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Business Practices And Consumer Protection Act: Direct Sales

February 05, 2019 by FH&P Lawyers

It’s a classic scenario — someone rings your doorbell or calls your home to ‘make you an offer you can’t refuse’ on a product or service that they are selling. Whether it’s a robust cable package, a fancy knife set, lawn care services, or a new vacuum, you may be tempted to accept.

Door-to-door (direct) and over-the-phone (distance) salespeople are often able to offer impressive deals on the products and services that they are selling. However, as a consumer, making a purchase from a door-to-door salesperson or over the phone can be somewhat unnerving, especially when there are contracts involved. How can you tell if the contract is legitimate, and that the product or service you receive will be what you expect?

Taking advantage of these offers can be a smart move, as long as you understand what it is you are agreeing to and your rights as a consumer.

Direct and distance sales are covered in the Business Practices and Consumer Protection Act, which exists to protect British Columbians in these types of transactions, especially where contracts are involved.

Direct sales contracts

What is a direct sales contract?

A direct sales contract is ‘a contract between a supplier and a consumer for the supply of goods or services that is entered into in person at a place other than the supplier’s permanent place of business’. Door-to-door sales are a common example.

These types of contracts must be on a transaction with a value higher than $50 and should be signed during the interaction. As with all contracts, there are several details that must be included in the contract for it to be considered legitimate, such as the supplier’s information, the location, the date, the total price, a description of the goods and services being exchanged, signatures, and more.

Can I cancel a direct sales contract?

It’s important to understand the cancellation terms of a direct sales contract. For example, as a consumer, you have the right to cancel the direct sales contract if you give the supplier notice within 10 days of receiving a copy of the contract. That time period is extended to one year after receiving the contract if the contract does not meet all of its requirements, or if the goods and services in the contract were not supplied within 30 days of the supply date.

There are some other instances where a direct sales contract can be cancelled. View the full details of this law here.

Future performance contracts

If you did not receive the goods and services under the direct sales contract immediately, or did not pay the full amount up front, you may have entered a future performance contract. A future performance contact is ‘a contract between a supplier and a consumer for the supply of goods or services for which the supply or payment in full of the total price payable is not made at the time the contract is made or partly executed’.

The rules pertaining to it are similar, but the contract must also include the date on which the supply of the goods or services will be complete and the amount of the periodic payments, if applicable. You can learn more about future performance contracts here.

Distance sales contracts

What is a distance sales contract?

A distance sales contract is ‘a contract for the supply of goods or services between a supplier and a consumer that is not entered into in person and, with respect to goods, for which the consumer does not have the opportunity to inspect the goods that are the subject of the contact before the contract is entered into.’ Telemarketing is a common example, where you receive a phone call from a salesperson and are not able to physically examine the goods before making your purchase.

Distance sales contracts must include the typical information required of all contracts, plus a detailed description of the goods or services being exchanged, the currency, the delivery arrangements, and more. The supplier must also give the consumer a copy of the contract within 15 days of it being entered into.

Can I cancel a distance sales contract?

There are certain conditions under which a distance sales contract can be cancelled, which you can learn more about here.

Prepaid purchase cards

In the Business Practices and Consumer Protection Act, a prepaid purchase card is defined as ‘a card, written certificate or other voucher or device with monetary value that is issued or sold to a person in exchange for the future supply of good or services to a consumer’.

Except under specific circumstances, prepaid purchase cards must not expire or be tied to any additional costs or fees.

The reason that prepaid purchase cards are relevant here is because they cannot be included in a direct sale or distance sale contract.

If you feel that you have been unjustly treated in a direct sale or distance sale contract, and are not able to cancel the contract with the supplier, you may have other options. Speak with a lawyer at FH&P to learn more.