Consumer Protection Act

The Consumer Protection Act¹ (CPA) applies to contracts between consumers and merchants. The term “consumer” is defined as a natural person and does not include merchants who obtain goods or services for the purposes of their business. The CPA comprises more than 350 provisions and is completed by a detailed set of regulations. It is not possible to explain here all the rights and obligations created in this legislation, but the following comments will provide a general overview.

The CPA contains provisions regarding the content of certain specific types of contracts:

• legal warranties;
• distance contracts (which includes contracts for the purchase of goods and services online);
• contracts entered into by itinerant merchants;
• contracts of credit, including high-cost credit contracts;
• long-term lease of goods;
• contracts relating to automobiles and motorcycles;
• repair of household appliances;
• contracts for the sale of prepaid cards;
• contracts relating to loyalty programs;
• contracts relating to timeshare accommodation rights;
• service contracts involving sequential performance for instruction, training or assistance, including a contract entered into with a physical fitness studio;
• prohibition/limitation of contractual stipulations under which a merchant may amend or terminate a contract unilaterally;
• obligation to indicate when a stipulation of a contract is inapplicable in Quebec because it is prohibited under a provision of the Act or its regulations;
• service contracts involving sequential performance of a service provided at a distance (alarm systems, cable, internet, cellular phones, etc.);
• contracts for the sale of an additional warranty on goods; and
• contracts entered into by debt settlement service merchants.

The CPA provides that contracts must be written in French, unless the consumer expressly requires a contract in another language. Certain contracts will have to be made in writing and comply with mandatory content imposed by the CPA and the Regulation respecting the application of the Consumer Protection Act². Also, certain contractual stipulations are prohibited, by the CPA, including:

• any stipulation whereby a merchant is liberated from the consequences of their own act or the act of their representative;
• any stipulation that obliges the consumer to refer a dispute to arbitration or that restricts the consumer’s right to go before a court, in particular by prohibiting the consumer from bringing a class action or the right to be a member of a group bringing a class action;
• a stipulation having the effect of obliging a consumer to submit a dispute to a court other than a court in the province of Quebec;
• any stipulation requiring the consumer, upon the non-performance of their obligation, to pay costs other than the interest accrued;
• any stipulation that the contract is wholly or partly governed by a law other than an act of the Parliament of Canada or of the legislature of Quebec;
• a stipulation intended to exclude or restrict the legal warranty provided for by the CPA;
• a stipulation intended to exclude or limit the obligation of a merchant or manufacturer to be bound by a written or verbal statement made by its representatives;
• a stipulation intended to exclude or limit the rights of the consumer to sue both the retailer and the manufacturer for latent defects or for the execution of the legal warranty provided for in the CPA;
• as a general rule, any stipulation indicating an expiration date on a prepaid card (or giftcard); and
• any stipulation providing that the exchange units received by the consumer under a loyalty program may expire on a set date or by the lapse of time.

A merchant who would include these stipulations in a consumer contract subject to the CPA is exposed to civil and penal recourses. The CPA also states that it is forbidden to derogate from the provisions of the CPA by private agreement and that no consumer may waive the rights granted to them by the legislation.

The CPA also contains provisions on the warranty of quality. Goods forming the object of a contract must be fit for the purposes for which goods of that kind are ordinarily used.

A whole section of the CPA pertains to fair business practices. For example, no merchant may, by any means whatsoever, make false or misleading representations to a consumer. No merchant may falsely ascribe certain special advantages to goods or services. No merchant may falsely invoke a price reduction, indicate a regular price or another reference price for goods or services. No merchant may make false representations concerning the existence, the scope or the duration of a warranty. No merchant may fail to mention an important fact in any representation made to a consumer.  No merchant may offer a gift, a prize or a rebate on any goods in connection with a contest or a draw without clearly disclosing all the terms and conditions for obtaining it. No person may make use of advertising regarding the terms and conditions of long-term lease of goods, unless such advertising states expressly that the offer concerns long-term lease and includes the particulars prescribed by regulation in the manner therein provided.

Furthermore, when advertising a sale price, merchants must ensure that the price advertised includes the total amount the consumer must pay for the goods or services, including any charges, fees or duties. However, the Quebec Sales Tax or the Goods and Services Tax, as well as duties chargeable under federal or provincial acts that must be charged directly to the consumer and remitted to a public authority under an act, may be excluded from the price advertised. The CPA prohibits charging, for goods or services, a higher price than that advertised. This has been interpreted by courts to apply to a transaction on the internet when the price at checkout is higher than the price advertised at the first step on the website.

If the merchant fails to fulfill an obligation imposed by the CPA, the consumer may demand a variety of remedies: specific performance of the obligation, authorization to execute it at the merchant’s expense, reduction of their obligations, rescission or annulment of the contract, compensatory and punitive damages. The CPA also contains penal provisions.

The Office de la protection du consommateur is the government body responsible for applying the CPA and for receiving consumer complaints. The office may institute penal proceedings against merchants who contravene the CPA, and the president of the office has the powers to investigate any matter respecting the application of the CPA or its regulations. Such person may conduct inspections and examinations in the establishments of a merchant, a manufacturer or an advertiser. The office is also responsible for issuing permits with respect to itinerant merchants, merchants who contract money loans governed by the CPA, merchants who operate physical fitness studios, as well as merchants offering or contracting additional warranties relating to an automobile or a motorcycle. The president of the office can also seek an injunction order (interlocutory and permanent) against a person who was engaged or engages in a prohibited practice or a merchant who has included or includes in a contract a stipulation prohibited by the CPA or a regulation or who failed to mention that a stipulation was inapplicable in Quebec, when they should have.