In today’s fast-paced world, businesses strive to simplify and expedite their processes. It is now commonplace to see businesses asking their customers to enter into an internet agreement for the purchase of goods or services.
However, not all businesses are aware of the requirements set out in Ontario’s Consumer Protection Act, 2002 (the “Act”), which, with certain exceptions, applies to agreements between a supplier of goods and services and an individual consumer who agrees to pay for said goods or services. The Act is designed to provide coverage to an individual that is acting for personal, family, or household purposes and is located in Ontario when the transaction takes place (a “Consumer”).
Businesses must comply with certain requirements set out in the Act if they wish to enter into a text-based internet agreement with a Consumer, provided that the Consumer’s total potential payment obligation under the agreement exceeds $50.00, excluding the cost of borrowing.
Before the Consumer enters into the internet agreement, the business must disclose the following information to the Consumer in a clear, comprehensible, and prominent manner:
- The name of the supplier of the goods or services and, if different, the name under which the supplier carries on business.
- The telephone number of the supplier, the address of the premises from which the supplier conducts business, and information respecting other ways, if any, in which the supplier can be contacted by the Consumer, such as the fax number and e-mail address of the supplier.
- A fair and accurate description of the goods and services proposed to be supplied to the Consumer, including the technical requirements, if any, related to the use of the goods or services.
- An itemized list of the prices at which the goods and services are proposed to be supplied to the Consumer, including taxes and shipping charges.
- A description of each additional charge that applies or may apply, such as customs duties or brokerage fees, and the amount of the charge if the supplier can reasonably determine it.
- The total amount that the supplier knows would be payable by the Consumer under the agreement, including amounts that are required to be disclosed under item 5 above, or, if the goods and services are proposed to be supplied during an indefinite period, the amount and frequency of periodic payments.
- The terms and methods of payment.
- The date(s) on which delivery, commencement of performance, ongoing performance, and completion of performance would occur, as applicable.
- For goods and services that would be delivered: (a) the place to which they would be delivered; and (b) if the supplier holds out a specific manner of delivery and intends to charge the Consumer for delivery, the manner in which the goods and services would be delivered, including the name of the carrier, if any, and the method of transportation that would be used.
- For services that would be performed, the place where they would be performed, the person for whom they would be performed, the supplier’s method of performing them and, if the supplier holds out that a specific person other than the supplier would perform any of the services on the supplier’s behalf, the name of that person.
- The rights, if any, that the supplier agrees the Consumer will have in addition to the rights under the Act and the obligations, if any, by which the supplier agrees to be bound in addition to the obligations under the Act, in relation to cancellations, returns, exchanges, and refunds.
- If the agreement is to include a trade-in arrangement, a description of the trade-in arrangement and the amount of the trade-in allowance.
- The currency in which amounts are expressed, if it is not Canadian currency.
- Any other restrictions, limitations, and conditions that would be imposed by the supplier.
The disclosure of this information must be available in a way that ensures that the Consumer has accessed the information and is able to retain and print it.
In addition, the business must provide the Consumer with an express opportunity to accept or decline the internet agreement and to correct errors immediately before entering into it. If the Consumer accepts the internet agreement, the business is required to deliver to the Consumer a copy of the agreement in writing within 15 days after the Consumer enters into it. The copy of the agreement must include the information required to be disclosed (see items 1-14 above), the name of the Consumer, and the date on which the agreement is entered into. The business must deliver a copy of the agreement through one of the following methods:
a. Transmitting it in a manner that ensures that the Consumer is able to retain, print, and access it for future reference, such as sending it by e-mail to an e-mail address that the Consumer has given the business for providing information related to the agreement.
b. Transmitting it by fax to the fax number that the Consumer has given the business for providing information related to the agreement.
c. Mailing or delivering it to an address that the Consumer has given the business for providing information related to the agreement.
d. Providing it to the Consumer in any other manner that allows the business to prove that the Consumer has received it.
Businesses should also bear in mind that Consumers have certain statutory rights under the Act in the context of internet agreements. Specifically, a Consumer may cancel an internet agreement at any time until 7 days after the Consumer received a copy of the agreement if: (i) the business did not disclose to the Consumer the information required to be disclosed (see items 1-14 above); or (ii) the business did not provide to the Consumer an express opportunity to accept or decline the agreement or to correct errors immediately before entering into it. In addition, a Consumer has the right to cancel an internet agreement within 30 days after the date the agreement is entered into if the business fails to deliver a copy of the agreement in the manner specified under the Act.
In sum, while internet agreements are an efficient method by which businesses can contract with Consumers, they should take appropriate steps to ensure that their implementation does not run afoul of the Act or have adverse consequences.
This blog post was written by Marina Abrosimov, a member of the Business Law team. Marina can be reached at 613-369-0363 or at marina.abrosimov@mannlawyers.com.
