Consumer Protection Act + IT + QC

vincent gautraisassociate professor

faculty of law /university of montreal

october 28th, 2010

udm chair in e-Security and e-Business law

www.gautrais.com

4

je me souviens …

remember …

5

que né sous le lys …

that born under the lily …

6

... je crois sous la rose.

… I grow under the rose.

(Eugène-Étienne Taché)

7

8

souvenons-nous que nés sous le papier …

remember that born under paper …

9

... nous croissons sous l’électronique.

… we grow under electronic.

10

an important objective of CPA

management of change

11

an important objective of CPA

huge management of change

quebec legal situation

consumer protection act

1978 2006 2009

bill 48

bill 60

13

2 ways to protect

substantial versus processualprotection protection

aristotle plato

substantial versus processualprotection protection

aristotle plato

1

consumer protection = processual element

1A

state of the law

« Paper contract is an act; electronic contract is a process »

Ethan Katsh.

Internet sales contract harmonization template (2001)

Info

rm b

efo

re54.4

Accep

t b

efo

re54.5

Pri

nt

/ R

eta

in 5

4.4

Tra

nsm

issio

n54.7

Evid

en

ce

54.6

Resolu

tion

54.8

Ch

arg

eb

acks

54.8

1 2 3 4 6 75

« 54.4. Before a distance contract is entered into, the merchant must disclose the following information to the consumer :

a) The merchant’s name and any other name under which the merchant carries on business ; b) The merchant’s address ; c) The merchant’s telephone number and, if available, the merchant’s fax number and technological address ; d) A detailed description of goods or services that are to be the object of the contract, including characteristics and technical specifications ; e) An itemized list of the prices of the goods or services that are to be the object of the contract, including associated costs charged to the consumer and any additional charges payable under the Act ; f) A description of any possible additional charges payable tp a third party, such as customs duties and brokerage fees, whose amounts cannot reasonably be determined ; g) The total amount to be paid by the consumer under the contract and, if applicable, the amount of instalments, the rate applicable yo the use of an incidental good or service and the terms of payment; h) The currency in which amounts owing under the contract are payable if not Canadian dollars ; i) The date on which, or the time within which, the merchant’s principal obligation must be performed; j) If applicable, the mode of delivery, the name of the carrier and the place of delivery ; k) The applicable cancellation, rescission, remurn, exchange and refund conditions, if any, and ; l) Any other applicable restructions or conditions.

1

54 in fine

"prominently and in a comprehensible manner [brought] expressly to the consumer’s attention"

protection = information

jakob nielsen and legibility

solutions ?

• short

• accessible

• with humanity

• slow

• visual

information = oxygen

54.4 in fine

print / retain

2

In the case of a written offer, the merchant must present the information in a manner that ensures that te consumer is able to easily retain it and print it. »

hybrid proof

(written / online)

France

the merchant retains the contract himself

« 54.5. Before a distance contract is entered into, the merchant must provide the consumer with an

express opportunity to accept or decline the proposal and to correct any errors. »

3

54.6 4

The contract must be evidenced in writing and indicate :

a) The consumer’s name and address ; b) The date the contract is entered into ; c) The information described in section 54.4.

draw me a writing !

draw me a writing !

ROC = "accessible so as to be usable for subsequent reference"

draw me a writing !

quebec = integrity

draw me a writing !

Comparative Analysis of the United Nations Convention on the Use of Electronic

Communications in International Contracts and the Civil Law of Quebec

draw me a writing !

françois senécal and his LL.M master thesis on "electronic writing"

54.7

« The merchant must send a copy of the contract to the consumer within 15 days after the contract is entered into, in a manner that ensures that the consumer may easily retain it and print it. »

5

54.8« The consumer may cancel the contract within seven days after receiving a copy if :

a) the merchant did not disclose to the consumer the information described in section 54.4;

b) the merchant did not provide the consumer with an express opportunity , before the contract was entered into, to accept or decline the proposal or to correct any errors;

c) the contract does not meet the requirements of section 54.6.

If the merchant does not send a copy of the contract to the consumer within the time provided for in section 54.7, the consumer has 30 days, as of the date the contract is entered into, in which to cancel the contract. »

6

Send copy

Inform

Acknowledge receipt

Accept

54.14

« If the merchant defaults on the obligation to make a refund under section 54.13 and the consumer has paid by credit card the consumer may, within 60 days following the default, request the card issuer to chargeback all amounts paid under the contract and any accessory contract, and to cancel all charges made to the consumer’s account in relation to those contracts. »

7

1B

does it works ?

1

maybe not so much !

contracts don’t change

same contractual pathologies

… still difficult to read

… still dynamic

7. Privacy; Monitoring the ServicesWe are under no obligation to monitor the services, but we may do so from time to time and we may disclose information regarding User’s use of the Services for any reason and at our sole discretion in order to satisfy applicable laws, regulations, governmental requests, or in order to operate and deliver the Services in an effective manner, or to otherwise protect us and our Users. We agree to comply with the terms of our Privacy Policy as set forth on our FAQ website, as it may be amended from time to time.

… still too long

… still with too much hyperlinks

… still difficult to find

… still with too much legalese

THE SERVICES PROVIDED BY US ARE PROVIDED "AS IS." WE MAKE NO WARRANTY OF ANY KIND, EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT, OR ANY WARRANTY REGARDING THE RELIABILITY OR SUITABILITY FOR A PARTICULAR PURPOSE OF ITS SERVICES. USER UNDERSTANDS AND ACKNOWLEDGES THAT WE EXERCISE NO CONTROL OVER THE NATURE, CONTENT OR RELIABILITY OF THE INFORMATION AND/OR DATA PASSING THROUGH OUR NETWORK. NO ORAL OR WRITTEN INFORMATION OR ADVICE GIVEN BY US, ITS DEALERS, AGENTS OR EMPLOYEES SHALL CREATE A WARRANTY AND USER MAY NOT RELY ON ANY SUCH INFORMATION OR ADVICE. WE MAKES NO WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED, REGARDING THE QUALITY, ACCURACY OR VALIDITY OF THE INFORMATION AND/OR DATA RESIDING ON OR PASSING THROUGH ANY NETWORK. USE OF ANY INFORMATION AND/OR DATA OBTAINED FROM OR THROUGH SERVICES PROVIDED BY US WILL BE AT USER’S OWN RISK. USER ACKNOWLEDGES THAT WE ARE NOT LIABLE FOR ANY ERRORS OR INTERRUPTION IN THE INSTALLATION PROCESS OR IN PROVIDING THE SERVICES, WHETHER WITHIN OR OUTSIDE THE CONTROL OF US. UNDER NO CIRCUMSTANCES SHALL THE USER HOLD US OR ANY OF OUR AGENTS, CONTRACTORS OR REPRESENTATIVES RESPONSIBLE FOR ANY FORM OF DAMAGES OR LOSSES (INCLUDING WITHOUT LIMITATION ANY DIRECT, INDIRECT, CONSEQUENTIAL OR INCIDENTAL DAMAGES OR LOSSES) SUFFERED FROM, BUT NOT LIMITED TO ERRORS, DELAYS, LOSS OF INFORMATION, DELAYS IN THE INSTALLATION OR PROVISIONING PROCESS, OR INTERRUPTIONS IN THE SERVICES CAUSED BY THE USER, US OR A THIRD PARTY’S NEGLIGENCE, FAULT, MISCONDUCT OR FAILURE TO PERFORM. USER UNDERSTANDS THAT TELECOMMUNICATION AND/OR NETWORK ACCESS SERVICES MAY BE TEMPORARILY UNAVAILABLE FOR SCHEDULED OR UNSCHEDULED MAINTENANCE AND FOR OTHER REASONS WITHIN AND OUTSIDE OF THE DIRECT CONTROL OF US. UNDER NO CIRCUMSTANCES DO ANY SUCH ERRORS, DELAYS, INTERRUPTIONS IN SERVICES OR LOSS OF INFORMATION NULLIFY OR MODIFY THESE TERMS AND CONDITIONS. WE RESERVE THE RIGHT TO REFUSE OR TERMINATE SERVICES TO A USER AT ANY TIME WITHOUT CAUSE. THE INTERNET CONTAINS UNEDITED MATERIALS, WHICH MAY BE SEXUALLY EXPLICIT, OR MAY BE OFFENSIVE TO YOU OR OTHERS ACCESSING THE SERVICES. WE HAVE NO CONTROL OVER SUCH MATERIALS AND ACCEPT NO RESPONSIBILITY FOR SUCH MATERIALS.

… and abusive clauses

… and ‘stupid’ clauses

DELL (INCLUDING DELL’S PARENTS, AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS) DOES NOT ACCEPT LIABILITY BEYOND THE REMEDIES SET FORTH HEREIN, INCLUDING ANY LIABILITY FOR PRODUCTS NOT BEING AVAILABLE FOR USE, LOST OR CORRUPTED DATA OR SOFTWARE, PRODUCTS SOLD THROUGH DELL’S SOFTWARE AND PERIPHERALS DIVISION, OR THE PROVISION OF SERVICES OR SUPPORT. DELL WILL NOT HAVE ANY LIABILITY FOR ANY DAMAGES ARISING FROM THE USE OF THE PRODUCTS IN ANY HIGH RISK ACTIVITY, INCLUDING, BUT NOT LIMITED TO, THE OPERATION OF NUCLEAR FACILITIES, AIRCRAFT NAVIGATION OR COMMUNICATION SYSTEMS, AIR TRAFFIC CONTROL, MEDICAL SYSTEMS, LIFE SUPPORT OR WEAPONS SYSTEMS. DELL WILL NOT BE LIABLE FOR LOST PROFITS, LOSS OF BUSINESS, OR OTHER INCIDENTAL, INDIRECT, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, OR FOR ANY CLAIM BY ANY THIRD PARTY EXCEPT AS EXPRESSLY PROVIDED HEREIN.

2

maybe not so much

so few jurisprudence

Dufour c. Air Canada, 2008 QCCQ 12140

3

maybe not so much

i have a dream

http://www.gerv.net/writings/poetic-licence/bsd.html

i have a dream

generator of short and legible contract

i have a dream

will revival

2

consumer protection =

substantial element

2A

substantial principles + new laws

bill 48

2006 changes

1

arbitration clause

11.1. Any stipulation that obliges the consumer to refer a dispute to arbitration, that restricts the consumer's right to go before a court, in particular by prohibiting the consumer from bringing a class action, or that deprives the consumer of the right to be a member of a group bringing a class action is prohibited.

direct answer to Dell case …

… and arbitrability of consumer conflict

thanks

pauline halpern

from theory to reality

the good students :

booh !

Wrong

Wrong

booh !

Wrong

Wrong

bill 60

2009 changes

1

unilateral amendment by the merchant

11.2: The contract can only contain such a clause if the contract also provides that: - only specific parts of the contract can be so amended ;

- the consumer is informed of the amendment 1 month before it enters into effect ;

- the consumer may demand rescision of the contract if the amendment entails an increase in the consumer’s obligations or a reduction of the merchant’s obligations.

11.2 in fine – distinction :

- determinate-term service contract : the amendment clause cannot in any case apply to an essential element of the contract ;

- indeterminate-term service contract : can apply to any stipulation of the contract.

« essential element of the contract » :

- nature of the goods / service object of the contract ;

- price of the goods/service

- term of the contract (if applicable) ;

- ….

from theory to reality…

the main actors in e-commerce and media service providing

the good students

Exhaustive list

Inform beforehand

Give the possibility to repudiate

the good students

Inform beforehandExhaustive list

Option to repudiate

the average students

No limitation as to the sections subject to modificationInform beforehand

Possibility to repudiate

the average students

• Videotron

General power of amendment

Inform beforehand

Option to repudiate

The ugly truth…

General power of modification

No information in any form

The ugly truth…

General power of

modification

No information to the customer

2

contracts involving sequential performance for a service provided at a distance - notably cellular providers

mandatory stipulationsArt. 214.2 C.P.A

- name and address of the parties ;

- phone number and email of the merchant;

- detailed description of the service and associated premium ;

- monthly rate for each service, associated cost and total amount ;

- Applied restrictions on the use of the service ;

- Statement as to the calculation of the cancellation indemnity

- Manner to obtain information on services not provided under the contract ;

- Term and expiry date of the contract.

evidenced in writing

termination of the contract

Expiry date : no implied reconduction unless for an unfixed term.

At any time, for any reason, the consumer may cancel the contract by notifying the merchant.Fixed-term contract : pre-calculated cancellation indemnity is applicable;Unfixed-term contract : no cancellation indemnity unless rebate on the sale price of the goods purchased in consideration of the service offered.

Reminder to the consumer between 90 and 60 days prior to the expiry date

214.3 C.P.A

214.4 C.P.A214.7 and 214.8 C.P.A

Initial duration of the contract

so, cancellation is possible…

but at what price ?

fixed term contracts

• Indemnity Economic benefit - (economic benefit x (number of months elated since the conclusion / initial duration of the contract).

• OR if no economic benefit, the lesser of 50 dollars and an amount representing 10% of the price of the services provided for in the contract that were not supplied

ex1

termination after 5 months:

Maximum indemnity = 90 – (90 X (5 : 24)) =

71 $ max

ex2

termination after 5 months:

Maximum indemnity = 50 or (10% X (19 X 20)) =

50 or 38 $ max

unfixed term contracts

Indemnity sale price - ((sales price / 48) x number of months of duration of the contract).

ex3

termination after 30 months:

Maximum indemnity = 90 – (90 : 48) X 30) =

34 $ max

vague

looks great !

booh !

Unclear and incompliant with the previously discussed formula

2B

substantial principles + old laws

advertising for persons under 13

248. Subject to what is provided in the regulations, no person may make use of commercial advertising directed at persons under thirteen years of age.

is this regulation really applicable ?

is this regulation technology neutral ?

?

i have a dream…

controlling standard clauses

Consumer Protection Act + IT + QC

vincent gautraisassociate professor

faculty of law /university of montreal

october 28th, 2010

udm chair in e-Security and e-Business law

www.gautrais.com