Ontario Court Of Appeal in Weller v. Reliance Home Comfort
Under Ontario Consumer Protection law, in order to amend a
remote agreement, the agreement must contain either a right on the
consumer to terminate the agreement, or retain the existing
agreement. An agreement that attaches conditions to the
consumer's right to terminate if they do not agree with the
amendment, even if such conditions are reasonable (such as consumer
cannot be in default and has to pay costs), would be defective and
may not be enforceable.
Section 42(2) of General, O. Reg. 17/05 under the
Consumer Protection Act, 2002, S.O. 2002, c. 30, Sch. A
A consumer agreement mentioned in subsection (1) that provides
for amendment, renewal or extension may, in addition to being
amendable, renewable or extendable under section 41, be amended,
renewed or extended if the following conditions are satisfied:
1. The agreement indicates what elements of the agreement the
supplier may propose to amend, renew or extend and at what
intervals the supplier may propose an amendment, renewal or
2. The agreement gives the consumer at least one of the
following alternatives to accepting the supplier's proposal to
amend, renew or extend:
i. terminating the agreement, or
ii. retaining the existing agreement unchanged.
3. The agreement requires the supplier to give the consumer
advance notice of a proposal to amend, renew or extend.
(3) The amendment, renewal or extension takes effect on the
later of, (a) the date specified in the notice; and (b) the date
that is 30 days after the day on which the consumer receives the
(4) The amendment, renewal or extension does not retroactively
affect rights and obligations acquired by the consumer before the
effective date of the amendment, renewal or extension.
The agreement in this case had two conditions attached to the
consumer's ability to terminate the contract: (1) the consumer
could not be in default under the agreement; and (2) the consumer
had to pay the standard removal charges.
These conditions may well be reasonable but the Court felt that
the resulting right to terminate was not unconditional and that the
agreement therefore does not comply with s. 42 of the Regulation
and was not binding on the consumer.
In order to amend a remote agreement, it must contain either an
unconditional right on the consumer to terminate the agreement, or
retain the existing agreement. The termination right must be
unconditional. An agreement that attaches conditions to the right
to terminate does not provide the consumer with a true alternative
to accepting the amendment. Depending upon the conditions for
termination, the consumer could effectively be coerced into
accepting the proposed amendment. The Court of Appeal held that
such an interpretation would be inconsistent with the consumer
protection objective of the legislation.
The Court stated that allowing the supplier to attach reasonable
conditions would add a level of uncertainty. The consumer would
often not know for sure whether or not he or she was required to
comply with the conditions imposed by the agreement as the cost of
opting out of the proposed amendment. Such an interpretation would
encourage litigation and undermine the consumer protection
objectives of the provisions.
However, in this circumstance, the Court did invoke the proviso
in s. 93(2) of the Act allowing the consumer to be bound by the
defective agreement nonetheless, since it would otherwise be
inequitable to not have a contract in place. The Court felt that in
this case, no consumer, including the appellant, would be
prejudiced by the proposed amendment and that the application had
been brought for a collateral purpose and therefore dismissed the
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The recent decision of the Ontario Court of Appeal in BMW Financial Services Canada, a Division of BMW Canada Inc. v. McLean provides some useful insight into the relationship between automobile dealers and the financing arms of the manufacturers for whom those dealers are franchisees.
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