By availing themselves of a drag-along clause, minority shareholders will be entitled to demand, as a condition of the majority shareholder's right to sell their shares to a third party, that the third party also purchase the minority shareholders’ shares on the same terms as those offered for the majority shareholder's shares. A shotgun clause. This type of clause allows any shareholder to initiate a process to purchase a co-shareholder’s interest, whereby the co-shareholder must either (i) accept the offeror’s offer to purchase; or (ii) make a counter-offer to purchase on the same terms and conditions as those contained in the offeror’s offer to purchase. Terms and conditions for share purchases A shareholders’ agreement can also serve to resolve issues arising from share purchase and sale clauses, by determining: Who will purchase the shares—the corporation, the shareholders or third parties. Payment terms (cash, deferred payments, etc.). Life insurance or other insurances to guarantee payment of the shares. Share valuation A shareholders’ agreement may determine various methods of valuing shares, which may vary depending on the circumstances leading to redemption, such as: Valuation at book value. Valuation at adjusted book value. Valuation at liquidation value. Valuation at capital value. Valuation by a third-party, etc. Voting clauses Shareholders may determine a variety of voting arrangements by setting out clauses relating to: The election of directors. The need for a special majority vote in certain situations. The creation of a pooling agreement (transfer of shares to a custodian agent who undertakes to vote and administer the shares in accordance with the instructions of the shareholders who signed the shareholders’ agreement). The creation of a trust agreement (transfer of shares to a custodian agent who undertakes to vote and administer the shares at their discretion). Management clauses Through management clauses, shareholders may: Determine each shareholder’s contribution. Share revenues. Provide for the reimbursement of expenses. Allocate the duties of the shareholders. Provide for terms should one of the shareholders become disabled. • Ensure that a departing shareholder will abide by exclusivity, confidentiality and non-competition undertakings. Govern vacation times. It may be tempting to think that shareholders’ agreements contain more or less the same clauses and that it would be easy to draft one on one’s own. While the concepts are easy to grasp, there are multiple factors that make their application much more complex. Each corporation has a different business reality, and a shareholders’ agreement must be adapted to such specific reality. For example, what if one of the shareholders cannot be insured because they are older or have a serious illness? Or what if shareholders’ life insurance is worth $500,000, but the value of a share is deemed to be $200,000? Who will benefit from the extra $300,000, the corporation or the estate? It’s best to consult a lawyer and a tax specialist to understand your corporation’s needs and all the risks associated with the clauses in a shareholders’ agreement. The experts at Lavery Lawyers advise you to draw up a shareholders’ agreement from the outset, when everything is going well, and to update it should the corporation undergo major changes or new shareholders arrive.