Prohibited itinerant merchant contracts

Notwithstanding exceptions, itinerant merchants are prohibited from entering into or being involved in entering into (offering to enter into, helping or encouraging to enter into, or soliciting a consumer for the purpose of entering into such a contract), even on an incidental basis, any contracts that concern:

• heating or air-conditioning appliances (e.g., air conditioners, heat pumps, furnaces or geothermal systems;
• decontamination services; or
• Insulation services.

This includes any contract related to any of these goods or services, such as a maintenance or warranty contract.

Itinerant merchants are also prohibited, notwithstanding exceptions, from entering into or being involved in entering into a credit or long-term lease contract.

If a contract is entered into despite the prohibition, the consumer has one year after the day the contract was signed by both parties to resolve it.

Exceptions to prohibited itinerant merchant contracts

Exceptions apply to the following:

• Financial institutions: banks and financial service cooperatives may enter into a credit contract.
• Insulation services: merchants may enter into an insulation service contract at a consumer’s home, on condition that the consumer had expressly requested such a contract and that there was no solicitation on the part of the merchant elsewhere than at its place of business.
• Telecommunications: broadcasting or telecommunications companies may enter into a long-term lease with consumers at their home (e.g., to lease a modem).
• Heating or hot water repairs: merchants may enter into a contract at a consumer’s home regarding an appliance that is essential to heating or the production of hot water, including a lease contract, when all of the following conditions are met:
  • The merchant appears at the consumer’s home at the consumer’s express request to repair an appliance that is essential to heating or the production of hot water.
  • The appliance is irreparable and must be replaced.
  • The consumer expressly requests to enter into the contract.
  • The contract exclusively covers the replacement of the defective appliance.
• Appraisal: merchants may enter into a contract at a consumer’s home regarding a heating or air-conditioning appliance, a decontamination or insulation service, or a lease contract when all of the following conditions are met:
  • The merchant appears at the consumer’s home at the consumer’s express request, and that this request is not further to being contacted by the merchant for the purpose of being invited to the consumer’s home.
  • The consumer’s request is made for the purpose of receiving an appraisal for goods or services.
  • The contract is entered into at the express request of the consumer and only covers the subject of the appraisal.
  • In the case of a lease contract, it is not a “high-cost” contract.

Itinerant merchants – wait period before supplying a service

In the 10-day period that follows the day on which the consumer receives a copy of the contract, the merchant may not supply any of the services provided for in the contract, such as performing work or installing goods.

However, a merchant may begin work or installing goods before the end of the 10-day wait period in the following situations:

• the merchant acts upon an exception regarding a heating or hot water repair or an appraisal;
• the merchant must install goods under a broadcasting or telecommunications service contract;
• the contract exclusively covers an urgent repair to a door, a window or the roof of a building, when that contract was entered into at the consumer’s home at their request.

Resolving a contract entered into with an itinerant merchant

Any contract entered into as an accessory to a contract entered into with an itinerant merchant, further to some form of intervention by the latter, forms a whole with that contract. This comes into force as soon as another contract is entered into, even with a third-party merchant.

Thus, the resolution of an itinerant merchant contract automatically results in the resolution of that other contract, regardless of the party with which it was entered into. The itinerant merchant is therefore responsible for reimbursing the consumer for any amounts paid, including those paid to another merchant.

Contents of a contract entered into with an itinerant merchant

In an indeterminate-term contract, the total amount the consumer must pay each month must be indicated, even if the instalments are calculated on a basis other than a monthly basis.

Contracts on technological media

Any contract for which a written document is required may now be drawn up on a technological medium (e.g., an electronic document), provided the consumer has given their express authorization.

The contents of the contract must be fully disclosed to the consumer without the need to access it via a hyperlink, an external clause or other similar manner. The parties then sign the contract.

Transmission of the contract and other signed documents

As soon as it is signed, the merchant must give the consumer a duplicate of the contract and a copy of any other document signed by the consumer upon entering into the contract. These documents must be given in paper form, unless the consumer has expressly authorized that these documents be sent by a technological medium. In that case, they may be sent by email or to another technological address provided by the consumer for that purpose. The documents sent in such a manner must be easy for the consumer to retain and print.

Public register of rights

Fees charged for registering in or consulting a public register of rights (e.g., the register of personal and movable real rights – the RDPRM) are credit charges. As such, they may be added to a credit contract as credit charges.

Suspension of repayment in the case of a legal dispute

In the case of a legal dispute between a merchant and a consumer regarding goods or services, the consumer may petition the court to suspend the repayment of the credit contract until the dispute is resolved.

In the case of a loan or a variable credit contract (e.g., a credit card), the contract must have been entered into in conjunction with the contract for the goods or services in order to finance the purchase. The merchant and the credit merchant must also have collaborated in extending this credit to the consumer.

The court determines which party is to pay the credit charges accrued during the suspension of the repayment.

Charges related to security

Charges related to security must be included in the calculation of a contract’s credit rate.

No security may provide that payment is required or must be collected from a consumer for the purpose of entering into a credit contract.

Incitement to use credit that has already been extended

No merchant may send a consumer a document that, upon its signature, allows for the use of credit that has already been extended, unless this was requested by the consumer in writing. For example, sending a cheque drawn from the same account as the consumer’s credit card is prohibited, unless this was requested by the consumer.

Road vehicles – mandatory leasing or financing is prohibited

No merchant may require a consumer to enter into a credit or long-term lease contract to acquire a road vehicle. The consumer is thus free to pay in cash or secure financing from the merchant or the financial institution of their choice.

No merchant may require a consumer to acquire other goods or services, other than the insurance required to enter into a credit or long-term lease contract, to acquire a road vehicle.

High-cost credit contracts – merchants that do not hold the required permit

Consumers who enter into a high-cost credit contract with a merchant that does not hold the required permit may demand that:

• the contract be cancelled; or the applicable credit charges be cancelled and that those already paid be reimbursed.

As of April 5, 2024, the warranty of good working order for used automobiles sold or leased by a merchant has been updated to cover a greater number of automobiles.

Used car merchants are required to apply this warranty. It covers parts and the labour required to ensure the automobile is in good working order as well as reasonable towing or breakdown service charges.

In a long-term lease, merchants may not include a clause allowing them to charge additional fees at the end of the lease because the nature or quality of a part or component installed as part of normal maintenance service does not satisfy them. In order for a contract to include such a clause, it must expressly provide that the item may only be returned with a component of a specific nature or quality.

Furthermore, merchants may not include a clause allowing them to charge fees at the end of the lease on the grounds that the part is not an original part from the manufacturer or that maintenance service was not performed by the manufacturer or a merchant approved by the manufacturer.

These amendments apply to all consumer goods subject to a long-term lease, which include automobiles, appliances and water heaters.

Leased automobiles: contracts entered into as of April 5, 2024

At least 90 days before the end of your long-term lease, the merchant must offer you to carry out an inspection of the automobile, free of charge. You are free to accept or refuse this proposal.

If you accept it, the inspection must be carried out at least 30 days before the end of the contract. However, it may not be carried out more than 60 days before the end of the contract. The merchant may choose whether the inspection is to be carried out at its establishment or at your home.

Written report

Immediately after this inspection, the merchant must give you a written report. Where applicable, it must indicate the following information:

• the parts or components of the automobile which, in the merchant’s opinion, show abnormal wear;
• your right to repair these parts or components or have them repaired by a third person of your choice.

When the vehicle is returned

When the automobile is returned, the merchant must give you a written notice indicating any abnormal wear. The merchant must provide the following information:

• the parts or components that show abnormal wear;
• your right to repair those parts or components or have them repaired by a third person of your choice within 10 days following receipt of the notice.

Merchants may not claim any charges for abnormal wear in the following situations:

• The merchant did not offer you to inspect the automobile free of charge at least 90 days before the end of the lease.
• The merchant did not give you an inspection report or a written notice as required.
• The merchant sells or re-leases the automobile before the end of the 10-day period indicated in the written notice.

The business of trading in goods for which obsolescence is planned is prohibited: they may not be offered, sold, rented or leased to a consumer. The obsolescence of goods is planned where a technique aimed at reducing their normal operating life is used on them.

Anyone who believes this prohibition has not been respected can file a complaint with the Office.

Owners and long-term lessees of problematic automobiles (“lemons”) may submit an application to the court to have their vehicle declared a “seriously defective automobile.”

In order for such an application to be accepted, the following conditions must be met:

• One or more defects have appeared when the automobile has not covered more than 60,000 kilometres and within 3 years of its first sale or long-term lease.
• The defects render the automobile unfit for the purposes for which it is ordinarily intended or substantially diminish its usefulness.
• Attempts to repair one or more of the defects have been made under the automobile manufacturer’s warranty in accordance with any of the following scenarios:
  • 3 unsuccessful attempts have been made for the same defect;
  • 1 or 2 unsuccessful attempts have been made for the same defect where the merchant or the manufacturer responsible for performing the warranty has had the automobile in its possession for more than 30 days, not including any days for which the merchant or manufacturer shows that the repairs could not be carried out due to a shortage of parts and that the consumer was provided with a replacement automobile free of charge.
  • 12 attempts have been made for unrelated defects, regardless of whether or not these attempts were successful.

An automobile that is declared a “seriously defective automobile” is deemed to be affected by a latent defect. Consumers may therefore petition the court to cancel the contract or reduce the price paid, and claim damages and punitive damages.

When an automobile is declared a “seriously defective automobile,” the following rules must be respected:

• A road vehicle dealer or recycler who sells the automobile to another road vehicle dealer or recycler must inform the dealer or recycler that the automobile has been declared a “seriously defective automobile.”
• A merchant that puts the automobile up for sale or lease to consumers must indicate that it has been declared a “seriously defective automobile” on the label that must be affixed onto the automobile.
• No person may advertise an automobile that has been declared a “seriously defective automobile” without disclosing that fact.

A merchant who proposes to a consumer to purchase an additional warranty (also known as an “extended warranty”) must inform the consumer that he or she has 10 days to cancel it without cost or penalty. To exercise this right to cancel, the consumer must send a written notice to that effect within 10 days after entering into the contract.

These amendments apply to all goods subject to an additional warranty contract, which include automobiles, appliances and electronic devices. However, they do not apply to contracts entered into with an insurer authorized by the Autorité des marchés financiers. Consumers can check this in the Register of firms and individuals authorized to practice, on the Autorité des marchés financiers website.