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

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 they have 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.  

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.  

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damages, such as the expectation of profit, are not available, because a party cannot claim for the contract to be rescinded and, at the same time claim that the contract exists for the purposes of claiming damages.  

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.  

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.  

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, the remedy is rescission. ''Hedley Bryne & Co Ltd v Heller and Partners Ltd'', [1961] 3 All ER 891 (HL) is one example of a case involving negligent misrepresentation.