How Consumers’ Rights Are Protected Under The Consumer Protection Act

 In Blog, Legal limitations

Have you ever made an impulsive purchase where you signed an agreement but then, shortly after, regretted your decision? As a buyer, you may have felt stuck because you already signed a contract. However, it is important for all buyers and sellers of goods and services in Ontario to realize that individuals have legal rights and recourse under the Consumer Protection Act, 2002 (the Act).

The Consumer Protection Act

The Act’s purpose is to protect consumers; it helps ensure that consumer agreements are transparent. Buyers must receive adequate information concerning transactions so that they can make informed purchasing decisions. To achieve this, the Act minimizes consumers’ vulnerability in the marketplace by legally requiring specific information be included in a consumer contract.

Consumers and suppliers cannot contract out of these rights enacted to protect consumers. No agreement or waiver may override protections under the Act. However, it is important to note that the Act does not apply to every type of transaction — this is why you must first consider whether the Act applies to your transaction in order to identify what legal rights you may have as a consumer.

When Does The Consumer Protection Act Apply?

The Act governs transactions between consumers and suppliers, and the consumer agreements that they sign. The following principles apply:

  • A consumer is an individual acting for personal, family, or household purposes.
  • Business and private transactions between individuals are not governed under the Act.
  • A supplier is a person who is in the business of selling, leasing, or trading goods or services or supplying goods or services.

The Act applies to consumer transactions where either a consumer or supplier is located in Ontario when the transaction occurs. All agreements under the Act must be made in writing, delivered to the consumer, and exceed $50.

Types of Consumer Agreements

The Act differentiates between different types of consumer agreements. The types of consumer agreements include:

  • Direct Agreement
    • Negotiated or concluded in person at a place other than a supplier’s place of business or marketplace. This includes agreements entered into at home by door-to-door salesperson, e.g. home renovations.
  • Internet Agreement
    • Formed over the internet when either the business or consumer is situated in Ontario when the transaction occurs.
  • Remote Agreement
    • Formed when the consumer and supplier are not present together. This includes agreements formed over the phone or via mail, e.g. cable TV subscription.
  • Future Performance Agreement
    • When a supplier agrees to provide services at a future date, e.g. cleaning your pool.

When Can A Contract Be Cancelled?

In some circumstances, a consumer does not have to provide a reason for cancellation if notice is given within a “cooling-off period”.

What is a cooling-off period?

A cooling-off period is a specific number of days where a consumer may cancel a purchase agreement without incurring a cancellation fee or penalty. If a cooling-off period applies, it must be stated in the written agreement.

Under the Act, all time share, personal development services, and direct agreements must have a cooling-off period of 10 days. If the contract is cancelled within this time period, a consumer is entitled to receive any money paid to date returned to them, and any associated financing agreement will also be terminated.

How A Consumer May Cancel A Contract

If it is within the cooling-off period, a consumer may provide a supplier with notice that they intend to cancel their contract. To do so, the consumer may deliver notice over the phone. However, drafting a written letter is preferable as it can later be relied upon if there is any uncertainty on whether notice was given to the supplier.

If you have questions about your rights as a consumer, supplier, or business, contact the legal professionals at Brown Beattie O’Donovan.

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