The Consumer Protection Act, also known as the “CPA”, regulates contracts between consumers and merchants. It is a protection law that offers consumers a basic guarantee on all goods and services.
A law of public order
The Consumer Protection Act is of public order. This implies that the contract clauses between merchants and consumers cannot include special provisions that run counter to those established in the CPA. Otherwise, a consumer could easily assert his rights in a civil litigation.
Nichols v. Canada Toyota Drummondville (1982) Inc. highlights this principle and explains that the Consumer Protection Act compensates for the economic and contractual imbalance that exists in a transaction between a merchant and a consumer.
The majority of consumer contracts are membership contracts. This means that the consumer has not drafted the contract and therefore cannot change its content. The only options available to him are to accede by signing the contract or to decline.
The concept of merchant and consumer
The Consumer Protection Act applies to any contract for goods and services signed between a consumer and a merchant in the course of his business (art 2).
The Act did not carefully define the concept of merchant. We therefore generally rely on the old concept of commerciality to define what a merchant is.
The consumer, for his part, defines himself as a natural person, with the exception of a merchant who obtains a good or a service for the purposes of his business.
Protection against exemption clauses
One of the features of the CPA is the protection of consumers against unfair terms or clauses that create too much distortion to the detriment of the consumer. With this in mind, the Act prohibits exemption clauses or limited liability clauses contained in consumer contracts (art 10). This means that a merchant, under a consumer contract, cannot exclude or limit his liability due to a fault of his own or that of his representative.
Take a parcel shipping company as an example. It cannot exclude or limit its liability for lost goods or late delivery. Any clause to this effect present in the contract is deemed unwritten and would be declared inapplicable in court.
These provisions are of public order and wide-ranging. The prohibition of exclusion causes or limited liability clauses in consumer contracts is applicable for any type of damage whether material, corporal or moral, for any type of fault (light, ordinary, heavy, failure of obligation of results) regardless of whether or not the clause was made known to the consumer at the time of the contract formation or even before.
A law in favor of consumers
In summary, the Consumer Protection Act aims to enforce consumer rights. However, many provisions are ignored and this lack of knowledge often leads to their inapplicability. Yet they are fundamental to the consumer.
If you think you have been wronged in your consumer rights or if you have questions about a consumer contract, contact the Bérard Avocat law firm. As a specialist in civil and commercial litigation, he will be able to assert your rights.