Types of Agreements
Requirements for various types of agreements are set out in the CPA. It is recommended that you familiarize yourself with these types of agreements by reviewing Part IV: Rights and Obligations Respecting Specific Consumer Agreements.
Note: Sometimes, a consumer agreement can meet the criteria of more than one type of agreement. In such cases, your business is still expected to comply with the provisions of the CPA and its regulations of each of those agreements. The exception is in cases where the regulations of one of those agreements does not require you to follow certain provisions in the other agreement(s).
Certain kinds of agreements could apply to your business, based on the goods you offer for the type of business you are running.
The following are the most common forms of contracts:
Direct agreements:
If you sell goods or services on the road and enter a consumer’s home to sign agreements, you may need to use a direct agreement.
This is a consumer agreement that is negotiated or concluded in person, at a place other than a place of business.
Almost all goods and services that are sold in a consumer’s home require a direct agreement. This includes agreements for water heaters, home renovations and lawn maintenance services.
Keep in mind that as of March 1, 2018, certain products and services cannot be offered or sold at a consumer’s home unless the consumer initiated the transaction (for example, the consumer called or emailed your business and asked you to come to their home to enter into an agreement). Read the exceptions if you already have an agreement in place with the consumer.
For more information, see the direct agreements section of Part IV of the CPA and its regulations.
Motor vehicle repair agreements
If you own a garage that fixes cars or other vehicles, you will need to do business using a motor vehicle repair agreement and follow certain procedures.
Before you charge the consumer, you must provide a written estimate, unless the consumer declined it and instead agreed on a maximum amount they are willing to pay for the repair. Also, you cannot bill a consumer more than 10% of the estimate, or if the consumer declined an estimate, more than the maximum agreed amount.
For more information, see the motor vehicle repair agreements section of Part VI of the CPA and its regulations.
Personal development services agreements
Personal development services agreements are usually used by businesses that offer:
- training, advice or instruction in areas like health, fitness, weight loss and nutrition (the most common type of personal development services agreement is a gym membership agreement)
- modelling and talent services, including related photo shoots
- facilities for, or instruction in, martial arts, sports, dance or similar activities
For more information, see the personal development services agreements section of Part IV of the CPA and its regulations
Internet agreements
If you sell goods or services over the Internet, you may need to use an internet agreement. This is defined as a consumer agreement formed by text- based Internet communications. These include all transactions on the Internet, as long as either your business or the consumer is based in Ontario when the transaction took place.
For more information, see the internet agreements section of Part IV of the CPA mentioned above and the regulations under the Act.
Future performance agreements
If your consumer must wait to get their goods or services, with a delivery date or payment promised in the future, you may need to do business using a future performance agreement.
These agreements involve providing the goods or services, or payment, in the future or on an ongoing basis, such as for maintenance or cleaning, Internet services and streaming services.
Please note that the requirements for future performance agreements only apply where the goods or services are not otherwise specifically covered by another type of agreement. Also, when a consumer orders a product, and it is not delivered within 30 calendar days of the agreed-upon delivery date, the consumer has the right to cancel the agreement and receive a refund. If the consumer chooses to accept late delivery of the item, they lose their right to cancel the agreement and get a refund for it.
For more information, see the future performance agreements section of Part IV of the CPA mentioned above and the regulation under the Act.
Remote agreements
If you offer goods and services over the telephone or by mail, you may need to use a remote agreement which is a consumer agreement entered into when the consumer and your business are not physically present together. However, this may not be an Internet agreement.
The consumer must be made aware of necessary information before they enter an agreement with your business. Services in remote agreements can be newspaper subscriptions, moving or snow clearing agreements entered over the telephone or through the mail.
There is a requirement that the consumer receive a written copy of the agreement either within 30 calendar days of being billed for the services or goods, or 60 calendar days after the consumer enters into the agreement.
For more information,see the remote agreements section of Part IV of the CPA mentioned above, and the regulations under the Act.
Time share agreements
Time share agreements give the consumer the right to use a property on a periodic basis, when property is shared with others on the same or similar terms. The rules only apply if either the consumer or your business is in Ontario at the time of purchase. For example, vacation properties can range from resort condominiums to campground sites.
For more information, see the time share agreements section of Part IV of the CPA and its regulations.
Exceptions
Some transactions by their very nature, or if conducted by various occupations, are not covered by the CPA. Please see the list below, which outlines some of the more frequent exceptions in which your business is exempt from some parts of the Act:
- if you offer services as part of a recognized professional group or regulatory body. This would include doctors, veterinarians, architects, engineers, lawyers, or pharmacists, for example
- if you are selling your goods or services through an auction (only excepted from Part IV of the act)
- if you are selling lottery tickets or similar products and are a charitable or religious organization, you are exempt from some parts of the act
- If the goods you are selling are perishable goods and if the food is delivered to the consumer within 24 hours after it is ordered—this exception covers activities like ordering a pizza for delivery or a restaurant takeout order (only excepted from some parts of the CPA)
- regulated sectors covered under another statute
Note: For most of these special cases – such as accommodations - businesses may need a specific licence to operate. Keep in mind that the ministry can only provide information about the Consumer Protection Act, 2002, and not legal advice about your specific circumstances as a business.
If you are not sure which category best applies to your business or you require additional clarification, please call us at: