When a dissatisfied consumer sues a manufacturer in Ontario, the
unhappy consumer will frequently rely upon the Sale of Goods
Act and the Consumer Protection Act, 2002.
However, neither statute applies if the consumer did not purchase
the goods directly from the manufacturer. In many
cases, consumers are purchasing from retailers, not the original
manufacturer. I have defended many cases where there have
actually been four degrees of separation between the plaintiff and
the manufacturer. For example, a homeowner hires a custom
home builder, who in turn hires a sub-contractor to install a roof,
who then purchases shingles from a local hardware store that is
supplied by the shingle manufacturer.
The shingle manufacturer had no dealings with the ultimate
consumer and the consumer did not enter into a contract of purchase
and sale directly with the manufacturer. In this type of
situation, the statutory claims and protections available to
consumers through the Sale of Goods Act and the
Consumer Protection Act, 2002 do not apply according to
some court decisions interpreting those statutes, such as
Singer v. Schering-Plough Canada Inc., 2010 ONSC 42
Notably, a consumer who does not purchase directly from a
manufacturer is not left without any remedy. If the
manufacturer offered an express warranty to the ultimate user of
its goods, the warranty will provide the consumer with certain
rights and remedies, even if the consumer never read the warranty
or had knowledge of it until after a problem was discovered.
The other avenue of recourse is a lawsuit based on
negligence. There are various tort claims that such a
consumer may assert, including but not limited to the failure to
provide adequate warnings, negligent product design and negligent
It must be noted that the foregoing analysis applies solely to a
situation where a consumer chooses to commence a claim
solely against the manufacturer with whom it does not have
a contract. Another option for the consumer is to sue the
retailer for supplying defective goods. If a retailer is
sued, the retailer may bring its supplier into the lawsuit to point
the finger of blame (if there is anyone at fault) away from
itself. If the supplier is not the manufacturer, then the
supplier may also bring the person who sourced the product into the
lawsuit until the chain eventually leads back to the
manufacturer. This can make a lawsuit more cumbersome and
expensive with several parties at the table rather than just two,
however, it can be inevitable as each party in the supply chain may
have had some influence on the ultimate product and/or made
independent representations about the product.
In summary, while a manufacturer may be able to escape claims
based on the Sale of Goods Act and the Consumer
Protection Act, 2002 if the manufacturer did not deal directly
with the consumer, these statutes may be applicable if every party
in the supply chain is included in the lawsuit.
In Irwin v. Alberta Veterinary Medical Association, 2015 ABCA 396, the Alberta Court of Appeal found that the "ABVMA" failed to afford procedural fairness to a veterinarian undergoing an incapacity assessment.
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