November 29, 2005
Part 2 - “Should I stay or should I go?”
Part 2 - “Should I stay or should I go?”
Where you negotiate contracts affects your obligations under the new Consumer’s Protection Act
By Robert Kennaley
McLauchlin & Associates
As discussed in the September issue of Horticulture Review, the new Consumer’s Protection Act has placed new obligations on those who provide services or materials to Ontario consumers (as opposed to businesses). The scope of these obligations depends in part on the type of consumer agreement entered into. Of the many types of agreement defined under the Act, Landscape Ontario members will most frequently enter into either “Future Performance Agreements” or “Direct Agreements.” In this article, which should be read in conjunction with our September article, we address the differences between the Direct Agreement and the Future Performance Agreement. A “Direct Agreement” is negotiated or concluded in person at a place other than the supplier’s place of business or at a market place, auction, trade fair, agricultural fair or exhibition. Any agreement to supply goods or services which is nogotiated or concluded at your residential client’s home will thus be a Direct Agreement. A “Future Performance Agreement,” on the other hand, is for goods or services in which delivery, performance or payment in full is not made when the parties enter the agreement. This covers many of the contracts entered into by LO members, be they for design, construction, maintenance or future supply. Any Future Performance Agreement negotiated in the residential client’s home will also be a Direct Agreement. The Act states that, in these circumstances, the supplier will only be required to meet the obligations applicable to the Direct Agreement. Generally speaking, then, an affected member who prefers the obligations associated with the Future Performance Agreement can avoid the obligations associated with Direct Agreements by insisting that their contracts be negotiated and concluded at their own place of business, rather than at their residential client’s home. Many obligations are common to both types of agreement. Agreements for goods or services worth more than $50 must be in writing and must contain specific information, including the names and contact information for the parties, a fair and accurate description of the services, including “technical requirements, if any,” an itemized price list, payment terms and dates for delivery, commencement and completion. Future Performance Agreements also include, with respect to deliveries, “the place to which goods are to be delivered and, if the supplier holds out a specific manner of delivery and will charge the consumer for delivery, the manner in which the goods and services are to be delivered, including the name of the carrier, if any, and including the method of transportation to be used.” Also, the Act requires that Future Performance Agreements include, for services that are to be performed, “the place where they are to be performed, the person for whom they are to be performed, the supplier’s method of performing them and, if the supplier holds out that a specific person other than the supplier will perform any of the services on the supplier’s behalf, the name of that person.” These requirements do not apply to Direct Agreements. Direct Agreements, on the other hand, must include the name of the person who solicited the consumer in connection with the Agreement, as well as the names of the persons who negotiated and/or concluded the Agreement. In addition, Direct Agreements must recite, in bold type, a lengthy statement which is set out in the Act. The statement essentially advises the consumer on his or her rights under the legislation. The Act goes so far as to specify where in the Direct Agreement the statement must appear and the type size that must be used. In the case of a Future Performance Agreement, the supplier must provide the consumer with an express opportunity to accept or decline the agreement and to correct errors immediately before entering into it. Under a Direct Agreement, however, the consumer is given a 10 day ‘cooling off period,’ allowing cancellation without any reason. In addition, under a direct agreement, the consumer may cancel an agreement within one year if the consumer does not receive a copy of the agreement that meets the specified requirements. Clearly, members who work in the residential sector must review their contracts and practices to ensure compliance with the new legislation. Whether or not you should amend your practices to avoid the obligations of the Direct Agreement depends on what works best for you in your business. If it is not practical to negotiate contracts at your place of business, you may have to accept the obligations of the Direct Agreement. On the other hand, if you are concerned about ‘cooling off periods’ or about the potential for a client to cancel a long term maintenance agreement over an alleged failure to comply with the Act’s rather technical and somewhat difficult-to-understand requirements, you may wish to negotiate and conclude agreements at your own office. The above, of course, provides only an overview of some of the new statutory obligations. Members are encouraged to read the actual Act, the Consumer Protection Act, 2002, and the regulation passed thereunder, Ont. Reg. 17/05, which can be downloaded from the Ontario Government at www.e-laws.gov.on.ca
Robert Kennaley is a former landscape contractor, now practicing law with McLaughlin & Associates. He will be speaking about the implications of the Consumer Protection Act at Congress 2006 on January 11.
Where you negotiate contracts affects your obligations under the new Consumer’s Protection Act
By Robert Kennaley
McLauchlin & Associates
As discussed in the September issue of Horticulture Review, the new Consumer’s Protection Act has placed new obligations on those who provide services or materials to Ontario consumers (as opposed to businesses). The scope of these obligations depends in part on the type of consumer agreement entered into. Of the many types of agreement defined under the Act, Landscape Ontario members will most frequently enter into either “Future Performance Agreements” or “Direct Agreements.” In this article, which should be read in conjunction with our September article, we address the differences between the Direct Agreement and the Future Performance Agreement. A “Direct Agreement” is negotiated or concluded in person at a place other than the supplier’s place of business or at a market place, auction, trade fair, agricultural fair or exhibition. Any agreement to supply goods or services which is nogotiated or concluded at your residential client’s home will thus be a Direct Agreement. A “Future Performance Agreement,” on the other hand, is for goods or services in which delivery, performance or payment in full is not made when the parties enter the agreement. This covers many of the contracts entered into by LO members, be they for design, construction, maintenance or future supply. Any Future Performance Agreement negotiated in the residential client’s home will also be a Direct Agreement. The Act states that, in these circumstances, the supplier will only be required to meet the obligations applicable to the Direct Agreement. Generally speaking, then, an affected member who prefers the obligations associated with the Future Performance Agreement can avoid the obligations associated with Direct Agreements by insisting that their contracts be negotiated and concluded at their own place of business, rather than at their residential client’s home. Many obligations are common to both types of agreement. Agreements for goods or services worth more than $50 must be in writing and must contain specific information, including the names and contact information for the parties, a fair and accurate description of the services, including “technical requirements, if any,” an itemized price list, payment terms and dates for delivery, commencement and completion. Future Performance Agreements also include, with respect to deliveries, “the place to which goods are to be delivered and, if the supplier holds out a specific manner of delivery and will charge the consumer for delivery, the manner in which the goods and services are to be delivered, including the name of the carrier, if any, and including the method of transportation to be used.” Also, the Act requires that Future Performance Agreements include, for services that are to be performed, “the place where they are to be performed, the person for whom they are to be performed, the supplier’s method of performing them and, if the supplier holds out that a specific person other than the supplier will perform any of the services on the supplier’s behalf, the name of that person.” These requirements do not apply to Direct Agreements. Direct Agreements, on the other hand, must include the name of the person who solicited the consumer in connection with the Agreement, as well as the names of the persons who negotiated and/or concluded the Agreement. In addition, Direct Agreements must recite, in bold type, a lengthy statement which is set out in the Act. The statement essentially advises the consumer on his or her rights under the legislation. The Act goes so far as to specify where in the Direct Agreement the statement must appear and the type size that must be used. In the case of a Future Performance Agreement, the supplier must provide the consumer with an express opportunity to accept or decline the agreement and to correct errors immediately before entering into it. Under a Direct Agreement, however, the consumer is given a 10 day ‘cooling off period,’ allowing cancellation without any reason. In addition, under a direct agreement, the consumer may cancel an agreement within one year if the consumer does not receive a copy of the agreement that meets the specified requirements. Clearly, members who work in the residential sector must review their contracts and practices to ensure compliance with the new legislation. Whether or not you should amend your practices to avoid the obligations of the Direct Agreement depends on what works best for you in your business. If it is not practical to negotiate contracts at your place of business, you may have to accept the obligations of the Direct Agreement. On the other hand, if you are concerned about ‘cooling off periods’ or about the potential for a client to cancel a long term maintenance agreement over an alleged failure to comply with the Act’s rather technical and somewhat difficult-to-understand requirements, you may wish to negotiate and conclude agreements at your own office. The above, of course, provides only an overview of some of the new statutory obligations. Members are encouraged to read the actual Act, the Consumer Protection Act, 2002, and the regulation passed thereunder, Ont. Reg. 17/05, which can be downloaded from the Ontario Government at www.e-laws.gov.on.ca
Robert Kennaley is a former landscape contractor, now practicing law with McLaughlin & Associates. He will be speaking about the implications of the Consumer Protection Act at Congress 2006 on January 11.