Difference between revisions of "Consumer Protection from Deceptive and Unconscionable Acts (11:IV)"

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== F. Deceptive Practices Under the Competition Act ==
== F. Deceptive Practices Under the Competition Act ==


In addition to the protections under the BPCPA, the Canadian Competition Act, RSC 1985, c C-34, proscribes various types of deceptive practices. Some common ones are discussed below: 1.More than One Price Tag (“Double Ticketing”) Shopkeepers often mark goods for sale with more than one price tag. Under the Competition Act, RSC 1985, c C-34, it is an offence for the store to charge anything but the lowest price unless the lower price has been crossed out or the new tag covers the older tag (s 54). The older  tag does not have to be unreadable; a line over it or a new tag slightly covering it is fine. However, a cashier may not cross out the older price at the cashier stand. Note that the consumer has no independent right of action. The Competition Bureau, on its website, indicates that “prosecutions under this section have rarely occurred”. 2.Advertising a Sale Price If a business advertises a sale price, it must charge that price throughout the sale period (Competition Act s 74.05). However, the advertiser may be relieved of this obligation if (1) the price was advertised in error and if the advertisement indicated prices were subject to error, or (2) the advertisement is immediately followed by a correction. Advertisers who violate this section may be subject to an administrative penalty (s 74.1). 3.Bait and Switch If a business advertises a sale, it must stock a reasonable quantity of the item (Competition Acts 74.04). The bait and switch tactic  occurs when a business advertises an item at a bargain price to attract customers but, having no intention of selling the item, does not  adequately stock it. Rather, the business intends to use sale pressure to get customers to buy other, higher-priced items. If the business does not have adequate stock of a sale item, it must issue rain cheques. Rain cheques are not required, however, if the advertisement states “while quantities last”. Advertisers who violate this section may be subject to an administrative penalty (s 74.1). A business may avoid penalties stemming from bait and switch tactics if it attempted to supply more of an item than it was able to, if demand for the item was greater than expected, or if the advertisement stated that the sale price was good “while supplies last”. G.False or Misleading Advertising All advertising, whether on radio or television, in a newspaper or flyer or posted in a store, is subject to federal and provincial laws that  prevent businesses from making false claims that may mislead consumers. The BPCPA’s prohibition against deceptive acts and practices extends to advertising, as a representation made before a sale. (s 4(2)).  Purchasers have a right to know what they are buying. If a person asks for information and the sales agent volunteers it, the information must be correct and not deceptive. However, not everything a salesperson says is a term of the contract; some comments are mere puffery. Puffery is  the sort of comment that is made to  promote a  product. Such comments are statements of opinion rather than misrepresentations of fact and are not treated as part of the contract.              An example of puffery is “It’s a great little car.”              An example of a statement of fact is “It's a 1994 Dodge.
In addition to the protections under the ''BPCPA'', the ''Canadian Competition Act'', RSC 1985, c C-34, proscribes various types of deceptive practices. Some common ones are discussed below:  
 
=== 1. More than One Price Tag (“Double Ticketing”) ===
 
Shopkeepers often mark goods for sale with more than one price tag. Under the ''Competition Act'', RSC 1985, c C-34, it is an offence for the store to charge anything but the lowest price unless the lower price has been crossed out or the new tag covers the older tag (s 54). The older  tag does not have to be unreadable; a line over it or a new tag slightly covering it is fine. However, a cashier may not cross out the older price at the cashier stand. Note that the consumer has no independent right of action. The Competition Bureau, on its website, indicates that “prosecutions under this section have rarely occurred”.  
 
=== 2. Advertising a Sale Price ===
 
If a business advertises a sale price, it must charge that price throughout the sale period (''Competition Act'' s 74.05). However, the advertiser may be relieved of this obligation if (1) the price was advertised in error and if the advertisement indicated prices were subject to error, or (2) the advertisement is immediately followed by a correction. Advertisers who violate this section may be subject to an administrative penalty (s 74.1).  
 
=== 3. Bait and Switch ===
If a business advertises a sale, it must stock a reasonable quantity of the item (''Competition Acts'' 74.04). The bait and switch tactic  occurs when a business advertises an item at a bargain price to attract customers but, having no intention of selling the item, does not  adequately stock it. Rather, the business intends to use sale pressure to get customers to buy other, higher-priced items.  
 
If the business does not have adequate stock of a sale item, it must issue rain cheques. Rain cheques are not required, however, if the advertisement states “while quantities last”.  
 
Advertisers who violate this section may be subject to an administrative penalty (s 74.1). A business may avoid penalties stemming from bait and switch tactics if it attempted to supply more of an item than it was able to, if demand for the item was greater than expected, or if the advertisement stated that the sale price was good “while supplies last”.  
 
== G. False or Misleading Advertising ==
 
All advertising, whether on radio or television, in a newspaper or flyer or posted in a store, is subject to federal and provincial laws that  prevent businesses from making false claims that may mislead consumers. The ''BPCPA''’s prohibition against deceptive acts and practices extends to advertising, as a representation made before a sale. (s 4(2)).   
 
Purchasers have a right to know what they are buying. If a person asks for information and the sales agent volunteers it, the information must be correct and not deceptive. However, not everything a salesperson says is a term of the contract; some comments are mere puffery. Puffery is  the sort of comment that is made to  promote a  product. Such comments are statements of opinion rather than misrepresentations of fact and are not treated as part of the contract.               
 
An example of puffery is “It’s a great little car.”               
 
An example of a statement of fact is “It's a 1994 Dodge.”
 
What would otherwise be puffery may constitute a deceptive act or practice under the ''BPCPA''. In circumstances where a supplier provides a laudatory description of a defective item of which he or she has specific factual knowledge and of which the potential buyer is wholly unaware, the description is not mere puffery, but rather a deceptive act. See ''Rushak'', above.
 
For credit advertising, pay particular attention to ss 59 to 64 of the BPCPA. When there is misrepresentation, a consumer may also have a cause of action at common law.
 
=== 1. The Common Law ===
 
Despite the breadth of the BPCPA,  it  does  not  provide remedies  for  all  contractual situations.Before commercial legislation (SGA) or consumer protection acts (BPCPA), the common law provided remedies for misrepresentation. a)Fraudulent Misrepresentation Fraudulent  misrepresentation  occurs  when  the  vendor  knowingly  makes  a  false statement  of  fact  that  is  material  to  the  contract  and  the  statement  serves  as  an inducement  to  enter  the  contract.  The  buyer  may  be  awarded  the  common  law remedy of rescission and can also sue for damages in the tort of deceit. Breaches of contract  damages,  such  as  the  expectation  of  profit,  are not  available,  because  a party cannot claim for the contract to be rescinded and, at the same time claim that the contract exists for the purposes of claiming damages. b)Innocent Misrepresentation An innocent misrepresentation arises when a representation of fact is false, material to  the  contract,  and  the  buyer  is  induced  to  enter  the  contract  by  the representation.  Unlike  fraudulent  misrepresentation,  though  the  representation  is not  known  to  be  false.  The  remedy,  which  is  an  equitable  remedy,  is  rescission, which  attempts  to  put  the  parties  back  in  the  position they  were  in  before  the contract.  A misrepresentation might also be considered to be a term of the contract or as a term in a collateral contract. In this situation, the client can sue for damages if the misrepresentation ends up being untrue.  For the remedy of rescission, there could be several possible bars: i)third party rights have arisen; ii)an undue delay occurred since the misrepresentation; iii)the contract has been executed (not an absolute bar);  iv)the contract has been affirmed by the aggrieved party; or  v)it is impossible for the courts to undo the contract.c)Negligent Misrepresentation Negligent    misrepresentation    operates    in    the    same    way    as    innocent misrepresentation,  but  it  arises  when  the  representation  is  made  negligently  as opposed  to  in  a  completely  innocent  manner.  As  with  innocent  misrepresentation,
11-25the  remedy  is  rescission. Hedley  Bryne  v  Heller  (1964),  AC  465  is  one  example  of  a case involving negligent misrepresentation.


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