- November 17, 2021
- Posted by: azimi
- Category: Case Commentary
- Consumer protection law is an important area of the law that provides minimal protections to consumers, given the inequality of power that exists between suppliers and consumers of goods and services.
- Historically, consumer protection law was a part of the judge-made common law; however, in Ontario it is now codified in a piece of legislation entitled the Consumer Protection Act, 2002 (“CPA, 2002”).
- A consumer agreement is defined in the Act as an agreement between a supplier and a consumer in which,
- the supplier agrees to supply goods or services for payment, or
- the supplier agrees to provide rewards points to the consumer, on the supplier’s own behalf or on behalf of another supplier, when the consumer purchases goods or services or otherwise acts in a manner specified in the agreement.
- A consumer transaction is defined in the Act as any act or instance of conducting business or other dealings with a consumer, including a consumer agreement.
1- When does the CPA, 2002 apply?
- The Act generally applies in respect of all consumer transactions if the consumer or the person engaging in the transaction with the consumer is located in Ontario when the transaction takes place.
- The Act does not apply in respect of,
- consumer transactions regulated under the Securities Act;
- financial services related to investment products or income securities;
- financial products or services regulated under the Insurance Act, the Credit Unions and Caisses Populaires Act, 1994, the Loan and Trust Corporations Act or the Mortgage Brokerages, Lenders and Administrators Act, 2006;
- consumer transactions regulated under the Commodity Futures Act;
- prescribed professional services that are regulated under a statute of Ontario;
- consumer transactions for the purchase, sale or lease of real property, except transactions with respect to time share agreements as defined in section 20; and
- consumer transactions regulated under the Residential Tenancies Act, 2006.
- The Act also does not apply to the supply of a public utility or to any charge for the transmission, distribution or storage of gas as defined in the Ontario Energy Board Act, 1998 if such charge has been approved by the Ontario Energy Board.
2- Consumer Rights and Warranties
- The CPA, 2002 provides consumers with certain basic rights, conditions and warranties that do not limit the rights, conditions and warranties otherwise available to them at law.
- One of the warranties is that a supplier of services under a consumer agreement is deemed to warrant that the services are of a reasonably acceptable quality.
- Another is that if a consumer agreement includes an estimate, the supplier shall not charge the consumer an amount that exceeds the estimate by more than 10%.
- The Act also supplies consumers with certain substantive and procedural rights that apply despite any agreement or waiver to the contrary.
- One of the procedural rights is that a consumer may commence an action under the Act to the Superior Court of Justice.
- One of the substantive rights is that the Act codifies the principle of interpretation called contra proferentum: any ambiguity that allows for more than one reasonable interpretation of the consumer agreement or of any information that must be disclosed under this Act shall be interpreted to the benefit of the consumer.
3- Unfair Business Practices
- The CPA, 2002 prohibits the use of unfair business practices, which include false, misleading or deceptive representations and unconscionable representations.
- It is also an unfair business practice to use his, her or its custody or control of a consumer’s goods to pressure the consumer into renegotiating the terms of a consumer transaction.
- A person who commits one of the three abovementioned acts is deemed to be engaging in an unfair business practice.
- There are many acts that qualify as a “false, misleading or deceptive representation”, which are enumerated in the Act. A few examples are:
- A representation that a service, part, replacement or repair is needed or advisable, if it is not.
- A representation that misrepresents or exaggerates the benefits that are likely to flow to a consumer if the consumer helps a person obtain new or potential customers.
- There are also many acts that qualify as an “unconscionable representation”, which are also enumerated in the Act. Some include, for example, representations where the person making the representation or the person’s employer or principal knows or ought to know:
- that there is no reasonable probability of payment of the obligation in full by the consumer.
- that a statement of opinion is misleading and the consumer is likely to rely on it to his or her detriment.
- On the occurrence of an unfair business practice in a consumer transaction, certain rights and remedies may be available to the consumer, such as rescission (or cancellation) of the contract and/or damages; however, to access these remedy, special procedures have to be followed including the giving of proper notice and the following of prescribed timelines.
4. Specific Consumer Agreements
- The Act also contains provisions for agreements that are made in specific contexts, such as time share agreements, tow and storage agreements and credit agreements.
- For example, for personal development services agreements (or PDSAs), for which payment in advance is required and the consumer’s total potential payment obligations exceeds a prescribed amount and unless an exceptions applies, there are limits such as:
- If you have a dispute regarding, or just have a question about, a consumer transaction, you are welcome to check in with us to review your matter.
- While the CPA, 2002 gives many protections to consumers, there are also procedures that must be followed to access those remedies.
- By consulting with us, we can help you to better understand your rights and remedies.
 CPA, s 1
 Ibid, s 1
 Ibid, s 2(1)
 Ibid, s 2(2)
 Ibid, s 2(3)
 Ibid, s 6
 Ibid, s 9(1)
 Ibid, s 10(1)
 Ibid, s 7(1)
 Ibid, s 7(2)
 Ibid, s 10(1)
 Ibid, ss 14(1), 15(1) and 17(1)
 Ibid, s 16
 Ibid, s 17(2)
 Ibid, s 14(2)
 Ibid, s 15(2)
 Ibid, s 18
 Ibid, s 29(1)
 Ibid, s 29(2)
 Ibid, s 30(1)
 Ibid, s 31(1)