Canada: Ontario Ban On Door-To-Door Agreements For HVAC Products Comes Into Effect On March 1, 2018

Last Updated: January 25 2018
Article by David Stevens

New provisions of the Ontario Consumer Protection Act will prohibit a range of door-to-door consumer transactions. The new rules, which come into effect on March 1, 2018, will make unsolicited "direct agreements" for HVAC equipment and other household appliances unenforceable. Newly-released amendments to the CPA Regulation provide details about how the promised ban on door-to-door agreements for these products will be implemented.

Background

Last year, the Ontario government passed Bill 59, titled Putting Consumers First Act (Consumer Protection Statute Law Amendment), 2017. Among the notable provisions of Bill 59 are amendments to Part IV of the Consumer Protection Act that will prohibit most "direct agreements" for prescribed products. Direct agreements are consumer agreements for goods or services where the agreement is entered into in person at a place other than the seller's place of business. Direct agreements are often referred to as "door-to-door" transactions. Currently, the only restriction on direct agreements relates to water heaters.

As we reported earlier, the government's stated intention is to replace the existing ban on direct agreements for water heaters with an updated prohibition against direct agreements for a wider range of household appliances, including water heaters, furnaces, air conditioners and water filters. As of January 2018, we now have more details about the government's plan.

The new rule

The new section 43.1 of the Consumer Protection Act stipulates that no supplier shall solicit or enter into a direct agreement with a consumer for the supply of prescribed goods or services. There is an exception where the consumer has initiated contact with the supplier and has specifically requested that the supplier attend at the consumer's dwelling for the purpose of entering into such an agreement. Simply leaving marketing materials at a customer's home is not considered "solicitation."

Importantly, any direct agreement entered into in contravention of this prohibition is "void." This includes service agreements, sales agreements and consumer leases. Goods or services provided under a "direct agreement" that is void are deemed to be unsolicited and the consumer will not be responsible for any goods received and may be entitled to a refund of amounts already paid (at least for the first year). Furthermore, "related agreements" such as a credit agreement for the purchased good or an agreement under which the consumer gives security for the performance of the obligations in the "direct agreement" will also be void.

In summary, the new section 43.1 of the Consumer Protection Act means the supplier cannot take actions to solicit, negotiate or complete an agreement for prescribed products at the consumer's home unless the consumer has requested the supplier to attend. Otherwise, the consumer may not be bound to the terms of the agreement and may also be allowed to avoid the consequences of related agreements. Clearly, some suppliers will have to update their business practices to be compliant with this new rule. At the same time, parties providing financing for affected transactions will want to confirm and ensure that their sales partners are compliant.

How the new rule will apply

The details about how the new prohibition on "direct agreements" for prescribed goods and services will be implemented are set out in recently-published updated provisions at section 35 of the CPA Regulation.

The key elements are the following: (i) the list of "prescribed goods and services" to which the new rules apply; (ii) the strict conditions setting out which consumer-initiated contacts are not subject to the new rules; and (iii) the record-keeping requirements for each customer-initiated direct agreement.

(i) Prescribed goods and services

  1. Furnaces
  2. Air Conditioners
  3. Air Cleaners
  4. Air purifiers
  5. Water heaters
  6. Water treatment devices
  7. Water purifiers
  8. Water filters
  9. Water softeners
  10. Duct Cleaning Services
  11. Any goods/services that are a combination of the above

These are the items to which the new rules apply.

Thus, while the prescriptive rules related to water heater agreements will no longer apply, they are replaced by much broader restrictions. From the list above, it can be seen that new rules relate to a wide range of household appliances currently marketed door-to-door.

(ii) Specific consumer-initiated contacts that are not subject to the new rules

There are some exceptions to the overall ban on direct agreements for prescribed products and services. Generally, if the consumer initiates contact with the supplier and asks the supplier to come to the consumer's home, then the supplier is permitted to solicit and complete an agreement for prescribed goods and services at the consumer's home. The specific applicable circumstances where direct agreements for prescribed goods and services are permitted include scenarios where:

  1. the consumer has initiated communications by mail, phone or electronic communication with a supplier and has specifically requested that the supplier attend at the consumer's dwelling for the purpose of entering into a direct agreement for the supply of prescribed goods or services;
  2. the consumer has initiated communications in person with the supplier at the supplier's place of business or at a market place, auction, trade fair, agricultural fair or exhibition and has specifically requested that the supplier attend at the consumer's dwelling for the purpose of entering into a direct agreement for the supply of prescribed goods or services;
  3. the consumer has responded to a communication initiated by the supplier, other than a communication made in person at the consumer's dwelling, or a communication made during a supplier-initiated phone call, and has specifically requested that the supplier attend at the consumer's dwelling for the purpose of entering into a direct agreement for the supply of prescribed goods or services; or
  4. a written consumer agreement between the consumer and the supplier for a prescribed good or service is in effect, and then during the course of communications between the parties the consumer invites the supplier to attend at the consumer's dwelling and agrees that the supplier may, while at the consumer's dwelling, solicit the consumer to enter into a direct agreement for the supply of prescribed goods or services.

As can be seen, these exceptions to the general ban against direct agreements for prescribed goods and services permit a seller to respond to a consumer's wish to sign a contract at his or her home, and also recognize that additional direct agreements may be completed between parties that have an existing contractual relationship.

(iii) Record-keeping requirements for each customer-initiated contract

Where a supplier enters into a direct agreement with a consumer for the supply of prescribed goods or services under one of the exceptions set out above, the supplier must maintain records of the consumer-initiated contact for three years from the date of entering into the agreement.

When the new rule will apply

The new section 43.1 of the Consumer Protection Act, along with the complementary amendments and additions to the CPA Regulation, comes into force on March 1, 2018. This means that all suppliers must adapt their practices in advance of that date. It can be expected that there will be public notice to inform consumers of the changes as they come into effect.

There may be further changes to the CPA Regulation related to permitted direct agreements for prescribed goods or services. If the model that currently applies to water heater agreements is a guide, then we may see the government prescribe the form and/or content for such agreements.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
David Stevens
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions