CHAPTER ELEVEN: CONSUMER PROTECTION

1 CHAPTER eleven : CONSUMER PROTECTION TABLE OF CONTENTS I. OVERVIEW .. 1 A. INTRODUCTION .. 1 B. COMMON LAW OF CONTRACTS .. 1 C. GOVERNING LEGISLATION, REGULATIONS, AND RESOURCES .. 1 1. Legislation and Regulations .. 1 2. Resources .. 2 II. A STEP-BY-STEP ANALYSIS OF CONSUMER TRANSACTIONS .. 4 A. DETERMINE THE CLIENT S POSITION AND DESIRED OUTCOME .. 4 B. CHECK THE FORM AND TERMS OF THE AGREEMENT .. 5 C. DETERMINE WHETHER THE CONTRACT COMPLIES WITH THE STATUTORY REQUIREMENTS .. 5 D. DETERMINE WHETHER ANY COMMON LAW REMEDIES ARE AVAILABLE .. 5 1. No Obligation .. 6 2. 6 3. Frustration .. 6 4. Mistake .. 6 5. Laches or Acquiescence, Waiver, and Estoppel .. 6 6. Unconscionability .. 6 7. Illegality .. 7 E. DETERMINE THE LIMITATION PERIOD FOR MAKING A CLAIM.

2 7 III. CONTRACTS FOR THE SALE OF GOODS .. 7 A. IDENTIFYING AND CLASSIFYING THE TERMS OF A CONTRACT .. 7 1. Implied Term .. 8 2. Condition .. 8 3. Warranty .. 9 4. Innominate Terms .. 9 B. DETERMINING IF THE SALE OF GOODS ACT GOVERNS THE CONTRACT .. 9 1. Goods .. 9 2. Contract of Sale .. 9 3. Lease Contracts .. 10 C. PROVISIONS OF THE SALE OF GOODS ACT .. 10 1. Implied Conditions and Warranties .. 10 a) Implied Condition of Title: s. 16(a) .. 10 b) Implied Warranty of Quiet Possession: ss. 16(b) and (c) .. 10 c) Implied Condition of Compliance with the Description: s. 17 .. 11 d) Implied Condition of Fitness for Buyer s Purpose: s. 18(a) .. 11 e) Implied Condition of Merchantable Quality: s. 18(b) .. 12 (1) The Concept of Merchantable Quality.

3 12 (2) Sale by 13 (3) Seller who Deals in Goods of that Description .. 13 (4) Effect of Examination by the Buyer .. 13 (5) Implied Condition of Reasonable Durability .. 13 f) Implied Conditions in Sales by Sample: s. 19 .. 13 2. Exemption from Implied Contractual Terms .. 14 a) Private Seller .. 14 b) Commercial Seller .. 14 3. Buyer s Lien .. 14 4. Buyer s Obligations and Seller s Rights .. 14 a) Seller s Personal Rights .. 14 (1) Action for the Price: s. 52 .. 14 (2) Damages for Non-Acceptance: s. 53 .. 15 b) Seller s In Rem Rights .. 15 (1) Unpaid Seller s Lien: ss. 43 - 45 .. 15 (2) The Right of Stoppage in Transit: ss. 47 - 49 .. 15 (3) The Right of Resale: ss. 43(1) and 51 .. 15 5. Other Sale of Goods Act Provisions .. 16 a) Stipulations as to Time.

4 16 b) Stipulations as to Quantity .. 16 c) Stipulations as to Price .. 16 d) Installments .. 16 D. REMEDIES FOR BREACH OF CONTRACT .. 16 1. Damages Generally .. 16 2. Breach of Warranty .. 17 3. Breach of Condition .. 17 a) Repudiation .. 17 (1) When a Breach of Condition is Treated as a Breach of Warranty .. 17 (2) Specific Goods: Upon Passage of 18 (3) Unascertained Goods: Upon Acceptance .. 18 b) Damages for Breach of Condition .. 18 c) Specific Performance .. 18 d) Installment Sales .. 19 4. Rescission for Operative Misrepresentation .. 19 IV. BUSINESS PRACTICES AND CONSUMER PROTECTION ACT .. 19 A. OVERVIEW OF THE ACT .. 19 1. When the Act Applies .. 19 2. Remedies .. 20 3. Other Important Aspects .. 20 B. DOES THE ACT GOVERN THE CONTRACT?

5 21 1. CONSUMER Transaction .. 21 2. CONSUMER .. 21 3. Supplier .. 21 C. DEFINING A DECEPTIVE OR UNCONSCIONABLE ACT OR PRACTICE .. 22 1. Deceptive Acts .. 22 2. Unconscionable Acts .. 23 D. REMEDIES AND SANCTIONS .. 23 1. Damages Recoverable by Consumers .. 23 2. Transaction Unenforceable by Supplier .. 24 3. Injunction, Declaration and Class Action .. 24 4. Supplier Found Guilty of an Offence Under the BPCPA .. 24 E. EFFECTIVE DATE OF THE ACT .. 24 F. LIMITATION PERIOD .. 24 G. POWERS OF THE DIRECTOR .. 25 H. COMMON UNFAIR SALES PRACTICES .. 25 1. More than One Price Tag ( Double ticketing ) .. 25 2. Advertising a Sale Price .. 25 3. Bait and Switch .. 25 4. Differences between Estimated and Actual Prices .. 26 5. Unnecessary Repairs.

6 26 6. Referral Sales .. 26 I. FALSE OR MISLEADING ADVERTISING .. 26 1. The Common Law .. 27 a) Fraudulent Misrepresentation .. 27 b) Innocent Misrepresentation .. 27 V. DIRECT SALES, FUTURE PERFORMANCE AND TIME SHARE CONTRACTS .. 28 A. DIRECT SALES .. 28 1. Right of Cancellation .. 28 B. FUTURE PERFORMANCE CONTRACTS .. 29 1. Right of Cancellation .. 30 C. TRAVEL OR VACATION CLUBS, BOOK-OF-THE-MONTH , AND RECORD CLUBS (CONTINUING SERVICES CONTRACTS) .. 30 1. Right of Cancellation .. 30 D. UNSOLICITED GOODS OR SERVICES .. 31 E. DISTANCE SALES .. 31 F. CREDIT TRANSACTIONS .. 31 1. Notice Required for Increased Interest Rates .. 32 2. Unsolicited Credit Cards .. 32 3. Prepaid Purchase Cards (Gift Certificates and Gift Cards) .. 32 G.

7 REGULATION OF PAYDAY LENDERS AND CRIMINAL RATE OF INTEREST .. 32 H. REMEDIES AND SANCTIONS .. 33 1. Fines or Imprisonment .. 33 2. Investigation and Search Powers .. 33 VI. CONDITIONAL SALES CONTRACTS AND SECURITY AGREEMENTS .. 33 A. CREDITOR S REMEDIES AGAINST THE DEBTOR .. 34 1. Seizure by the Creditor .. 34 2. Action by the Creditor .. 34 B. RESTRICTIONS ON THE CREDITOR S RIGHT TO DISPOSE .. 34 C. DISQUALIFICATION FROM SEIZE OR SUE PROVISIONS .. 34 D. THIRD PARTY PURCHASER S RIGHTS .. 35 E. APPLICATION OF PPSA TO LEASES .. 35 F. BILLS OF EXCHANGE ACT .. 35 VII. THE MOTOR DEALER ACT .. 36 A. OVERVIEW OF THE MOTOR DEALER ACT .. 36 B. MOTOR DEALER CUSTOMER COMPENSATION FUND .. 36 VIII. MISCELLANEOUS .. 37 A. CIRCUMVENTION OF DISCLAIMER CLAUSES.

8 37 1. Statutory 37 a) Retail Sales of Goods .. 37 b) Deceptive Act or 37 c) CONSUMER Transactions Generally .. 37 2. Common Law Relief .. 37 a) Clause Deemed Not to Be Part of 38 b) Misrepresentation as to the Clause s Legal Effect .. 38 c) Strict Interpretation of Clause .. 38 d) Collateral Contract .. 38 e) Inadequate Notice .. 38 B. CONSUMERS RIGHTS AGAINST CREDITORS AND DEBT COLLECTION AGENCIES .. 38 1. If the Client has Serious Debt, Inform the Client of: .. 38 2. Legislation Regulating Debt Collection .. 38 a) Bills of Exchange Act .. 39 b) Business Practices and CONSUMER PROTECTION Act .. 39 C. TELEMARKETER LICENSING REGULATION .. 39 D. REPAIRER S LIENS .. 40 E. LIENS FOR STORAGE .. 40 F. TOWED VEHICLES .. 40 G. ELECTRONIC TRANSACTIONS ACT.

9 40 11-1 CHAPTER eleven : CONSUMER PROTECTION I. OVERVIEW A. Introduction This CHAPTER provides an overview of the law of CONSUMER PROTECTION in British Columbia. The introduction includes brief explanations of the common law and statute law relating to CONSUMER contracts. The following sections then describe the statutes in some detail. The sections are necessarily brief, and while intended to give the reader an accurate general understanding of CONSUMER protections laws, do not replace a careful reading of the statutes and case law. While parts of this CHAPTER are concerned with the rights of sellers, the main thrust is to help clinicians advise consumers who want to get out of contractual obligations, enforce contractual obligations, extract damages for a breach of contract, or file a complaint with the appropriate regulator.

10 This CHAPTER should also help students determine the contractual and other obligations of the parties, and whether or not those obligations are enforceable. B. Common Law of Contracts An aggrieved party may have remedies under the common law and statute law in the absence of a contract. An action in damages for breach of contract requires only proof of a breach not proof of fault. For this reason, it is easier to enforce an obligation if a contract exists. At common law, CONSUMER transactions are subject to the basic tenets of contract law. C. Governing Legislation, Regulations, and Resources 1. Legislation and Regulations statutes provide better PROTECTION to consumers than is afforded by the common law. Since legislation takes precedence over the common law, it is crucial that students check all relevant statutes when faced with the legal matters of consumers.