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ARTICLE · 26 OCTOBER 2017

Latent Defects, Limited Warranties And Maritime Law

Borden Ladner Gervais LLP
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The Québec Court of Appeal holds that contracts for the supply of equipment to ships are governed by maritime law and that contractual limits of liability are enforceable.

CanadaTransport
Jean-Marie Fontaine
Jean-Marie Fontaine
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In a decision rendered on September 29, 2017 in Transport Desgagnes Inc. v. Wartsila Canada Inc., 2017 QCCA 1471, the Québec Court of Appeal reaffirmed that contracts for the supply of equipment installed on a vessel fall squarely within maritime law. As a consequence, common law principles of tort and contract apply to the resolution of any disputes, including allegations of latent defects. The Court upheld a limitation of liability clause in a contract for the supply of a Wärtsilä engine notwithstanding the finding that that engine had suffered from a latent defect.

Facts

Transport Desgagnés Inc. ("Desgagnés") owns and operates the vessel "Camilla".

In 2007, Wärtsilä installed on the vessel a reconditioned crankshaft assembled on a new bedplate, together with related equipment and new marine style connecting rods. It offered Desgagnés a limited 12-month warranty. Section 6.3 of its standard terms and conditions also included a limitation of liability of

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