On June 16, 2009, Bill 60, An Act to amend the Consumer Protection Act and other legislative provisions, was tabled in the National Assembly of Québec. Summarized below are some of the more significant proposed amendments under the Bill which would have a considerable impact on how merchants and manufacturers do business with Québec consumers.
Unilateral Amendment and Cancellation by Merchant
Section 11 of the Québec Consumer Protection Act (the Act) prohibits a merchant from stipulating in a consumer contract that the merchant has the right to unilaterally decide if the consumer has failed to satisfy an obligation or that a fact or circumstance has occurred. The Bill specifies that any stipulation under which the merchant may unilaterally cancel a fixed-term service contract involving sequential performance is prohibited. If a merchant intends to cancel an indeterminate-term service contract involving sequential performance, the Bill requires that the consumer receive written notice at least 60 days before the date of cancellation if the consumer has not defaulted on his obligation under the contract. Bill 60 also provides that a merchant may include a stipulation in a consumer contract under which the merchant can unilaterally amend the contract, so long as the contract does not extend variable credit and the stipulation includes prescribed information.
The Bill imposes disclosure obligations on merchants or manufacturers before they may propose to a consumer a contract to purchase a conventional warranty. Under section 38 of the Act, the consumer must be informed orally and in writing of the nature of the warranty provided for – the goods must be durable in normal use for a reasonable length of time, having regard to their price, the term of the contract and the conditions of their use – and the existence, object and duration of any free warranty on the goods, including the manufacturer’s warranty.
Contracts Involving Sequential Performance for a Service Provided at a Distance
Division VI of the Act, which relates to contracts involving sequential performance, is re-named under the Bill to specify that this division only applies to those contracts relating to performance, training or assistance. This is because the Bill proposes to separately regulate contracts involving sequential performance for a service provided at a distance under a new Division VII (i.e., service agreements such as those for Internet, cable and cellular phones).
In addition to setting out form and content requirements for this type of contract, Division VII includes provisions requiring a merchant to disclose in the contract the total value of economic inducements provided by the merchant in consideration of the contract. The merchant must also disclose in the contract a statement that this value will be used to calculate the cancellation indemnity payable by the consumer. Further, contract renewal and cancellation are regulated under this new division. Contracts with terms exceeding 60 days may not be renewed upon expiration unless the renewal is for an indeterminate term and the merchant must provide written notice of the contract’s expiration 60 to 90 days before the expiry date. A consumer may cancel a contract involving sequential performance for a service provided at a distance at any time by sending written notice to the merchant and paying the cancellation indemnity, if applicable.
Bill 60 also requires that merchants, manufacturers and advertisers disclose the total cost of the goods or services, not including taxes, offered under a consumer contract. Further, the proposed legislation authorizes the government to establish consumer indemnification funds and allows consumer advocacy bodies to apply for injunctions. Finally, the Bill proposes to regulate prepaid cards. (For more information on the regulation of gift cards, see the article "Gift Card Update: Alberta, Nova Scotia and Québec."), The Bill also makes minor amendments to the Travel Agents Act.
The Bill is expected to be adopted before the end of the fall term or shortly thereafter in the New Year.