On December 15th 2007, new provisions concerning distance contracts, contained in the Consumer Protection Act ("CPA"), will come into force. These amendments add new requirements with regards to what are presently called remote-party contracts, which are agreements entered into between a merchant and a consumer without the parties being in each other's presence, neither at the time of the offer nor the acceptance. Hereunder is a summary of the new provisions:

  • According to the new provisions, a "distance contract" is an agreement entered into without the merchant and the consumer being in one another's presence and preceded by an offer by the merchant to enter into such an agreement. As is the case now with remote-party contracts, the law will not deal separately with Internet and telephone contracts.
  • An offer is deemed to be made if the merchant's proposal comprises all the essential elements of the intended contract.
  • The contract is deemed to be entered into at the address of the consumer.
  • Unless the consumer can ask for a chargeback, the merchant must perform its principal obligation before collecting payment from the consumer, be it total or partial. The new provisions provide for a chargeback mechanism for transactions paid for by way of a credit card. As a result, the merchant will only be able to collect payment before performance in the event that the payment is being made by credit card. This new system replaces the old bond and exemption system by which merchants were permitted to collect payment before performance of their corresponding obligations.
  • The merchant must disclose certain information before entering into a distance contract with a consumer. In the case of a written offer, the merchant must provide the information in a manner which allows the consumer to easily retain or print the information:
  • His/her name or any other trade-name under which he/she carries on business;
  • His/her address;
    • His/her telephone and fax number and email address;
    • A description of the goods or services to be the object of the contract;
    • An itemized statement with the prices of each good or service and any related fees;
    • A description, if possible, of any charges payable to a third party (custom duties, brokerage fees, etc.);
    • The total amount paid by the consumer under the contract as well as the amount of instalments, the charge applicable for the use of the goods/services and the terms of payment;
    • The applicable currency, if not Canadian dollars;
    • The date or time on which its principal obligation must be performed;
    • The mode of delivery, the name of the carrier and the place of the delivery;
    • The applicable cancellation, rescission, return, exchange and refund conditions;
    • Any other applicable conditions or restrictions.
  • Before the contract is entered into, the consumer must have the opportunity to accept or decline the proposal and correct any related errors.
  • The contract must be written and must contain the consumer's address, the date of the contract and all the information for which disclosure is required, as mentioned above.
  • The merchant must provide the consumer with a copy of the agreement within 15 days of its acceptance, in such a manner that it can be easily retained or printed.
  • The consumer may cancel the agreement within 7 days of the receipt of a copy if: (i) the information required to be disclosed was not disclosed by the merchant prior to the contract, (ii) the consumer did not have the opportunity to accept, decline or correct the proposal, (iii) the contract did not provide the required information or (iv) the merchant did not submit a copy of the contract that could easily be retained or printed by the consumer.
  • The consumer may also cancel the agreement prior to the performance of the merchant's principal obligation if this obligation is not performed within 30 days of the mentioned date, or, if no date is mentioned, 30 days following the conclusion of the agreement.
  • If the consumer wishes to cancel the contract, as mentioned above, he or she must send a notice to the merchant. The contract will be cancelled upon receipt of the notice.
  • Within 15 days of the cancellation, the merchant must completely reimburse the consumer of all amount paid including sums paid to a third party. The consumer must also return the goods to the merchant within 15 days of the cancellation. All related costs are the merchant's liability.
  • If the merchant does not reimburse the consumer within 15 days and the consumer has paid with a credit card, the consumer may request a complete chargeback from the card issuer, within 60 days following the default.

While these changes are significant when compared to the scarce framework that currently exists for remote party contracts under the CPA, they will not be unfamiliar to clients who conduct remote sales outside of Quebec. Indeed, these changes have in fact been brought in to attempt to harmonize Quebec's regulation regime with those of the other provinces who have adopted the Internet Sales Contract Harmonization Template, approved on May 25, 2001, by the federal and provincial ministers responsible for consumer affairs