Consumer Guide

This page was last modified on July 25, 2000. There are no plans to update it further.

This website was created by Karl Dore, the principal architect of the Consumer Product Warranty and Liability Act. It is intended to provide information on the legislation, not to give or offer individual legal advice. For further assistance contact New Brunswick's Consumer Affairs Branch or one of the Rentalsman Offices.

This page was last modified on July 25, 2000.

Table of Contents

Introduction

Did you ever buy goods that

  • did not live up to the seller's promises?
  • were defective?
  • were unfit for your purpose?
  • broke down or wore out sooner than expected?
  • were unsatisfactory for some other reason?
    e.g. quality/condition less than expected in circumstances?

If so, find out about your rights under New Brunswick's

Consumer Product Warranty and Liability Act.

It protects against goods that fall short of reasonable expectations.

Transactions Covered

Q. What kinds of transactions are covered by the legislation?

A. The legislation applies to goods supplied under

  • contracts of sale
  • contracts for services
  • leases.

In some cases the legislation applies even if there is no contract at all. In particular, for defective goods posing an unreasonable danger to person or property (e.g. contaminated food), the legislation imposes responsibility on the supplier even if the goods are supplied as samples or gifts.

Q. Does the legislation apply to

  • retailers?
  • wholesalers?
  • manufacturers?

A. Yes. The legislation applies to anyone who supplies goods of the kind supplied as part of their regular business.

The legislation applies to everyone in the chain of distribution, so the manufacturer and wholesaler may be responsible to the consumer even though the consumer buys the goods from the retailer and has no contract with anyone else. (In legalese, the legislation does not require privity of contract.)

Q. Does the legislation apply to private sellers?

A. No.

Q. Does the legislation apply to all business sellers?

A. No. The legislation applies only if the supplier is a distributor of the kind of goods being supplied (or holds itself out as such).

Thus, for example, the Act would not apply to a restaurant which is selling its delivery car, because it does not supply cars as part of its regular business. Of course, the Act would apply to the food that the restaurant supplies.

Q. Does the legislation apply to all goods?

A. No, the legislation applies only to the kinds of goods that are commonly used for personal, family or household purposes (so-called consumer products).

Some examples of goods covered by the legislation
(taken from actual court cases):

  • used automobile
  • 37 foot motor home
  • used half-ton truck
  • used Jeep
  • exhaust system for used Corvette
  • heat pump (with duct work and related materials and services)
  • hot water tank
  • clothing (jeans)
  • custom made drapes
  • used snowmobile
  • pet dog
  • horse.

Q. Does the legislation apply to used goods?

A. Yes. (See above for a few examples.)

Supplier's Responsibilities
(Guarantees/Warranties)

The legislation uses the word "warranty" as a shorthand label to describe the supplier's responsibilities (or guarantees) regarding the quality or fitness of the goods.

There are two kinds of warranties:

  1. So-called express warranties, which are based on what the supplier says about the goods.
  2. So-called implied warranties, which don't depend simply on what the supplier says, but are based on the buyer's reasonable expectations about the goods in all the circumstances.

The supplier may be responsible under an implied warranty even if it says nothing at all about the goods.

Express Warranties

A supplier's statement may take many forms.

The statement may be expressed as

  • a representation of fact
  • a promise
  • a representation of intention.

The statement may be made

  • orally
  • in writing
  • in advertising.

Regardless of its form, any statement made by the supplier becomes an express warranty if the buyer reasonably relies upon it in purchasing. For example, if a used-appliance dealer represents a refrigerator as this year's model, and the buyer purchases it relying on that statement, there is an express warranty that the refrigerator is this year's model.

In the case of a statement made orally one-on-one, actual reliance on that statement is necessary in order for it to be a warranty.

But in the case of a statement made in writing or in advertising, all that is necessary is that the statement be one that would be considered material by a reasonable buyer, and it is not necessary that the actual buyer rely upon it. (Thus, the consumer will get the benefit of a written guarantee on the label of the product even though he or she does not read it before making the purchase.)

Express warranties include

  • any written or advertised statement that would be material to a reasonable buyer in deciding whether, or on what terms, to buy the goods (regardless of whether the actual buyer relies upon that statement in making the purchase); and
  • any oral statement that would be material to a reasonable buyer and is actually material to the actual buyer.

Express warranties do not include

  • any statement, however made, that would not be taken seriously by a reasonable person
  • any statement, however made, that would not be considered material by a reasonable person
  • any oral, one-on-one statement that is not relied upon by the buyer.

Q. Who bears the burden of proving whether a statement was made and whether it was material?

A. It is up to the buyer to prove that the statement was made. It will then be presumed that the statement was material unless the supplier proves otherwise.

Q. What if the supplier makes an oral statement that is both material and actually relied upon, but there is a written contract which makes no mention of that statement?

A. The oral statement prevails and it is an express warranty.

Tip: One is always well advised to get it in writing, because it so much easier to prove in case of dispute.

Q. What if the supplier makes an oral statement that is both material and actually relied upon, but the supplier gets the consumer to sign a written contract whose unread "fine print" denies responsibility for oral promises?

A. The oral statement prevails and it is an express warranty. Suppliers cannot avoid responsibility for their oral promises by disclaimers buried in the fine print of their written contracts. If a supplier wants to take back a statement, it must make this clear to the buyer before the contract is made.

Tip (again!): One is always well advised to get it in writing, because it is so much easier to prove in case of dispute.

Q. Is the supplier responsible for its salesperson's statements?

A. Yes. The supplier is responsible for any statement that the salesperson makes when acting within the scope of his or her actual, usual or apparent authority. The onus is on the supplier to prove that the salesperson was acting outside the scope of his or her actual, usual or apparent authority.

Q. Is the retailer responsible to the buyer for statements that the manufacturer or other distributor prints on the product, or on signs or documents accompanying the product?

A. Yes.

And the manufacturer or other distributor is also responsible to both the buyer and the retailer.

Implied Warranties

In addition to express warranties, there are so-called implied warranties covering title, quality and fitness.

The purpose of the implied warranties is to protect the reasonable expectations that a buyer would have about the goods considering all the circumstances of the sale.

  • The implied warranties provide protection against faults that are unexpected.
  • Protection is commensurate with the buyer's reasonable expectations about the goods.

Expectations vary with the circumstances. For example, what the supplier says about the quality of the goods may have an important effect on the buyer's expectations. So may their price. And so may their age. Someone buying (say) a brand new car will have a different set of expectations than one who is buying a car five years old.

Because reasonable expectations do not depend simply on what the supplier says but on other circumstances as well, implied warranties apply even when the supplier says nothing at all.

Moreover, even when the supplier does say something, this is not the only source of reasonable expectations about the product and its quality. Express warranties do not exclude the implied warranties. The implied warranties are additional to the express warranties.


Title

Under the implied warranty as to title, the seller guarantees

  • the seller has the right to sell the goods, and
  • the goods are free of liens and other prior claims against title
    (except any known to the buyer before the contract is made).

For example, suppose the buyer purchases a used car from a dealer. Unknown to both parties, a previous owner of that car had used it as collateral for a loan from a bank, and the bank's security interest takes priority over both buyer and dealer. The dealer is responsible to the buyer for the defect in the title.

Quality and Fitness

Safety standards

The goods must meet all applicable federal/provincial standards in relation to health, safety and quality.

Satisfactory quality

There is an implied warranty that the goods are

  • of such quality,
  • in such state or condition, and
  • as fit for their normal purpose(s)

as it is reasonable to expect having regard to

  • the supplier's description of the goods, if any,
  • the price, when relevant, and
  • all other relevant circumstances.

What is reasonable to expect in the circumstances is basically a question of fact dependent on the circumstances. Expectations of quality are relative, not absolute. The buyer will certainly expect appropriate/satisfactory quality for her or his money.

For example, in one case a consumer had made a contract for custom made drapes for all of her new house. When they were installed, some drapes were too long, some were too short, some had incorrect width, some were wrinkled, and some had puckered hems. Not surprisingly, the court found that the drapes were not of satisfactory quality.

On the other hand, in another case involving a 12 year old Monza car "driven 166,000 kilometers on New Brunswick roads," the judge said it was unreasonable to think of it as a "potentially valuable antique." "When a car is 12 years old," the judge said, "quite a bit of rust is very predictable." Similar observations were made in another case involving a car that was 8 years old and had 100,000 miles on it. The judge remarked: "an appreciable rusting of the frame and underparts of a vehicle of that vintage could only be well-anticipated."

In yet another case, a car dealer was held to be in major breach of the implied warranty when it sold a 5 year old car whose unibody frame was found within 3,000 miles and six-to-seven weeks after purchase to be rusted out to the "point of collapse."

The warranty of satisfactory quality does not cover

  • any defect that is known to the buyer before purchase
  • any defect that the supplier has reason to believe exists and so discloses before purchase
  • in the case of used goods that the buyer examines before purchase, any defect that should be apparent on that examination
  • in the case of a sale by sample, any defect that would be apparent from a reasonable examination of that sample.

Goods unused

There is an implied warranty that the goods are unused (beyond reasonable use to test, service or deliver them), unless the buyer knows or ought to know that the goods are used or likely to be used.

Again, the purpose is to protect against unfair surprise.

Fitness for normal purpose

There is another implied warranty that the goods are reasonably fit for their normal purpose, unless the buyer is not relying on the supplier's skill or judgment regarding their fitness, or is unreasonable in so relying.

It will be presumed that the buyer relies on the supplier's skill or judgment and is reasonable in so relying, unless the supplier shows otherwise.

Fitness for special purpose

Where the buyer is purchasing goods for some special purpose, and before purchase makes that purpose known to the seller, there is an implied warranty that the goods are reasonably fit for that special purpose, unless the buyer is not relying on the supplier's skill or judgment regarding their fitness for that purpose, or is unreasonable in so relying.

The onus is on the buyer to prove that he or she has made that special purpose known to the seller.

It will be presumed that the buyer has relied on the seller's skill or judgment regarding the goods being fit for that special purpose, and that the buyer is reasonable in so relying, unless the seller shows otherwise.

Durability

There is an implied warranty that the goods (and any parts/components) will be reasonably durable.

Again, all relevant circumstances are considered, including

  • the kind of product
  • whether it was new or used
  • its use as contemplated by the seller and buyer at the time of the contract
  • its actual use
  • whether it was properly maintained.

For example, in one case the seam in some new jeans came apart after being worn and washed only twice. The court held that the jeans were not reasonably durable.

In another case involving an 8 year old car with 100,000 miles on it, the judge said such mileage would suggest that its "further use-expectancy was highly unpredictable."

Implied warranties are additional
to express warranties

In many cases the buyer will actually have more protection under the implied warranties than he or she has under an express warranty given by the seller.

For example, in one case the consumer bought a used snowmobile, on which the seller gave a 30 day 50/50 warranty (50% off parts and labour). The machine had major engine and clutch problems shortly after purchase. The court found that there was a major breach of the implied warranty of durability, and allowed the consumer to return the snowmobile and get a refund.


Remedies

Repair

If there is a breach of any warranty (whether express or implied), the normal procedure is for the consumer to contact the seller and ask it to fix the problem.

Normally, the consumer must give the seller a reasonable opportunity to fix the breach. For example, if a consumer were to order custom made drapes, and they were made a tad too long, the consumer could not simply reject the drapes and demand a refund, but would have to give the seller the opportunity to fix them. It would be quite unfair to the seller if it were otherwise.

In one case a used-car buyer refused the seller any opportunity to make a warranty repair, and instead rejected the car and sued for a full refund of the purchase price. The problem turned out to be very minor, and in fact it cost only $2.50 to fix. Not surprisingly, the action was dismissed.

If the seller does not fix the problem within a reasonable time, the consumer can get someone else to fix it, and in that case the seller is responsible to the consumer for the damages (e.g. the reasonable cost of repairs).

Q. Who is responsible for returning the goods to the seller for repair?

A. Normally, the consumer is responsible for returning the goods, but the seller is responsible for the consumer's expenses. The consumer is not responsible for returning the goods if this would be a significant inconvenience (e.g. because of their size or weight).

In some cases the consumer can skip the seller and go right away to someone else to fix the problem. The consumer can do this if:

  • there is a major breach; or
  • the consumer would suffer significant inconvenience to have to go to the seller.

Rejection and refund

In some cases the consumer can choose to reject the goods and get her or his money back.

  1. The consumer can choose rejection/refund if there is a major breach. And because it's a major breach, the consumer can reject the goods immediately without first giving the seller a chance to rectify.
    "Major breach," as one judge explained, is not a technical term with a precise definition, but simply means "a breach that would lead an ordinary person to say, under all of the circumstances, 'that's very serious'."
  2. The consumer can also choose rejection/refund even for a non-major breach, if that breach appears within the first sixty days after delivery, and the seller fails to correct it within a reasonable time.
  3. If it is impossible, or significantly inconvenient, for the consumer to give the seller an opportunity to fix the problem, the consumer can reject the goods immediately even for a non-major breach.

To exercise the rejection/refund remedy, the consumer must notify the seller of his or her election to choose this remedy and do so within a reasonable time after discovering the breach.

Upon rejection, the consumer is released from the contract and is entitled to:

  • a refund of any money paid to the seller
  • the return of any trade-in (or its monetary value when it was given)
  • reimbursement for any payments made on a credit contract
  • reimbursement for credit costs reasonably incurred, and
  • compensation for any other reasonably foreseeable financial losses or damages caused by the breach of warranty.

The seller, in turn, is entitled upon the consumer's rejection to:

  • reasonable compensation for any benefits the consumer received from use of the goods
  • compensation for any deterioration of the goods (beyond reasonable wear and tear from use), or for any damage done to the goods (except, of course, damage due to the seller's breach)
  • the return of the rejected goods (but the consumer may retain possession of the goods as security until the seller makes all the required refunds).

Subject to some exceptions, the consumer must be able to return the goods free and clear from any rights against them in favour of third parties.

Damages

In addition to the repair and refund remedies, the seller is also responsible to the consumer for any other reasonably foreseeable financial losses or damages caused by the breach of warranty.

For example, in one case a buyer was awarded $100 extra damages for his loss of time and out-of-pocket expenses because he had to make numerous trips back and forth from his home in Caraquet to the seller in Bathurst in attempting to have his defective truck repaired.

Special cases

Rejection/refund remedy not available against remote suppliers. The warranties under this legislation apply to sales to any buyer, whether consumer buyer or business buyer. Moreover, a seller's warranties run all the way through the distribution chain to the ultimate consumer or user. For example, suppose that the manufacturer of a personal computer sells it to one of its dealers, and the dealer resells it to a consumer. The computer turns out to be defective, and the manufacturer is in breach of its warranty to the dealer, and the dealer in turn is in breach of its warranty to the consumer. Suppose further that the dealer has gone out of business, and the consumer ends up having to pay $1,000 to have the computer repaired by someone else. The consumer can recover that $1,000 in damages from the manufacturer.

However, the damages remedy is the only remedy that the consumer has against the manufacturer. The rejection/refund remedy is only available against the consumer's seller.

Different remedies for services/labour contracts. The special remedies part of this legislation does not apply to consumer products supplied under a contract for services or labour. What apply instead are the normal remedies for breach of warranty under the general law.

Waivers/Disclaimers

Generally, the seller cannot contract out of the consumer's protection under this legislation. The consumer cannot waive his or her rights. The rights given by this legislation will prevail over anything else to the contrary, including any contract, agreement, notice, waiver or disclaimer.

The seller cannot exclude or restrict

  • the express warranties
  • the implied warranties
  • the remedies for breach of the implied warranties.

The seller can provide different remedies for breach of some express warranties, but even this is subject to a fairness and reasonableness control.

Complaint Procedures

Government assistance