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Lecture 6

LAW 525 Lecture Notes - Lecture 6: Consumer Protection, Negative Option Billing, Rescission

Law and Business
Course Code
LAW 525
Kernaghan Webb

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Chapter 6 - Consumer Protection Act,2002
Tuesday, October 24, 2017
12:27 PM
An Overview
On July 30, 2005 the Consumer Protection Act, with accompanying regulations, came into force.
The act contains several different themes:
o First, it modernize his basic consumer warranties and related rates, extending them to
services, and it creates a contractual level of interpretation in favor of consumers. Related
to this rule is a provision that deems the act's Rights and remedies to apply notwithstanding
any contractual waiver to the contrary.
o Second, the act consolidates provisions previously found in several different statutes
including the consumer protection act, the business practices act, the motor vehicle repair
act and the prepaid services act.
o Third, is the expansion of consumer remedies, including a potentially very affective
consumer right to credit card charge back in the event of contract cancellation. In addition
to expanding private consumer remedies, the new act gives regulatory officials in the new
Ministry of government services more comprehensive enforcement and deterrence powers.
o Constitutional Act 1867, S.92, SS.13, The Provincial Head of Power over Property and Civil
Consumer Rights
At has brought application to services and leasing transactions.
The new law reflects the fact that our economy is increasingly service-based and financed through
lease transactions as opposed to traditional forms of credit.
Specifically, the act contains a warranty of reasonably acceptable quality of services and, in
adopting the warrantees of quality and title found in the sales of good eye, extends them to leases
as well as barter transactions.
The act also contains several provisions that enhance consumer rights generally:
o First, it makes null and ineffective any contractual waiver of rights granted under the act
including, significantly, any provision that provides for arbitration in lieu of a remedy under
the act. Ambiguities in an agreement are deemed to be interpreted in favor of the
o Finally, a consumer is not required to pay for any goods or services that he or she did not
request, including those provided by way of a "material change" to an ongoing consumer
agreement, unless agreed to by the consumer. The prohibition encompasses so-called
"negative option billing" provisions.
Unfair trade practices
The act incorporates all of the provisions previously contained in the business practices act
prohibiting false, misleading, deceptive or unconscionable representations.
Remedies available to consumer seeking rectification of a merchant's unfair practice include
rescission of the purchase contract, as well as all related to consumer agreements, including credit
As well, the new consumer rights to credit card chargeback will be available.
Consumer agreements
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