Consumer Protection and Home Renovations - Understanding the Contractor's Obligations

Well, if you follow my blog posts, you will probably notice a couple things. 1) It's been a darn long time since I wrote one. Guilty as charged. The commercial real estate market in Edmonton is very active and I have been blessed with a lot of business lately.

2) I have a new web site. I hope you like the looks of this site and I hope you find it serves you better. Okay, let's get into today's topic.


As the title gives away, this blog post is more residential-oriented but it is great information nonetheless so I felt an irresistable urge to post it. As consumers we are often poorly informed of our rights and obligations in certain contractual situations. we go. You may find a great portion of it in point form so I do apologize for that but there is a lot of material and point form keeps it shorter!


Fair Trading Act


The Fair Trading Act is consumer protection legislation and sets specific rules for

  • Direct Selling
  • Time Shares
  • Collection Agencies
  • Credit Reporting Agencies
  • Payday Loans
  • Auctions

    and the subject of today's talk...

  • Pre-paid Contractors


Sale of Goods Act


  • Applies to both commercial and consumer transactions
  • Implied warranty for goods that they are fit for the purpose, match the description and of mercantable quality
  • An agreement for sale of goods for over $50 is of no force and effect unless
    • it is in writing
    • full or partial payment made OR
    • some or all of the goods delivered


Okay so now that we have a basic description of both, let's look at some of the details


Over Promise and Under Deliver


There is a long list of unfair trade practices, for example

  • Undue pressure, take advantage, exaggerat, grossly overcharge, etc.
  • Over budget by $100 or 10% without express consent
  • Charging for an estimate without agreement
  • Promising completion or delivery in a time frame that cannot be achieved

Consumers may cancel without penalty in the case of an unfair trade practice


Licencing and Security Requirements


Any contractor taking deposits or progress payments must be licenced by Director of Fair Trading and must post Security with the Director. The application includes a criminal record check and a credit check. Most contractors have to deposit $25,000 with the Director


Courts have determined that soliciting business at any place other than the contractor's place of business, including discussing the scope of work, could make the contractor a pre-paid contracting business.


The FTA lays down some contract specifics also, including that "entire agreement" clauses are not enforceable and that you cannot contract out of the FTA requirements. The cotnracts must include a description of the goods or services that is sufficient to identify them.


Cancellation Rights


Everybody's favourite, the right to cancel, is addressed also. Consumers can cancel without reason up to 10 days after receiving a copy of the contract. If you do not receive the goods within 30 days of the date specified, you can cancel within one year of the contract date (unless you accept delivery). The contractor then has 15 days to refund your money and you must return the goods. Of course, your cancellation has to be in writing.

If the contractor engaged in an unfair trade practice, or wasn't licensed at contract time, if the contract was lacking required information, or if all the goods or services were not supplied within 30 days of the specified date, the cancellation rights may be extended.


Dispute Resolution


Beleive me, you don't want to go to dispute resolution. It's always better to take preventative measures up front. But if you must go, then off to Court of Queen's Bench or Small Claims Court you will go. In some cases arbitration may be appointed by the Minister, and in exceptional cases the Director of Fair Trading may take action on a complaint.


So there you have a nutshell view of the Fair Trading Act and the Sale of Goods Act. You can probably download both for free in pdf format from the Government of Alberta Queen's Printer web site. It's always good to read them over in detail...and then when you're thoroughly confused, get some good legal advice.


Thanks to Philip Carson of Miller Thomson LLP in Calgary for permission to summarize his presentation at Buildex Edmonton 2013 in this blog. This information is the author's interpretation and should not be relied upon. Always seek legal advice from a lawyer familiar with that area of law, like Philip.

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