In accordance with Civil Code of Québec provisions, if the person you are contracting
with has failed to pay you, you may charge interest under certain
conditions.
The interest clause in your contract must comply with section 4 of the Interest Act, which
sets out that contracts must expressly state the yearly rate of
interest rather than just the rate per month.
This means that if the parties set an interest rate for any
period less than a year, they must specify the equivalent yearly
rate. If they fail to do so, the courts must use the legal rate of 5% per annum as set out in the
Interest Act.
In addition, if the yearly rate set out in the contract is
abusive, it may be overruled by the courts. The courts have some
discretion in assessing the rate set by the parties. They may
intervene at the debtor's request and, in particular, impose
the legal rate. To decide whether an interest rate is abusive, the
courts assess various factors, including the nature of the
