CANADA Law and Practice Contributed by: Sylvie Rodrigue, Grant Worden, Nicole Mantini and Anne Merminod, Torys LLP
Sales of Goods Legislation in Common Law Provinces Provincial sales of goods legislation implies certain conditions into sales contracts, such as fitness for purpose and merchantable quality. • Fitness for purpose: if the buyer expressly or by implication makes known to the seller the particular purpose for which goods are required, there is an implied condition that the goods will be fit for that purpose, provided it is reasonable for the buyer to rely on the seller’s skill or judgement. • Merchantable quality: when goods are bought by description from a seller who deals in goods of that description, they must be of merchantable (ie, saleable and usable) quality, unless the buyer has examined the goods and the examination ought to have revealed the defect. Exclusion clauses limiting or excluding a party’s liabil - ity for implied conditions or warranties may be avail - able as a defence in contracts between commercial parties, depending on the province. However, provin - cial consumer protection legislation typically prevents the exclusion of implied conditions or warranties if the contract involves a consumer sale. Sales of Goods Under the Civil Code of Québec and the Québec Consumer Protection Act The Civil Code of Québec governs the sale of goods in Quebec and applies to all parties in the distribution chain (eg, manufacturers, distributors, retailers). Priv - ity of contract is not required. The Civil Code provides a warranty against latent defects that would render a product unfit for the use for which it was intended, or that would so diminish its usefulness that the buyer would not have bought it (or would have paid a lower price) had they been aware of the defect. A defect is considered “latent” if it is not apparent upon ordinary inspection and could not have been discovered by a prudent and diligent buyer. When a latent defect is identified in a good sold by a professional seller, the Civil Code presumes that the defect existed at the time of sale if it becomes apparent within a short period after delivery. This pre - sumption shifts the burden of proof onto the seller (or the manufacturer, the distributor, and the importer,
who are also bound by this warranty), who must dem - onstrate either that the defect arose after the sale or resulted from improper use by the buyer. The Consumer Protection Act also includes a warranty against latent defects, allowing consumers to seek recourse from either the merchant or the manufac - turer, unless the defect could have been discovered through an ordinary inspection. The burden of proving that the defect was discoverable at the time of pur - chase lies with the merchant or manufacturer. Once this warranty is triggered, it creates a presumption stronger than that found in the Civil Code: merchants and manufacturers are presumed to have had knowl - edge of the defect and cannot rebut that presumption. Similarly, the Consumer Protection Act introduces various legal warranties of public order, under which merchants are bound to offer goods (i) that are fit for the purposes for which goods of that kind are ordinar - ily used; and (ii) durable in normal use for a reason - able period of time. What constitutes normal use and a reasonable period of time is determined based on the good’s price, the terms of the contract, and the conditions of use of the good. Under both the Civil Code and the Consumer Pro- tection Act, subsequent purchasers of a good may benefit from the warranty against latent defects.In the event of a breach, available remedies include rescis - sion of the sale, reduction of the sale price, damages, and specific performance. In 2023, the Quebec government also became the first Canadian jurisdiction to introduce provisions pre - venting the sale of goods for which obsolescence is planned, defined as techniques aimed at reducing a good’s normal operating life. The Consumer Protec - tion Act was amended to notably include this gen - eral prohibition, along with a new warranty of good working order and a new “right to repair”, requiring manufacturers and merchants to offer replacement parts and repair services, unless such services are explicitly excluded before sale. This good working warranty sets a minimum period, varying between three and six years, during which certain commonly purchased goods ‒ such as refrigerators, dishwashers,
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