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"Consumer Products in New Brunswick -- Fidem Habeat Emptor Part I:
The C.P.W.L.A. -- Its Scope and Warranties"

by IVAN F. IVANKOVICH*

(1983), 32 University of New Brunswick Law Journal 123
Reproduced with permission of the author and the UNB Law Journal.

The inability of the Sale of Goods Act to meet modern consumer protection needs prompted enactment of New Brunswick's Consumer Product Warranty and Liability Act. The new Act incorporates a comprehensive legislative scheme to deal with all aspects of consumer warranties attempting to give effect to the reasonable expectations of today's buyers and suppliers of consumer products. In this article the author provides a detailed commentary on the scope and application of the C.P.W.L.A. and critically examines the express and implied warranties it creates. The New Brunswick legislation is analyzed against the background of the general sales law which it reacts against or clarifies and in comparison with precedent and subsequent reform proposals and enactments in other jurisdictions.

Table of Contents

• INTRODUCTION

• SCOPE OF THE C.P.W.L.A.

• • I. Type of Transaction

• • • 1. Problems Under the General Sales Law

• • • 2. The C.P.W.L.A. Solution -- "Sale or Supply"

• • • • A. Conditional Sale Contracts
      • B. Contracts for Lease or Hire
      • C. Contracts for Services or Labour and Materials

• • II. Type of Product

• • • 1. "Common Use" Test
    • 2. Fixtures and Accessions

• • III. Type of Persons Protected

• • • 1. Buyers

• • • • A. The Problem -- Should There Be Full Protection For Business Buyers?
      • B. The C.P.W.L.A. Solution -- Some Protection For Business Buyers
      • C. Does The C.P.W.L.A. Go Far Enough?

• • • 2. Persons Suffering A "Consumer Loss"

• • • • A. Direct Users
      • B. Bystanders
      • C. Subordinate Suppliers

• • IV. Type of Suppliers Affected

• • • 1. Distributors

• • • 2. How Distributors Are Affected

• APPLICATION OF THE C.P.W.L.A.

• • I. Warranties

• • • 1. Express Warranties

• • • • A. Introduction

• • • • B. Problems Under The General Sales Law

• • • • C. The C.P.W.L.A. Solution -- An Expanded Concept of Express Warranty

• • • • • (i) The Parameters of Express Warranty
        • (ii) Conflict in Oral, Written and Advertising Statements
        • (iii) Scope Remaining for "Puffs" and "Sales Pitch"

• • • 2. Implied Warranties

• • • • A.Introduction

• • • • B. Warranty of Title

• • • • • (i) Introduction
        • (ii) When The Seller's Obligations Arise
        • (iii) The Limited Scope for Exclusion
        • (iv) The Consequences of Breach

• • • • • • (a) Problems under the General Sales Law --The Seller's Dilemma
          • (b) The C.P.W.L.A. Solution -- Creation of Rights to Cure and Deduct for Use

• • • • C. Warranty of Quality

• • • • • (i) Introduction
        • (ii) Eliminating S.G.A. Ambiguities and Defects

• • • • • • (a) No Sale by Description Necessary
          • (b) No Contracting Out in Consumer Transactions
          • (c) Dealer Requirement

• • • • • (iii) Clarifying the Quality Standard

• • • • • • (a) Defining the Requisite Quality
          • (b) Compliance with Mandatory Legislative Standards
          • (c) Effect of Buyer's Examination
          • (d) Used Consumer Products

• • • • D. Warranty of Fitness For Purpose

• • • • • (i) Introduction

• • • • • (ii) Clarifying the Parameters of the Fitness Warranty

• • • • • • (a) Dealer Requirement
          • (b) Retention of "Usual" Purpose Protection
          • (c) Abolition of Trade Name Proviso
          • (d) Disclosure of Purpose and Requisite Reliance
          • (e) Scope for Seller's Disclaimer

• • • • E. Warranty of Durability

INTRODUCTION

When the definitive history of New Brunswick consumer protection law is written, the first part will be devoted to the rise and fall of the apodictic doctrine of caveat emptor -- let the buyer beware. While judicial development in the interpretation of the implied conditions of merchantability and fitness for purpose under the Sale of Goods Act <1> has admittedly diminished the [124] preeminence of this once-proud doctrine, a recent legislative development has dealt it a fatal blow in New Brunswick.

When the Sale of Goods Act was originally passed by the British Parliament in 1893 it contained a number of provisions which reflected the reasonable expectations of buyers and sellers at the time. This, of course, was long before the advent of branded and nationally-advertised products, standard-form contracts containing hidden disclaimers and sophisticated distribution chains moving consumer products from manufacturer to ultimate user. It is not surprising, then, that the balance between buyer and seller which prevailed in 1893 has been substantially eroded in more recent years by the emergence of radically different methods of manufacturing, distribution and marketing and that an Act, perhaps appropriate to its former milieu, is arguably ill-equipped to meet the needs of consumer protection today. With the enactment and proclamation of the Consumer Product Warranty and Liability Act, <2> a "new deal" has been negotiated for New Brunswick consumers.

The C.P.W.L.A. re-establishes the paramountcy of the reasonable expectations of buyers and sellers for the 1980's and beyond. The basic principle embodied in this new legislation is that of fidem habeat emptor let the buyer have confidence in what sellers and suppliers say, write and advertise about their consumer products and confidence that those products will meet the reasonable expectations that have been generated in relation to quality, fitness and durability. New and potent weapons are provided through the creation of express and implied warranties to buyers and others confronted with defective and/or dangerous consumer products. But warranties are only as strong as the remedies available to enforce them and, in this respect, the abolition of privity of contract, the creation of a new remedial regime, and the imposition of strict liability of a supplier of defective products that pose a safety hazard go a long way toward providing meaningful redress.

When the C.P.W.L.A. was enacted in 1978, New Brunswick became the second jurisdiction in Canada, after Saskatchewan, <3> to deal in a comprehensive legislative scheme with all aspects of consumer warranties. The Act itself was largely based upon a warranty study initiated by the Law Reform Division of the Department of Justice in 1972. The New Brunswick Consumer Protection Project, under the direction of then-Professor Karl [125] J. Dore, released its first report in 1974. <4> Subsequent reports were released in 1975 <5> and 1976. <6> An excellent article, entitled "The Consumer Product Warranty and Liability Act," by Mr. Dore, now Director of Consumer and Corporate Affairs for the Province, appeared in the last issue of U.N.B.L.J. <7> It was exclusively descriptive in nature and provided interested parties with the benefit of a draftsman's overview of the Act and its provisions.

My purpose in this article is to provide a detailed commentary on the scope and application of the C.P.W.L.A. I propose (1) to discuss its major concepts against the background of the general sales law which the legislation reacts against or clarifies, and in comparison with precedent and subsequent reform proposals and enactments in other common law jurisdictions; (2) to provide a detailed analysis of the origin, purpose, and scope of and the interrelationship among the various sections in the legislation; and (3) to comment, where appropriate, on areas of potential difficulty in the New Brunswick formulations with particular emphasis on developments in other jurisdictions which might aid in their resolution.

In Part I of this article the scope of the consumer protection legislation, and a detailed analysis of its express and implied warranties is presented. Part II, to appear subsequently, will deal with the C.P.W.L.A. remedial regime and products liability.

SCOPE OF THE C.P.W.L.A.

Before one can fully appreciate the dramatic substantive changes which the Consumer Product Warranty and Liability Act makes to the general sales law governing the supply of consumer products in New Brunswick, it is necessary to differentiate in a comprehensive manner between the type of transactions and persons that fall outside its scope and that are, therefore, subject only to regulation by the common law and other legislation. <8> In order to accomplish this purpose, I propose to examine the type of transaction (viz. "sale or supply") and type of product (viz. "consumer product") which the Act seeks to regulate, the type of persons the Act seeks to protect (viz. buyers and persons suffering a "consumer loss"), and the type of suppliers affected by the Act (viz. "distributors") and how they are affected.

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I. Type of Transaction

1. Problems Under the General Sales Law

General sales law does not treat the distribution of goods and services within any comprehensive legislative or common law framework. Distinctions were early recognized between contracts of sale of goods and contracts for the provision of labour and materials, <9> the former subjected to the provisions of the Sale of Goods Act and, in particular, the contractual formality requirements in s. 5, the latter exempt. Further distinctions were recognized based upon the particular legal device utilized to supply goods to the user, viz. the distinction between sales and other closely related transactions (near-sales): barter <10> and hire-purchase. <11> Although a judicial tendency can be detected toward broadening the category of sale, <12> and toward extension of the principles of sales law to near-sales, <13> there are, nevertheless, obvious limits upon these judicial attempts toward harmonizing the law of sales and near-sales. The resulting divergence of applicable law can present the person supplied with defective goods considerable uncertainty in pursuing redress. <14>

2. The C.P.W.L.A. Solution --"Sale or Supply"

In responding to the question of whether New Brunswick s consumer protection legislation should be confined to contracts for the sale of goods or whether it should also apply to other contracts relating to goods, the First Report of the Consumer Protection Project <15> clearly recognized the need to remove anomalous distinctions between sales and near-sales. The efficacy of increased consumer protection would be inhibited if these anomalies were not removed and suppliers of consumer products were permitted to [127] use legal devices other than sale to accomplish the same purpose without attracting the incremental responsibilities which the new consumer protection legislation would impose. Following the recommendation of the Ontario Law Reform Commission's Report on Consumer Warranties and Guarantees in the Sale of Goods, <16> the C.P.W.L.A assimilates sales and near-sales by making the Act applicable to the sale or supply of a consumer product, <17> and defining "contract for the sale or supply of a consumer product" in s. 1(1) of the Act to mean:

(a) a contract of sale of a consumer product, including a conditional sale agreement;

(b) a contract of barter or exchange of a consumer product;

(c) a contract of lease or hire of a consumer product, whether or not there is an option to
purchase it; or

(d) a contract for services or for labour and materials if a consumer product is supplied along with the services or labour;

A. Conditional Sale Contracts

The specific inclusion of a conditional sale agreement is presumably only for added clarity. Any doubt as to whether a conditional sale is a contract of sale <18> would appear to have been resolved by the New Brunswick Court of Appeal in General Motors Acceptance Corp. of Canada Ltd. v. Hubbard. <19>

B. Contracts for Lease or Hire

Expanding the definition of "contract for the sale or supply of a consumer product" to include contracts of lease or hire now brings these categories of near-sales within the ambit of the Act. The rationale for including the hire-purchase type of contract is that such transactions are often intended to effect a sale on credit but, because of the way in which the transaction is cast, there may be no legal obligation to purchase -- a necessary incident to contracts of sale. <20> The reason, however, for including a straight lease or hire of a consumer product is less compelling because the definition does not recognize the importance of a time factor in elevating the status of a lease to that of near-sale. The warranties and remedies created by C.P.W.L.A. are equally applicable to short and long term leases [128] of consumer products. In this respect it is interesting to note that Saskatchewan took the same approach <21> as New Brunswick in refusing to adopt the Ontario Warranties Report recommendation that only leases for substantial terms be included in the definition of sale. <22> The Saskatchewan rationale, put forth by Professor Romero, was that ". . . it was considered that the non-excludable statutory warranties could be quite valuable to a person who hires a consumer product for a short period of time and suffers a substantial loss, and that the sections of the Act dealing with remedies were flexible enough to cover the problems of short leases." <23>

C. Contracts for Services or Labour and Materials

The inclusion within the definition of "contract for the sale or supply of a consumer product" of a contract for services, or for labour and materials if a consumer product is supplied along with the services or labour, serves an important purpose. It avoids the difficulty in borderline cases of applying the "substance of the contract" test <24> in order to distinguish whether the contract is one of sale of goods or one for labour and materials, a distinction which can achieve great importance. The seller's obligations under the Sale of Goods Act in respect to the merchantability <25> and fitness for purpose <26> of his goods are absolute. In the absence of an effective disclaimer clause they are not dependent upon negligence and they extend to liability for latent defects in the goods supplied. <27> In a contract for labour and materials, on the other hand, the tradesman is generally not liable in the absence of negligence on the grounds of having impliedly undertaken only to exercise reasonable care and skill in the selection of materials. <28> The consumer products supplied under this type of contract will now attract the C.P.W.L.A. warranties and remedies. This will similarly affect a contract for the supply of consumer products which are to be installed or fitted into a building or construction, a contract which is also normally regarded under the general sales law as a contract for labour and materials. <29> In these contracts the Courts have drawn a distinction between liability for loss caused by the inadequacy of the service/labour component <30> and liability [129] for loss caused by a defective product supplied under the contract. <31> Liability in the service/labour component is generally dependent upon negligence whereas liability for supplying defective goods generally is not, due to the courts' willingness to imply warranties analogous to those in sale contracts. Even though the C.P.W.L.A. preserves this fundamental distinction between the respective liabilities, two significant changes to the existing law can be detected: (1) the imposition of severe restrictions on the tradesman's ability to exclude or restrict warranties and remedies, and (2) the increased ability of the consumer to establish express terms in respect of the product component and possibly the service/labour component of the contract. Each of these will be discussed in turn.

Prior to the C.P.W.L.A., even if the Court would imply SGA-type conditions and warranties to consumer products supplied in these circumstances, it still would have been possible for the tradesman to negative such an implication or avoid its repercussions by the use of disclaimer clauses. The tradesman will no longer be able to exclude or restrict the C.P.W.L.A. warranties which will attach to the supply of the consumer product(s). <32> Though the unique C.P.W.LA. remedies are inapplicable to this type of contract, <33> and the consumer consequently relegated to the remedies normally applicable under the law for breach of contract, additional restrictions in this respect are imposed upon the tradesman. Whereas, by contract he could formerly exclude or restrict these ordinary remedies, the tradesman is now unable to do so in respect of remedies for breach of implied warranties <34> and he is only able to do so to the extent that it is fair or reasonable in respect of remedies for breach of express warranties. <35>

The second major change effected by the Act in the services/labour and materials contract involves the parol evidence rule and its applicability in determining the express terms of both the consumer product component and, possibly, the service/labour component of such contracts. While the C.P.W.L.A. as a whole applies to the type of contract under discussion, [sic] is restricted to the product supplied under the contract. <37> The potential for confusion in determining contractual terms <38> in written contracts of this [130] type is supplied by section 5 which abolishes the parol evidence rule and permits oral evidence for the purpose of establishing an express warranty. <39> The question that ultimately arises is whether parol evidence can be adduced to establish oral contractual terms relating to the services/labour component that are incompatible with those terms actually expressed in the written contract. <40> As previously indicated, the express warranties provided by section 4 are restricted to statements made "in relation to the product." Section 5 does not, it would appear, contain any such restriction in relation to permissible oral evidence. First, the section applies "when there is a written contract" and "contract" is defined in the Act to mean "a contract for the sale or supply of a consumer product", <41> which in turn is defined to include the type of contract under discussion, viz. a "contract for services or for labour and materials if a consumer product is supplied along with the services or labour." <42> Thus, section 5 permits oral evidence in this type of contract "to establish an express warranty notwithstanding that it adds to, varies or contradicts the written contract." Second, the definition of "warranty" in section 1(1) as "a term of the contract that is a promise" is not restricted to promises in relation to the consumer product which is supplied. Consequently, it is certainly open to a court to interpret the abolition of the parol evidence rule in section 5 as applying to all express statements made in respect to both aspects of the service/labour and materials contract rather than restricting application of the abolition exclusively to oral statements made in relation to the consumer product. This interpretation would avoid the difficulty of applying two different evidentiary rules to oral statements made by the tradesman in respect of the same contract.

II. Type of Product

1. "Common Use" Test

It remains now to fully discuss the type of product that is covered by the C.P.W.L.A. Because, by section 2(1), the Act is applicable to "every sale or supply of a consumer product," the definition of "consumer product" in section 1(1) is crucial to the discussion:

"consumer product" means any tangible personal property, new or used, of a kind that is commonly used for personal, family or household purposes;

The test for a consumer product adopted by the Act is not the use of the specific product purchased, but, rather, the common use for that kind of [131] product. Under this test, a product may fall within the Act if it is commonly used for personal, family or household purposes notwithstanding that the aggrieved buyer is purchasing for a commercial purpose. By adopting the "common use" test the Act is clearly attempting to avoid the difficulties associated with more subjective formulations. <43> The definition adopted also makes it immaterial with respect to the general application of the Act whether the seller knows or is in a position to know the particular use to which the buyer proposes to put the consumer product. <44>

The "common use" test is recurrent in consumer protection legislation. <45> The definitions in both the New Brunswick and Saskatchewan <46> Acts were adopted in part from the definition of "consumer product" in the Magnuson-Moss Warranty Act <47> as "any tangible personal property which is distributed in commerce and which is normally used for personal, family, or household purposes . . ." In this respect, it is instructive to note that the U.S. Federal Trade Commission has issued a final interpretation <48> of what it considers to be the proper standard in applying the "normal use" test to determine whether a given product is a consumer product:

This means that a product is a "consumer product" if the use of that type of product is not uncommon. The percentage of sales or the use to which a product is put by an individual buyer is not determinative. For example, products such as automobiles and typewriters which are used for both personal and commercial purposes come within the definition of consumer product. Where it is unclear whether a particular product is covered under the definition of consumer product, any ambiguity will be resolved in favor of coverage. <49>

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It would appear to be obvious that under the definition of "consumer product" in the C.P.W.L.A. any item which has gained a degree of popularity with the general public, although it may be commonly used for commercial purposes, will easily be classified as a consumer product and its sale or supply will be regulated by the provisions of the Act. Examples of this type of product abound: four-wheel drive vehicles, typewriters, small power-tools, photographic film are merely illustrative. To some, it might appear equally obvious that an item such as a farm tractor is not encompassed within the C.P.W.L.A. definition. The decision in Greene v. D.R. Sutherland Ltd. et al. <50> illustrates the fallacy of such reasoning and stresses the importance of considering the question as one of fact, being dependent upon all of the circumstances. In that case, the plaintiff had purchased a used International Tractor equipped with a front end loader, front blade and bucket from the defendant company. Mr. Justice Creaghan did not accept the general proposition that a farm tractor could not be a "consumer product":

It was argued by Mr. Cooper that the Act did not include term tractors. I cannot accept such a general submission. The evidence of the plaintiff establishes that he has owned tractors for a number of years, so have some of his neighbors including the defense witness Stuart Wall. Tractors are commonly used to plow long private driveways, for assistance in private wood cutting and personal farming. The use depends on various circumstances, where a person resides, that is in a rural as opposed to an urban area, whether it is in a snow belt and many other factors. I am satisfied that some tractors are of a kind now commonly used for personal purposes, even though the same unit is manufactured for and used for industrial or public as opposed to personal purposes. As stated it is a question of fact . . . <51>

In the result, however, it was held that the C.P.W.L.A. was not applicable to the plaintiff's purchase because the farm tractor in question was not a "consumer product" within the test cited. The fact that the particular model purchased by the plaintiff was more powerful by fifty percent and substantially larger and heavier than the usual farm tractor was, it is submitted, determinative of the issue.

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2. Fixtures and Accessions

Some of the recent consumer protection legislation makes specific provision in the definition of "consumer product" for potential difficulties occasioned by the law of fixtures <52> and/or accessions. <53> The definition of "consumer product" in the Saskatchewan Act, for example, <54> includes any goods ordinarily used for personal, family or household purposes that are designed to be attached to or installed in any real or personal property, whether or not they are so attached or installed." <55> According to Professor Romero, these words were included in the definition in order to preserve the rights of subsequent owners of consumer products:

Under section 4 of the Act the rights of the original consumer who buys a consumer product from a retail seller are transferred to subsequent owners of that product. For example, let us assume that A buys an air conditioner from a retailer. Soon thereafter A sells it to B and later the air conditioner turns out to be defective. Under the Act, B, the subsequent owner, can sue the retail seller for breach of the statutory warranties of fitness for purpose and acceptable quality, as long as there was a breach of those warranties in the sale by the retailer to A. What would be the position if A had attached the air conditioner to his house and then had sold the house to B: Under the present law of fixtures once a chattel is permanently attached to realty in order to improve such realty, the chattel ceases to exist as a separate entity so that when B buys the house, legally speaking he does not acquire a separate air conditioner and without the provision under discussion, B would not be a "subsequent owner" of the air conditioner protected by the section. As section 2(e)(i) states that the definition of "consumer product" "includes any goods . . . that are designed to be attached to or installed in any real or personal property, whether or not they are so attached or installed" the common law of fixtures is overruled so that a consumer product continues being one even after it is permanently attached to real property. <56>

An inclusion, similar to that of Saskatchewan, in the C.P.W.L.A. definition of "consumer product" would provide a higher degree of clarity, but whether such a change is actually necessary to avoid fixture or accession problems [134] is questionable. In order to illustrate, let us continue further with Professor Romero's example where A has sold the house (including the air conditioner) to B. In order to take advantage of Saskatchewan's statutory warranties of fitness for purpose and acceptable quality, B, as the subsequent owner of the air conditioner, must be a person who derives his "property or interest in the [consumer] product from or through the consumer A." <57> In the absence of the specific inclusion in the Saskatchewan definition of "consumer product", B would be faced with a difficult, if not insurmountable, hurdle. If the relevant time for B's acquisition of any Saskatchewan warranty rights is at the time of his contract with A, it could be argued that by that time the consumer product (air conditioner) ceased to exist as a separate entity and, as a result, B merely acquired an interest in real property from A, thereby preventing entitlement to the protection afforded a "subsequent owner" in the Saskatchewan Act. Notwithstanding the absence of a similar inclusion in the New Brunswick definition of "consumer product", a subsequent owner would, it is submitted, be at least equally protected. This is because of section 23 of the C.P.W.L.A. which abolishes horizontal and vertical privity of contract, <58> and allows anyone who suffers a consumer loss to sue any seller who is in breach of any C.P.W.L.A. warranty, notwithstanding that the person who suffers the consumer loss is not a party to the contract which the seller has breached. Again utilizing the foregoing example, B, in New Brunswick, would be able to sue A's retailer for breach of that retailer's contract with A, viz. the C.P.W.L.A. warranties of fitness for purpose <59> and quality <60> which were implied in the contract between A and his retailer. Even if B, at the time of his contract with A, acquired only an interest in real property, his rights against A's retailer, unlike the position in Saskatchewan, are not dependent upon whether or not B acquired a "consumer product" at the time of his contract with A. Rather, applying section 23, they merely depend upon whether or not B has suffered a "consumer loss" because of the retailer's breach of warranty in his contract with A. "Consumer loss" is broadly defined, inter alia, as "a loss that a person does not suffer in a business capacity." <61> It is submitted, therefore, that while the inclusion of words in the definition of "consumer product" to avoid the potential difficulties of fixtures is essential in some jurisdictions, their inclusion in the C.P.W.L.A. would be surplusage and could only be justified from the standpoint of added clarity. The same arguments apply, mutatis mutandis, to the problem of accessions.

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III. Type of Persons Protected

1. Buyers

A. The Problem -- Should There Be Full Protection For Business Buyers?

One of the primary purposes of the New Brunswick Act was to regulate the express and implied warranties given to individuals with respect to the goods they acquired for personal use. Different legislative schemes could have been utilized to narrow the application of the C.P.W.L.A. in order to accomplish this purpose. As an obvious example the legislation could have been restricted exclusively to "consumer sales" and, by use of definitions, protection could have been denied to the business buyer. <62> The difficulty with this type of legislative approach, as noted, <63> is that in the purchase of consumer products by businessmen, particularly small businessmen, there often exists the same inequalities in expertise and bargaining power as are found in the case of "traditional" consumers and transactions involving "consumer" goods in the narrow sense.

B. The C.P.W.L.A. Solution -- Some Protection For Business Buyers

The C.P.W.L.A. solution to this problem is novel and it is an accurate statement to suggest that the transactional scope of the Act does not coincide with the "consumer transaction" of common parlance. Application of the Act extends to every transaction for the sale or supply of a consumer product. <64> The general application of the Act, therefore, focuses on the nature of the product as opposed to the nature of the transaction. The extent of protection afforded by the Act to the purchaser, however, is dependent upon the nature of the transaction and the type of loss suffered by the purchaser of the consumer product. Some explanation is in order.

Clearly, when the "traditional" consumer purchases a consumer product, the C.P.W.L.A. applies and the full protection of the warranties and remedies contained in the Act is extended to the purchaser. When a businessman, <65> on the other hand, purchases a consumer product, it is necessary to examine the capacity in which he purchased the product and the type of loss which he suffered in order to determine the extent of C.P.W.L.A. [136] protection. It is, of course, obvious that if a businessman purchases a consumer product in his private capacity for his personal use, his position is fully equated with that of the "traditional" consumer and he is entitled to the full protection of the Act. What is not so obvious is that limited protection is given to the businessman who purchases a consumer product in the course of a business. Initially, it is important to recognize that, without more, all C.P.W.L.A. warranties are fully applicable. In this case, however, the contract may expressly exclude or restrict any of these warranties or the remedies for breach thereof. <66> But, at the same time, it is important to note that section 26 of the Act provides that any such exclusion or restriction shall be "ineffective with respect to any consumer loss for which the seller would be liable if no such agreement had been made." Consumer loss, as noted previously, is defined in the Act to include, inter alia, "a loss that a person does not suffer in a business capacity." The end result, therefore, is that a businessman who purchases a consumer product in the course of his business and who, in using the product, suffers a loss in his private capacity is as fully protected, subject to the difference in applicable remedies, as the "traditional" consumer. Finally, where the businessman purchases a consumer product, an automobile for example, partly for his own use and partly for use in his business, he does not purchase the automobile "in the course of a business" within the meaning of the Act providing he acquires it "primarily for use of personal, family or household purposes. <67> In this case, the position of the business buyer may be fully equated with that of the "traditional" consumer. Of course, as is discussed later, a businessman who purchases a consumer product for resale and who suffers a consumer loss at the instance of his purchaser retains his right of recourse against prior suppliers.

C. Does The C.P.W.L.A. Go Far Enough?

The Consumer Protection Project recognized the importance of identifying the type of person who is in need of consumer protection in wider terms than the "traditional" consumer, <68> and, indeed the transactional scope of the C.P.W.L.A. encompasses much more than the "traditional" consumer purchase. But does the legislation go far enough? The Act extended only very limited protection to purchasers buying other than for private use or consumption. The sale of an automobile to a solicitor for exclusive use in his practice or the sale of an electric typewriter to a small businessman primarily for office use is, I submit, indistinguishable as a matter of equity and common sense from a sale to a private purchaser. <69> Yet the C.P.W.L.A. [137] extends only limited protection to such buyers. Similarly, a purchaser engaged in a business may purchase consumer products not for the purpose of resale or processing but for a purpose completely incidental to the carrying on of the business (eg., for lighting or heating purposes). These kinds of situations, it is submitted, are really indistinguishable on any reasonable grounds from those involving "private" use of the consumer product in question. Yet, again, the Act appears to provide only limited protection to purchasers in these circumstances if the loss suffered is categorized as a loss suffered in a business capacity.

In addressing the issue of the extent of protection that should be afforded the business buyer, an equally anomalous situation is presented by the acquisition of consumer products by many farmers and fishermen for agricultural or fishing purposes. They, too, receive only the limited protection afforded to the buyer who buys in the course of a business under the C.P.W.L.A. It is interesting to note that the Saskatchewan Act has accorded full protection to such purchasers.<70> Certain reasons have been cited <71> why the inclusion of this protection for farmers and fishermen under the Saskatchewan statute was considered desirable from a policy standpoint: (1) the fact that Saskatchewan was an agricultural province and farmers formed a significant portion of the consuming public, and (2) the fact that many farmers and fishermen were in substantially the same position as more traditional consumers in their capacity to judge the quality of agricultural and fishing products. This legislative rationale would be equally applicable in supporting an extension of C.P.W.L.A. protection to New Brunswick's farmers and fishermen.

2. Persons Suffering A "Consumer Loss"

An examination of the type of persons protected under the Act would be incomplete without a preliminary reference at this point to the pervasive effect brought about by section 23 and the fundamental changes it injects into the doctrine of privity of contract. <72> As a result of this and other sections, C.P.W.L.A. protection extends far beyond the realm of traditional buyers of consumer products. Three additional categories of persons can, in appropriate circumstances, claim protection: (1) direct users of defective consumer products, (2) bystanders affected by another's use of defective consumer products, and (3) subordinate suppliers of defective consumer products.

[138]

A. Direct Users

Section 23 abolishes "vertical" and "horizontal" privity of contract rules. Thus, whenever a seller is in breach of a C.P.W.L.A. warranty, any user of the consumer product who suffers a reasonably foreseeable consumer loss can now recover damages against the seller for his breach of contract, even though that user was not a party to it. Any category of direct user will qualify for section 23 protection for his reasonably foreseeable consumer loss as long as there was, at some point in time, a contract for the sale or supply of a consumer product and a seller thereunder who was in breach of a C.P.W.L.A. warranty. Thus, protection is extended, inter alia, to such individuals as donees, borrowers, and subsequent purchasers from the original buyer. Where the user is unable to satisfy one of the prerequisites for section 23 protection (for example, the recipient of a free manufacturer's sample), he may, nevertheless, be entitled to the product liability protection given by section 27. That section renders any supplier of a consumer product strictly liable <73> for any reasonably foreseeable consumer loss where the product supplied "is unreasonably dangerous to person or property because of a defect in design, materials or workmanship." Section 27 protection, unlike that afforded under section 23, is not dependent upon the existence at any time of a contract. <74>

B. Bystanders

The protection extended by section 23 is wide enough to encompass injuries suffered by a bystander as a result of another person's use of a defective consumer product. The bystander's loss would certainly qualify as a "consumer loss" within the broad definition under the Act. <75> The bystander would then only have to establish that at some point in time there was a contract in existence for the sale or supply of the consumer product, that the seller was in breach of a C.P.W.L.A. warranty in that contract, and that the consumer loss which he suffered was reasonably foreseeable. Consider the case of a bystander, for example, who is injured by a private motorist whose automobile went out of control because a defective tire, which the motorist had recently purchased, sustained a blowout. In addition to any tort remedies available to the injured bystander, contractual protection might also be extended, by virtue of section 23, in these circumstances. Assuming the motorist purchased his tires from a retailer and the C.P.W.L.A. warranties, therefore, were applicable to that contract, the retailer may be in breach of the implied warranties of fitness for purpose, <76> quality <77> and durability. <78> The C.P.W.L.A. would afford the [139] innocent bystander a contractual course of action for breach of warranty against the retailer or, in appropriate circumstances, against superordinate suppliers. When one considers that this warranty liability is strict, the additional protection given the bystander by section 23 becomes truly significant. Also, in the unusual circumstance where no contract for the sale or supply of a consumer product can be established, the bystander might nevertheless, fall within the product liability protection of section 27 if he can establish that the tires were "unreasonably dangerous" because of a defect in design, materials or workmanship.

C. Subordinate Suppliers

The above hypothetical clearly illustrates the need for the C.P.W.L.A. to extend protection to all subordinate suppliers in the distribution chain to enable them to recover indemnification in respect of these broad consumer loss liabilities from their prior suppliers, hereinafter referred to as superordinate suppliers. Only in this way can the statutory liability for the consumer loss be traced back to the ultimate source. By a combination of the definition of "consumer loss <79> and the inability of superordinate suppliers to contract out of liability to subordinate suppliers for these losses, <80> the Act enables subordinate suppliers in the distribution chain, as a general rule, to be fully indemnified. Thus, in the foregoing example, if the bystander was successful against the retailer under section 23 for breach of an implied warranty, the retailer would have recourse against any superordinate supplier in the distribution chain and likewise for each subordinate supplier until, in the normal case, the loss was ultimately traced back to its source, viz. the manufacturer. In this respect, it is important to remember that even if all contracts superceding the retail purchase of the tire by the motorist contained exclusionary clauses permitted by section 26 the exclusions would generally be ineffective because each subordinate supplier would have suffered a "consumer loss" within the C.P.W.L.A., viz. "a loss that a person suffers in a business capacity to the extent that it consists of liability that he or another person incurs for a loss that is not suffered in a business capacity. <81>

IV. Type of Suppliers Affected

1. Distributors

While the definition of "seller" <82> in the C.P.W.L.A. would appear to encompass all persons contracting to sell or supply consumer products, it [140] is important to note that the Act itself does not apply to any particular contract for the sale or supply of a consumer product unless the seller is also a distributor of consumer products of that kind or holds himself out as such. <83> "Distributor" is defined in section 1(1) of the Act as follows:

"distributor" means a person who supplies consumer products as part of his regular business and, without limiting the generality of the foregoing, includes a producer, processor, manufacturer, importer, wholesaler, retailer or dealer.

The effect of these provisions is to exclude strictly private sales as well as analogous commercial situations where the seller is selling a consumer product outside the course of his regular business, eg., an automotive dealership selling its showroom carpeting, or an accounting firm <84> selling its office typewriter or microwave oven.

It should be pointed out that the Act goes further than simply exempting such transactions from its scope. In addition, private sellers, in the absence of fraud, are protected from indemnification claims other than those involving defective title. <85> According to the draftsman, the purpose of this added protection is to prevent a dealer who is buying goods from a private seller to obtain an indemnity from him for any warranty liability that the dealer would incur to his own buyer when he resells. <86>

A 1975 Massachusetts case best illustrates the potential of section 3. In Best Buick, Inc. v. Welcome, <87> the consumer purchased a new Buick automobile and traded in his "1970 Mercedes-Benz". This trade-in vehicle was described by the consumer, in good faith, as a 1970 Mercedes-Benz and, indeed, he had himself purchased the car as a 1970 model, and all of his papers had listed it as such. In actual fact the car was a 1968 model and the dealer was successful in recovering damages for breach of warranty to reflect the difference in price between the two models. The opposite result will now definitely occur in New Brunswick. <88>

[141]
It should also be noted at this point that because of the C.P.W.L.A., definitions of "distributor" and "seller," and more particularly their definitional reliance upon the supply aspect, many New Brunswick auctioneers may find themselves subject to increased liabilities under the Act. <89> Contracts made by auctioneers who regularly sell consumer products of a particular kind as well as those who sell different kinds of consumer products on an on-going basis, under circumstances that imply the likelihood of repetition with regard to the products in question, will attract C.P.W.L.A. express and implied warranties. In this event, the auctioneer will find his ability to exclude or restrict those warranties that do arise, or the remedies for their breach, radically different from what was available to him under the general sales law. <90> His position is rendered precarious when one further considers the auctioneer's inability to extract an effective indemnification from private sellers. <91>

2. How Distributors Are Affected

A problem that has to be addressed in any legislative scheme of consumer protection granting increased rights to buyers is how to structure the corresponding increase in sellers' obligations and potential liabilities. Common sense and fairness dictate that a subordinate supplier, such as a retailer, should not have to shoulder all the increased responsibilities to the consumer while certain of his superordinate suppliers are permitted to insulate themselves from liability by recourse to the privity of contract doctrine <92> or through the effective use of disclaimer clauses. <93>

The foregoing problem has been addressed in the C.P.W.L.A. through a policy of tracing legal liability directly or indirectly back to the source of the problem. The modifications to the privity of contract doctrine brought about by sections 23 and 27 of the Act <94> provide the consumer in many cases with direct recourse against any superordinate supplier in the dis-[142]tribution chain. In any case where the consumer has initiated action solely against a retailer for breach of C.P.W.L.A. warranty, the liabilities of superordinate suppliers may be indirectly affected. In this respect there is a key distinction between the express and implied warranties created by the Act.

Each seller is responsible for the express warranties which he gives or is deemed by section 4 to have given to the buyer. It may be that subordinate suppliers can establish equivalent express warranties in contracts with their superordinate suppliers: a statement, for example, in respect of quality printed on the carton of the consumer product. <95> In these cases the ultimate responsibility is traced back to the original source of the warranty because all subsequent contracts in the distribution chain contain the same express warranty, <96> and the remedies <97> for its breach cannot be excluded or restricted by superordinate suppliers unless it is fair and reasonable to do so. <98> On the other hand, most express warranties will be given by a seller exclusively to his buyer: an oral statement, for example, in answer to a buyer's question. In these circumstances the resulting C.P.W.L.A. express warranty would only extend to that particular contract and, of course, the liability of superordinate suppliers would be unaffected, without more, by breach of that express warranty.

In contrast, all suppliers in the distribution chain will be affected by the implied warranties created by the C.P.W.L.A.. A scheme of standardized and parallel obligations in respect of the statutorily-implied warranties was seen as essential to furthering the "tracing" policy adopted by the C.P.W.L.A. <99> While section 26 permits superordinate suppliers to exclude or restrict any C.P.W.L.A. implied warranty or remedy <100> for its breach, the exclusion or restriction is rendered ineffective regarding damages which the subordinate seller has incurred because of a "consumer loss." This effectively enables the retailer, who incurs liability to a consumer for breach of a C.P.W.L.A. implied warranty, to trace back and recover indemnity from his supplier, on the same basis, notwithstanding any purported section 26 restrictions or exclusions in the sales documentation. This supplier, in turn, can trace back and recover indemnity from his supplier etc., with the responsibility ultimately being traced back to the superordinate supplier who is the source of the problem.

Footnotes

*B.A. (Canisius), M.B.A. (Wisconsin), LL.B. (U.N.B.). Associate Professor, Department of Industrial and Legal Relations, Faculty of Business, University of Alberta.

<1> R.S.N.B. 1973, c. S-1 as am., s. 15. Hereinafter the Act may be referred to as the S.G.A.

<2> R.S.N.B. 1978, c. C-18.1, proclaimed effective January 1, 1980 except s. 6 which was proclaimed effective January 1, 1981, as am. S.N.B. 1980, c. 12. Hereinafter the Act may be referred to as the C.P.W.L.A.

<3> The Consumer Products Warranties Act, S.S. 1976-77, c. 15 now R.S.S. 1978, c. C-30 as am., proclaimed effective November 6, 1977 except ss. 4(1), 8, 9, 10, 13(3), 14(1), (2), 20(1), 24, 25, 26, 29, 36 proclaimed effective October 31, 1981. Other provisions contained in S.S. 1980-81, c. 18 and S.S. 1979-80, c. 17 proclaimed in force effective October 31, 1981: ss. 16(2), 17.1, 34(3). Subsection 7(2), which has never been proclaimed in force, was repealed and replaced by S.S. 1979-80, c. 17, s.4 effective on proclamation and unproclaimed as of November 1, 1982. Hereinafter the Act may be referred to as the Saskatchewan Act.

<4> First Report of the Consumer Protection Project: Consumer Guarantees in the Sale or Supply of Goods (Department of Justice, Law Reform Division New Brunswick, 1974). Hereinafter this report may be referred to as the First Report.

<5> Second Report of the Consumer Protection Project: Consumer Guarantees for Automobiles and Mobile Homes (Department of Justice, Law Reform Division New Brunswick, 1974).

<6> Third Report of the Consumer Protection Project: Volume 1: Sale of Goods (Concluded) (Department of Justice, Law Reform Division New Brunswick, 1976).

<7> Dore, "The Consumer Product Warranty and Liability Act," (1982) 31 U.N.B.L.J. 161.

<8> It should be noted at this point that the C.P.W.L.A. is not a self-contained code covering all the law dealing with the sale or supply of consumer products. Rather the C.P.W.L.A. rights and remedies are additional to any other existing rights and remedies unless expressly or impliedly inconsistent therewith: see s. 28. In the event of conflict, the C.P.W.L.A. rights and remedies will prevail: see s. 2(4).

<9> See Clay v. Yates (1856), 1 H.&N. 73, 156 E.R. 1123; Robinson v. Graves, [1935] 1 K.B. 579 (C.A.). See also Brunswick Glass Co. Ltd. v. United Contractors Ltd. (1975), 12 N.B.R. (2d) 631 (Co. Ct.) where a contract for custom-made electric doors for a retail store was held to be a contract for labour and materials rather than a contract of sale of goods.

<10> See Harrison v. Luke (1845), 14 M.&W. 139, 153 E.R. 423. See also Atiyah, The Sale of Goods 6th ed., 1980), at 5-6.

<11> See Helby v. Matthews, [1895] A.C. 471 (H.L.).

<12> See Messenger v. Greene, [1937] 2 D.L.R. 26 (N.S.S.C.) where the plaintiff was a storekeeper who agreed to supply provisions to the defendant on a running account basis in return for quantities of pulpwood. The exchange was categorized by the Court as back-to-back sale transactions with a mutual set-off of the two prices.

<13> In Young & Marten, Ltd. v. McManus Childs, Ltd., [1969] 1 A.C. 454, the House of Lords stressed the undesirability of drawing unnecessary distinctions between contracts of sale and contracts for labour and materials with regard to the implied duties of the supplier.

<14> Of particular concern within the consumer context would be divergence in the content of any implied terms applicable to the goods supplied and the rules governing payment and remedies on default.

<15> Supra, footnote 4 at 204.

<16> Department of Justice, Toronto 1972 (hereinafter referred to as the Ontario Warranties Report) at 26.

<17> S. 2(1).

<18> See Kozak v Ford Motor Credit Company and J. and D.'s Used Cars Ltd., [1973] 3 W.W.R. 1; (1971), 18 D.L.R. (3d) 735 (Sask. C.A.).

<19> (1978), 87 D.L.R. (3d) 39 (N.B.C.A.).

<20> See Helby v. Matthews, supra, footnote 11, where it was held that a transaction in which the seller was not obliged to sell and the purchaser to purchase did not constitute a sale even though the intent of the transaction was to effect a sale on credit.

<21> Saskatchewan Act, supra, footnote 3, s. 2(m)(ii).

<22> Supra, footnote 16, at 26.

<23> Romero, "The Consumer Products Warranties Act," (1978-79) 43 Sask. L. Rev. 81 at 114.

<24> Robinson v. Graves, supra, footnote 9. See also Preload Co. of Canada Ltd. v. City of Regina (1958), 24 W.W.R. 443, 13 D.L.R. (2d) 305; affirmed [1959] S.C.R. 801, 20 D.L.R. (2d) 586.

<25> S.G.A s. 15(b).

<26> S.G.A. s. 15(a).

<27> See Godley v. Perry, [1960] I W.L.R. 9 (H.L.). See also McMorran v. Dominion Stores Ltd. (1977), 14 O.R. (2d) 559, 74 D.L.R. (3d) 186 (Ont. H.C.).

<28> See Atiyah, supra, footnote 10, at 16. Cf. Dodd and Dodd v. Wilson and McWilliam, [1946] 2 All E.R. 691 (K.B.D.).

<29> See Young & Marten Ltd. v. McManus Childs Ltd., supra, footnote 13.

<30> See Brunswick Construction Ltee. v. Nowlan et al. (1974), 8 N.B.R. (2d) 76; 49 D.L.R. (3d) 93 (S.C.C.).

<31> See Hart v. Bell Telephone Company of Canada Ltd. (1979), 26 O.R. (2d) 218 (Ont. C.A.).

<32> S. 24.

<33> S. 13(b).

<34> S. 24.

<35> S. 25(1). It is important to note that this result is brought about because the remedies ordinarily available under the general law are deemed by s. 13 to be " remedies provided by this Act." As such, they are subject to the restrictions imposed by s. 24.

<36> See, for example, s. 4(1) and ss. 8-12.

<37> S. 1(l) definition of "product".

<38> There is, of course, no corresponding confusion in regard to the available remedies for breach of a warranty whether related to the consumer product or the services/labour component as the unique C.P.W.L.A. remedies are inapplicable in either case: see s. 13. Presumably the common law and S.G.A. rules will govern the buyer's remedies and in this respect it should be kept in mind that "warranty" is used in s. 13 in the wider sense of "term" pursuant to the definition in s. 1(1), thereby encompassing both conditions and warranties.

<39> For the text of s. 5, see infra, accompanying footnote 141.

<40> This problem is avoided in the Saskatchewan an Act by defining "sale" in s. 2 as including this type of contract and by deeming in s. 8, inter alia, "any promise. . . relating to the sale . . . to be an express warranty." By s. 9 of the Saskatchewan Act parol evidence is permitted lo establish the existence of an express warranty.

<41> S. 1(1).

<42> Supra, at 6.

<43> See, for example, U.C.C. 9-109 wherein goods are defined as "consumer goods" if they are used or bought for use primarily for personal, family or household purposes. In Commercial Credit Equip. Corp. v. Carter 516 P. (2d) 767; 13 U.C.C. Rep. 1212 (Wash., 1973), the Washington Supreme Court, in classifying a private plane as "consumer goods," quoted with approval the observation that "the recently retired 'Queen Mary' could qualify as consumer goods if purchased by a billionaire for his own personal use and one recalls that the late Henry Ford, at one time, bought up entire factories for his personal museum. Cf. the definition of "consumer product" in the Magnuson-Moss Warranty Federal Trade Commission Improvement Act, Pub. L. No. 93-637 (1975), 15 U.S.C. s. 230(1), as "any tangible personal property . . . which is normally used for personal, family or household purposes. . ." Even though the formulation appears to be more objective, this has not prevented a U.S. court from concluding that the determination of whether an aircraft is a "consumer product" covered by the Act depends upon the actual use to which the aircraft is put: see Balser v. Cessna Aircraft Company, 512 F. Supp. 1217. (N.D. Ga. 1981).

<44> This will, however, be important to the issue of the seller's ability to exclude or restrict C.P.W.L.A. warranties and remedies pursuant to s. 26.

<45> See, for example, s. 55(7) of the Supply of Goods (Implied Terms) Act 1973, (U.K.) c. 13, wherein "consumer sale" is defined with reference to a sale of goods of a type ordinarily bought for private use or consumption; see also s.7 of the Commercial Transactions (Miscellaneous Provisions) Act, 1974 (N.S.W.) wherein the definition is formulated with reference to goods which are of a kind commonly bought for private use or consumption.

<46> S. 2(e) defines "consumer product" as "any good ordinarily used for personal, family or household purposes . . ." For a discussion of the Saskatchewan sources, see Romero, supra, footnote 23, at 108.

<47> Supra, footnote 43.

<48> The F.T.C. explanatory statements are merely interpretive of the statute and do not control a Court's independent interpretation thereof.

<49> Interpretation of Magnuson-Moss Warranty Act, 16 C.F.R. 700; 42 FR 36114, July 13, 1977.

<50> (1982), 40 N.B.R. (2d) 27 (Q B.).

<51> Ibid., at 30. It is interesting to compare this approach with that taken by the U.S. Federal Trades Commission in its interpretation of the applicability of the Magnuson-Moss Warranty Act to the sale of agricultural products in 16 D.F.R. 700; 42 FR 36114, July 13, 1977: "Agricultural products such as farm machinery, structures and implements used in the business or occupation of farming are not covered by the Act where their personal, family, or household use is uncommon. However, those agricultural products normally used for personal or household gardening (for example, to produce goods for personal consumption, and not for resale) are consumer products under the Act."

<52> The term "land" in its legal signification includes anything fixed to the land: quicquid plantatur solo, solo credit. The question that usually arises for consideration with regard to articles attached to premises is whether the attachment is such that they are to be regarded as fixtures. This is a question of fact which principally depends upon two factors: (1) the mode and extent of the annexation, and (2) the object and purpose of the annexation: See 27 Halsbury's Laws of England (4th ed.) at para. 143 and authorities cited therein.

<53> A common law principle similar in nature to the law of fixtures is the doctrine of accession which applies to chattels which are attached to other chattels. The doctrine has yielded different results in the same fact situations. This has been because of the attempt, on the one hand, to give it a consistent meaning, regardless of the purpose for which it is invoked or of the relationship of the litigating parties; and because of the attempt, on the other hand, to give it a functional direction to take account of the purpose to be served and the character of the claims for which its support is sought. For a compendium of Canadian, Australian and American authorities see Guest, "Accession and Confusion in the Law of Hire Purchase,' (1964) 27 M.L.R. 505.

<54> See also the definition of "consumer product" in the Magnuson-Moss Warranty Act, supra, footnote 43, which defines "consumer product" as ". . . including any such property intended to be attached to or installed in any real property without regard to whether it is so attached or installed."

<55> S. 2(e)(i).

<56> Supra, footnote 23, at 109.

<57> S. 4, Saskatchewan Act.

<58> A full discussion of the doctrine and the changes effected by the C.P.W.L.A. will follow in the second part of this article.

<59> S. 11.

<60> S. 10(1)(a).

<61> S. 1(1) definition of "consumer loss."

<62> See, for example, The Consumer Protection Amendment Act, 1971, Stat. Ont. 1971. (Vol. 2), c. 24, s. 2, adding s. 44a to The Consumer Protection Act, R.S.O. 1970, c. 82 wherein the definition of "consumer sale" is defined to exclude, inter alia, a sale "(a) to a purchaser for resale; (b) to a purchaser whose purchase is in the course of carrying on business."

<63> See First Report of the Consumer Protection Project, Part I, supra, footnote 4, at 200. See also Ontario Warranties Report, supra, footnote 16, at 56-57.

<64> S. 2(1).

<65> "Business" is defined in s. 1(1) of the Act to include "a profession and the activities of any government department or agency, of any municipality or agency thereof, and of any Crown Corporation."

<66> S. 26. Note that the applicable C.P.W.L.A. remedies are those under s. 13.

<67> S. 1(2).

<68> See First Report of the Consumer Protection Project, Part 1, supra, footnote 4, at 199-202.

<69> This was recognized in the Third Report, supra, footnote 6, at 130, which recommended an absolute prohibition against contracting out of the statutory express and implied warranties.

<70> This is accomplished by expanding the definition of "consumer product" in s. 2(e)(ii) to include ". . . any goods bought for agricultural or fishing purposes by an individual or by a family farming corporation . . .". In this respect such farmers and fishermen are in a favoured position vis-a-vis the more "traditional" consumer whose purchases fall within the Saskatchewan Act only if they are "goods ordinarily used for personal, family or household purposes": see s. 2(e)(i).

<71> See Romero, supra, footnote 23, at 111-112.

<72> Supra, footnote 58.

<73> S. 27(4).

<74> Ibid.

<75> See text accompanying footnote 61.

<76> Supra, footnote 59.

<77> Supra, footnote 60.

<78> S. 12.

<79> Infra, footnote 81.

<80> See discussion infra, at 24-25.

<81> S. 1(1) definition of "consumer loss."

<82> S. 1(1).

<83> S. 2(1)(a). A precedent for this approach is contained in the Sale of Goods Act: see s. 15, which exempts implied conditions of merchantability and fitness for purpose in the case of private sales. Note that the C.P.W.L.A. also exempts sales by trustees in bankruptcy, receivers, liquidators, sheriffs and persons acting under an order of the court: see s. 2(1)(b).

<84> The definition of "business" in s. 1(1) includes a profession: supra, footnote 65.

<85> S. 3 of the Act states: "Notwithstanding any agreement to the contrary, a person who incurs any liability in relation to a consumer product, other than liability under s. 8 of this Act, cannot recover indemnification or damages in respect of that liability from or against any seller or supplier of that consumer product who is not a distributor of consumer products of that kind and does not hold himself out as such, unless he incurs the liability because of that person's fraud."

<86> See Dore, supra, footnote 7, at 163.

<87> 18 U.C.C. Rep. 75 (Mass. App., 1975).

<88> While s. 3 addresses the issue directly, the identical result might have been reached on these facts in the absence of the C.P.W.L.A. if a court concluded that the dealer was substantially more knowledgeable about cars that the consumer and did not, therefore, really base his bargain on anything the consumer said: see Oscar Chess, Ltd. v. Williams, [1957] 1 All E.R. 325; 1 W.L.R. 370 (Eng. C.A.).

<89> There is American authority to support this view: see, for example Regan Purchase & Sales Corp. v. Alex R. Primavera, 328 N.Y.S. 2d 490 (1972), 10 U.C.C. Rep. 300, where an auctioneer was held to give the implied warranty of merchantability in U.C.C. 2-314 (1) under the same type of test as is contained in s.2(2)(a) C.P.W.L.A. It is also interesting to compare the English approach contained in s. 3 of the Supply of Goods (Implied Terms) Act, 1973 (U.K.) which added a new s. 14(5) to the U.K. Sale of Goods Act providing that where a sale by a private seller is effected through an agent acting in the course of business, the conditions of merchantability and fitness for purpose are implied unless reasonable steps have been taken to inform the buyer before the contract is made that the sale is on behalf of a private seller or unless the buyer is otherwise aware of that fact.

<90> A full discussion of exclusion clauses will follow in the second part of this article.

<91> Supra, footnote 85.

<92> Supra, footnote 58.

<93> The implied conditions of merchantability and fitness for purpose can be excluded by any seller under s. 52 of the Sale of Goods Act: see Peters v. Parkway Mercury Sales Ltd (1975), 9 N.B.R. (2d) 288, affirmed 10 N.B.R. (2d) 703; 58 D.L.R. (3d) 128 (N.B.C.A.).

<94> See preliminary discussion, supra, at 19-21.

<95> See s. 4(2)(b) and discussion infra, at 37-40.

<96> The existence of this express warranty cannot in these circumstances be negatived by superordinate suppliers: see s. 26.

<97> The applicable C.P.W.L.A. remedies are those under s. 13.

<98> This is brought about because the seller's ability, under s. 26, to exclude or restrict any remedy for breach of an express warranty is subject to the fairness and reasonableness control imposed under s. 25.

<99> See Third Report of the Consumer Protection Project, Vol. I, supra, footnote 6, at 195.

<100> Supra, footnote 97.