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Land bank agreement constituted novation and created obligation with suspensive term.
A municipality and a developer entered into an agreement creating a “land area bank” allowing excess land transferred for park purposes to be credited against future development fees.
The contemplated future cadastral operations never occurred, and the developer’s successor sought compensation for the unused bank.
The Supreme Court held that the agreement effected novation, extinguishing the municipality’s original restitution obligation and replacing it with a new contractual obligation based on the bank.
The obligation was subject to a suspensive term tied to future cadastral operations, which the parties considered certain but whose timing was indeterminate.
Applying art. 1512 C.C.Q., the Court fixed the term at the date of the developer’s demand letter and held that damages for performance by equivalence were appropriate.
