Consumer Protection from Deceptive and Unconscionable Acts (11:IV): Difference between revisions
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, 15 June 2016→F. Deceptive Practices Under the Competition Act
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== F. Deceptive Practices Under the Competition Act == | == F. Deceptive Practices Under the Competition Act == | ||
In | 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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