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Simon Shields,
LLB

Barrister and Solicitor
(Retired)
LSUC #37308N


simonshields@isp.com

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CONSUMER LAW

Consumer Protection (Ontario) Law
General CPA Law
(01 July 2013)

Chapter 4 - Rule Conflict Resolution

  1. Overview
    (a) General
    (b) The Problem
    (c) The Basic Rule Conflict Principle? Apply them ALL.
    (d) Using the Paramountcy Rules
  2. Chattel Leases
    (a) Preliminary
    (b) Future Performance Agreements
    (c) Personal Development Services
    (d) Internet Agreement
    (e) Direct Agreement
    (f) Remote Agreement
  3. Motor Vehicle Repairs
    (a) Preliminary
    (b) Future Performance Agreements
    (c) Time Share
    (d) Personal Development Services
    (e) Internet Agreement
    (f) Direct Agreement
    (g) Remote Agreement
  4. Loan Brokering
    (a) Preliminary
    (b) Future Performance Agreements
    (c) Time Share
    (d) Personal Development Services
    (e) Internet Agreement
    (f) Direct Agreement
    (g) Remote Agreement
  5. Credit Repair
    (a) Preliminary
    (b) Future Performance Agreements
    (c) Time Share
    (d) Personal Development Services
    (e) Internet Agreement
    (f) Direct Agreement
    (g) Remote Agreement
  6. Time Shares (Includes Vacation Clubs)
    (a) Preliminary
    (b) Future Performance Agreements
    (c) Personal Development Services
    (d) Internet Agreement
    (e) Direct Agreement
    (f) Remote Agreement
  7. Personal Development Services
    (a) Preliminary
    (b) Future Performance Agreements
    (c) Internet Agreement
    (d) Direct Agreement
    (e) Remote Agreement
  8. Direct Agreement
    (a) Preliminary
    (b) Future Performance Agreements
    (c) Internet Agreement
    (d) Remote Agreement
  9. Internet Agreement
    (a) Preliminary
    (b) Future Performance Agreements
  10. Remote Agreement
    (a) Preliminary
    (b) Future Performance Agreements
  11. Credit Agreements
    (a) Preliminary
    (b) Where Not a 'Supplier Credit Agreement'
    (c) Where a 'Supplier Credit Agreement'
  12. An Example of Paramountcy Resolution
------------------------------

1. Overview

(a) General

For reasons explained at the beginning of Part C, Ch.3, s.1 ["Forms of Consumer Agreements: Overview"], the Consumer Protection Act (CPA) scheme is complex and technical. This chapter is an attempt to help the reader unravel one essential aspect of that complexity, without which your attempt to understand your particular consumer situation may be fatally flawed.

A more thorough treatment of this complexity and how to resolve it is set out at this link:

Identifying Which CPA Rules Apply to Your Situation

The particular problem addressed in this chapter is: what to do when multiple CPA rules governing one particular consumer situation conflict with each other.

(b) The Problem

But how can that come to be? Surely if I correctly locate the consumer agreement in its correct 'economic sector' category, the rules that apply to it can just be plainly stated?

It's not that simple. This specific need arises because - as is evident from the four different 'forms' of consumer agreements outlined in Part C, Ch.3: "Forms of Consumer Agreements", and from the numerous separate chapters devoted to the various economic sectors in Part B - one consumer transaction may have more than one (indeed several) different guises in CPA law. That is, one consumerv situation or agreement can meet the definitions of several different 'forms' and sector 'types' under CPA
law - each w ith its own set of rules.

For example, anyone who rents a notebook computer online is entering into an agreement that all at once is:
  • a chattel lease [explained in the chapter of that name in Part B];

  • a 'future performance agreement' [explained in Part C, Ch.3, s.2];

  • an 'internet agreement' [explained in Part C, Ch.3, s.4], and

  • a 'remote agreement' [explained in Part C, Ch.3, s.5].
EACH OF THESE has a full set of rules devoted to them, explaining consumer and supplier rights and duties respecting a range of issues such as prior disclosure of consumer agreements terms, consumer cancellation rights, and so on.

So the consumer is faced with figuring out which of these usually duplicative, and often conflicting, rules applies to their situation. This is the problem of resolving rule conflict, and when conflict arises between the rules it is also accurately described as the issue of 'paramountcy'.

(c) The Basic Rule Conflict Principle? Apply them ALL.

The basic rule, easy to state, but awkward to apply as it means wading through the rules applicable to all the involved forms and types of consumer agreement, is to apply them ALL - as long as you can do so without them conflicting with each other.

That is, in order to determine what CPA rules apply to a particular consumer agreement, the consumer will have to examine and 'total up' the rules that apply to each of the 'forms' and sector 'types' that the consumer agreement qualifies as.

This rule is set out in the CPA [CPA s.4]:
CPA 4 A consumer agreement that meets the criteria of more than one type of agreement to which this Act applies shall comply with the provisions of this Act and of the regulations that apply to each type of agreement for which it meets the criteria, except where the application of the provisions is excluded by the regulations.
(d) Using the Paramountcy Rules

However the above 'basic rule' can only be used where there is no conflict between the rules. That conflict requires the application of intervening paramountcy rules, and that can only be done by first determining all the 'forms' and sector 'types' that your particular consumer agreement falls into [CP Reg 10(1)].

Once that is done, then check ALL of the below sections [ss.2-11] that might apply to your consumer agreement. Between them these paramountcy rules should dictate a coherent answer as to which of the several sets of rules are paramount.


2. Chattel Leases

(a) Preliminary

The topic of 'chattel leases' is covered in a Part B chapter of that name. If you are dealing with a chattel lease, as a preliminary matter you will have to review that chapter to determine whether it is a General (Part VIII) lease (most are) or a 'Specific Non-Traditional' (Part IV) lease. This paramountcy rule only applies to General (Part VIII) chattel leases.

If the consumer agreement is a 'General' chattel lease (Part VIII) as explained in the chapter "Chattel Leases", then those chattel lease rules override the rules set out in (b) to (f) following [CPA Reg 12].

(b) Future Performance Agreements
  • Content and Disclosure Rules [CPA 22]

    These are the content and disclosure requirements for future performance agreements [see Part C, Ch.3, s.2(b) "Forms of Consumer Agreements: Future Performance Agreements: Content and Disclosure Requirements for Future Performance Agreements"]

  • Cancellation Right in Non-Delivery of Consumer Agreement [CPA 23]

    These are the consumer cancellation rights on non-delivery of consumer agreement [see Part C, Ch.3, s.2(c) "Forms of Consumer Agreements: Future Performance Agreements: Consumer Cancellation Right on Supplier Default re Consumer Agreement Delivery"]

  • Prohibition on Executing Security Interest Where 2/3 Payments Made [CPA 25]

    These are the prohibitions on executing a security interest against secured chattel property when the consumer has paid off 2/3 or more of the payments due [see Part C, Ch.3, s.2(e): "Forms of Consumer Agreements: Future Performance Agreements: Where Security Interest Not Enforceable: Not Enforceable Where 2/3 Payment Made"]

  • Cancellation Right on Late Performance [CPA 26]

    These are the consumer cancellation rights on late performance [see Part C, Ch.3, s.2(d) "Forms of Consumer Agreements: Future Performance Agreements: Consumer Cancellation Right Where Late Performance; Exceptions"]
(c) Personal Development Services

All rules [see the chapter of this name in Part B"]

(d) Internet Agreement

All rules [see Part C, Ch.3, s.4: "Forms of Consumer Agreements: Internet Agreements"]

(e) Direct Agreement

All rules [see Part C, Ch.3, s.3: "Forms of Consumer Agreements: Direct Agreements"]

(f) Remote Agreement

All rules [see Part C, Ch.3, s.5: "Forms of Consumer Agreements: Remote Agreements"]


3. Motor Vehicle Repairs

(a) Preliminary

The topic of 'motor vehicle repair' is covered in a Part B chapter of that name. If the consumer agreement is one for a 'motor vehicle repair' as explained in that chapter, then those motor vehicle repair rules override the rules set out in (b) to (g) following [CPA Reg 13].

(b) Future Performance Agreements
  • Content and Disclosure Rules [CPA 22]

    These are the content and disclosure requirements for future performance agreements [see Part C, Ch.3, s.2(b) "Forms of Consumer Agreements: Future Performance Agreements: Content and Disclosure Requirements for Future Performance Agreements"]

  • Cancellation Right in Non-Delivery of Consumer Agreement [CPA 23]

    These are the consumer cancellation rights on non-delivery of consumer agreement [see Part C, Ch.3, s.2(c) "Forms of Consumer Agreements: Future Performance Agreements: Consumer Cancellation Right on Supplier Default re Consumer Agreement Delivery"]
(c) Time Share (Includes Vacation Clubs)

All Rules [see the chapter of that name in Part B]

(d) Personal Development Services

All rules [see the chapter of that name in Part B"]

(e) Internet Agreement

All rules [see Part C, Ch.3, s.4: "Forms of Consumer Agreements: Internet Agreements"]

(f) Direct Agreement

All rules [see Part C, Ch.3, s.3: "Forms of Consumer Agreements: Direct Agreements"]

(g) Remote Agreement

All rules [see Part C, Ch.3, s.5: "Forms of Consumer Agreements: Remote Agreements"].


4. Loan Brokering

(a) Preliminary

The topic of 'loan brokering' is covered in a Part B chapter of that name. If the consumer agreement is one for 'loan brokering' as explained in that chapter, then those loan brokering rules override the rules set out in (b) to (g) following [CPA Reg 14].

(b) Future Performance Agreements
  • Content and Disclosure Rules [CPA 22]

    These are the content and disclosure requirements for future performance agreements [see Part C, Ch.3, s.2(b) "Forms of Consumer Agreements: Future Performance Agreements: Content and Disclosure Requirements for Future Performance Agreements"]

  • Cancellation Right in Non-Delivery of Consumer Agreement [CPA 23]

    These are the consumer cancellation rights on non-delivery of consumer agreement [see Part C, Ch.3, s.2(c) "Forms of Consumer Agreements: Future Performance Agreements: Consumer Cancellation Right on Supplier Default re Consumer Agreement Delivery"]
(c) Time Share

All Rules [see the chapter of that name in Part B]

(d) Personal Development Services

All rules [see the chapter of that name in Part B]

(e) Internet Agreement

All rules [see Part C, Ch.3, s.4: "Forms of Consumer Agreements: Internet Agreements"]

(f) Direct Agreement

All rules [see Part C, Ch.3, s.3: "Forms of Consumer Agreements: Direct Agreements"]

(g) Remote Agreement

All rules [see Part C, Ch.3, s.5: "Forms of Consumer Agreements: Remote Agreements"]


5. Credit Repair

(a) Preliminary

The topic of 'credit repair' is covered in a Part B chapter of that name. If the consumer agreement is one for 'credit repair' as explained in that chapter, then those credit repair rules override the rules set out in (b) to (g) following [CPA Reg 14].

(b) Future Performance Agreements
  • Content and Disclosure Rules [CPA 22]

    These are the content and disclosure requirements for future performance agreements [see Part C, Ch.3, s.2(b) "Forms of Consumer Agreements: Future Performance Agreements: Content and Disclosure Requirements for Future Performance Agreements"]

  • Cancellation Right in Non-Delivery of Consumer Agreement [CPA 23]

    These are the consumer cancellation rights on non-delivery of consumer agreement [see Part C, Ch.3, s.2(c) "Forms of Consumer Agreements: Future Performance Agreements: Consumer Cancellation Right on Supplier Default re Consumer Agreement Delivery"]
(c) Time Share (Includes Vacation Clubs)

All Rules [see the chapter of that name in Part B]

(d) Personal Development Services

All rules [see the chapter of that name in Part B]

(e) Internet Agreement

All rules [see Part C, Ch.3, s.4: "Forms of Consumer Agreements: Internet Agreements"]

(f) Direct Agreement

All rules [see Part C, Ch.3, s.3: "Forms of Consumer Agreements: Direct Agreements"]

(g) Remote Agreement

All rules [see Part C, Ch.3, s.5: "Forms of Consumer Agreements: Remote Agreements"]


6. Time Shares (Includes Vacation Clubs)

(a) Preliminary

Under the CPA, the definition of "time shares" also includes the distinct subject of 'vacation clubs' such as the well-known 'air miles' arrangements. These two topics are treated separately in two Part C chapters by those names, but here are merged into the one term "time shares" as is done in the CPA.

If the consumer agreement is one for 'time shares' as explained in that chapter, then those time share rules override the rules set out in (b) to (f) following [CPA Reg 15].

(b) Future Performance Agreements
  • Content and Disclosure Rules [CPA 22]

    These are the content and disclosure requirements for future performance agreements [see Part C, Ch.3, s.2(b) "Forms of Consumer Agreements: Future Performance Agreements: Content and Disclosure Requirements for Future Performance Agreements"]

  • Cancellation Right in Non-Delivery of Consumer Agreement [CPA 23]

    These are the consumer cancellation rights on non-delivery of consumer agreement [see Part C, Ch.3, s.2(c) "Forms of Consumer Agreements: Future Performance Agreements: Consumer Cancellation Right on Supplier Default re Consumer Agreement Delivery"]
(c) Personal Development Services

All rules [see the chapter of that name in Part B]

(d) Internet Agreement

All rules [see Part C, Ch.3, s.4: "Forms of Consumer Agreements: Internet Agreements"]

(e) Direct Agreement

All rules [see Part C, Ch.3, s.3: "Forms of Consumer Agreements: Direct Agreements"]

(f) Remote Agreement

All rules [see Part C, Ch.3, s.5: "Forms of Consumer Agreements: Remote Agreements"]


7. Personal Development Services

(a) Preliminary

The topic of 'personal development services' is covered in a Part B chapter of that name. If the consumer agreement is one for 'personal development services' as explained in that chapter, then those personal development services rules override the rules set out in (b) to (e) following - EXCEPT where it is ALSO a 'time share' consumer agreement (which includes vacation clubs)(in which case s.6 above applies) [CPA Reg 16].

(b) Future Performance Agreements
  • Content and Disclosure Rules [CPA 22]

    These are the content and disclosure requirements for future performance agreements [see Part C, Ch.3, s.2(b) "Forms of Consumer Agreements: Future Performance Agreements: Content and Disclosure Requirements for Future Performance Agreements"]

  • Cancellation Right in Non-Delivery of Consumer Agreement [CPA 23]

    These are the consumer cancellation rights on non-delivery of consumer agreement [see Part C, Ch.3, s.2(c) "Forms of Consumer Agreements: Future Performance Agreements: Consumer Cancellation Right on Supplier Default re Consumer Agreement Delivery"]
(c) Internet Agreement

All rules [see Part C, Ch.3, s.4: "Forms of Consumer Agreements: Internet Agreements"]

(d) Direct Agreement

All rules [see Part C, Ch.3, s.3: "Forms of Consumer Agreements: Direct Agreements"]

(e) Remote Agreement

All rules [see Part C, Ch.3, s.5: "Forms of Consumer Agreements: Remote Agreements"]


8. Direct Agreement

(a) Preliminary

The topic of 'direct agreements' is covered in Part C, Ch.3, s.3 ["Forms of Consumer Agreements: Direct Agreements"]. If the consumer agreement is a 'direct agreement' as explained in that chapter, then those direct agreement rules override the rules set out in (b) to (d) following - EXCEPT where it is ALSO:
  • a 'time share' consumer agreement (which includes vacation clubs)(in which case s.6 above applies), or

  • a 'personal development services' consumer agreement (in which case s.7 above applies) [CPA Reg 17].
(b) Future Performance Agreements
  • Content and Disclosure Rules [CPA 22]

    These are the content and disclosure requirements for future performance agreements [see Part C, Ch.3, s.2(b) "Forms of Consumer Agreements: Future Performance Agreements: Content and Disclosure Requirements for Future Performance Agreements"]

  • Cancellation Right in Non-Delivery of Consumer Agreement [CPA 23]

    These are the consumer cancellation rights on non-delivery of consumer agreement [see Part C, Ch.3, s.2(c) "Forms of Consumer Agreements: Future Performance Agreements: Consumer Cancellation Right on Supplier Default re Consumer Agreement Delivery"]
(c) Internet Agreement

All rules [see Part C, Ch.3, s.4: "Forms of Consumer Agreements: Internet Agreements"]

(d) Remote Agreement

All rules [see Part C, Ch.3, s.5: "Forms of Consumer Agreements: Remote Agreements"]


9. Internet Agreement

(a) Preliminary

The topic of 'internet agreements' is covered in Part C, Ch.3, s.4 ["Forms of Consumer Agreements: Internet Agreements"]. If the consumer agreement is a 'internet agreement' as explained in that chapter, then those internet agreement rules override the rules set out in (b) and (c) following - EXCEPT where it is ALSO:
  • a 'time share' consumer agreement (which includes vacation clubs)(in which case s.6 above applies),

  • a 'personal development services' consumer agreement (in which case s.7 above applies), or

  • a 'direct agreement' (in which case s.8 above applies) [CPA Reg 18].
(b) Future Performance Agreements
  • Content and Disclosure Rules [CPA 22]

    These are the content and disclosure requirements for future performance agreements [see Part C, Ch.3, s.2(b) "Forms of Consumer Agreements: Future Performance Agreements: Content and Disclosure Requirements for Future Performance Agreements"]

  • Cancellation Right in Non-Delivery of Consumer Agreement [CPA 23]

    These are the consumer cancellation rights on non-delivery of consumer agreement [see Part C, Ch.3, s.2(c) "Forms of Consumer Agreements: Future Performance Agreements: Consumer Cancellation Right on Supplier Default re Consumer Agreement Delivery"]
(c) Remote Agreement

All rules [see Part C, Ch.3, s.5: "Forms of Consumer Agreements: Remote Agreements"]


10. Remote Agreement

(a) Preliminary

The topic of 'remote agreements' is covered in Part C, Ch.3, s.5 ["Forms of Consumer Agreements: Remote Agreements"]. If the consumer agreement is a 'remote agreement' as explained in that chapter, then those remote agreement rules override the rules set out in (b) following - EXCEPT where it is ALSO:
  • a 'time share' consumer agreement (which includes vacation clubs)(in which case s.6 above applies),

  • a 'personal development services' consumer agreement (in which s.7 above applies),

  • a 'direct agreement' (in which case s.8 above applies), or

  • an internet agreement (in which case s.9 above applies) [CPA Reg 19].
(b) Future Performance Agreements
  • Content and Disclosure Rules [CPA 22]

    These are the content and disclosure requirements for future performance agreements [see Part C, Ch.3, s.2(b) "Forms of Consumer Agreements: Future Performance Agreements: Content and Disclosure Requirements for Future Performance Agreements"]

  • Cancellation Right in Non-Delivery of Consumer Agreement [CPA 23]

    These are the consumer cancellation rights on non-delivery of consumer agreement [see Part C, Ch.3, s.2(c) "Forms of Consumer Agreements: Future Performance Agreements: Consumer Cancellation Right on Supplier Default re Consumer Agreement Delivery"]

11. Credit Agreements

(a) Preliminary

The topic of 'credit agreements' is covered in a chapter entitled "Loans and Credit Agreements" in Part B. Many, but not all, loans are a form of credit agreement governed under the CPA.

If you are dealing with a credit agreement, as a preliminary matter you will have to review that chapter to determine whether it is a 'supplier credit agreement' or not. 'Credit agreements' generally are any extension of credit or loans to a consumer, while a 'supplier credit agreement' (which definition excludes chattel leases) has the added element that the credit is meant "to assist the consumer in obtaining goods or services, OTHER THAN a credit or a loan of money".

That is, the good or service sought is not the loan or credit itself (ie. cash), instead the credit agreement is to 'help' the consumer buy some OTHER goods or services, like a car for example [CPA 66]. A "supplier credit agreement" is a situation where the supplier of the goods or services (or a third-party associate) offers 'financing' to the purchasing consumer. A 'supplier credit agreement' thus involves two consumer transactions: the one for purchase of the goods or services, and the one
for financing [this distinction is relevant to (c) below].

That being the case, a credit agreement is not a 'supplier credit agreement' when it only involves the advancing of a loan or general credit to the consumer, unrelated to a purchase of other goods or services.

This distinction matters becasue there are separate paramountcy rules depending on whether the credit agreement is a 'supplier credit agreement' or not, and they are set out below.

(b) Where Not a 'Supplier Credit Agreement'

If the consumer agreement is a credit agreement but not a 'supplier credit agreement', then the rules applicable to it as set out in the Part B chapter of that name override the following rules [CPA Reg 11(1)]:
  • Future Performance Agreement

    All rules [see Part C, Ch.3, s.2: "Forms of Consumer Agreements: Future Performance Agreements"]

  • Internet Agreement

    All rules [see Part C, Ch.3, s.4: "Forms of Consumer Agreements: Internet Agreements"]

  • Direct Agreement

    All rules [see Part C, Ch.3, s.3: "Forms of Consumer Agreements: Direct Agreements"]

  • Remote Agreement

    All rules [see Part C, Ch.3, s.5: "Forms of Consumer Agreements: Remote Agreements"]
(c) Where a 'Supplier Credit Agreement'

Recall the distinction made in (a) above between the dual 'financing' and 'purchase' aspects of 'supplier credit agreements'.

The rules applicable to 'supplier credit agreements' set out in the Part B chapter entitled 'Credit Agreements', insofar as they relate to any fixed (ie. certain in amount) 'financing' aspects, override the below rules. However those 'credit agreement rules' do NOT override the below rules regarding the 'purchase' aspect of the transaction (except where the good or service obtained is a loan or general credit) [CPA Reg 11(2)]:
  • Future Performance Agreement

    All rules [see Part C, Ch.3, s.2: "Forms of Consumer Agreements: Future Performance Agreements"]

  • Time Share (which includes Vacation Clubs)

    All Rules [see the chapter of that name in Part B]

  • Personal Development Services

    All rules [see the chapter of that name in Part B]

  • Direct Agreement

    All rules [see Part C, Ch.3, s.3: "Forms of Consumer Agreements: Direct Agreements"]

  • Internet Agreement

    All rules [see Part C, Ch.3, s.4: "Forms of Consumer Agreements: Internet Agreements"]

  • Remote Agreement

    All rules [see Part C, Ch.3, s.5: "Forms of Consumer Agreements: Remote Agreements"]

12. An Example of Paramountcy Resolution

Here's an example of the paramountcy rules in operation.

Assume the case of a gym membership sold over the telephone to a consumer who gave their credit card number for the first of an indefinite number of ongoing monthly payments.

Such a consumer agreement falls into all of the following separate CPA 'sector' and 'form' categories and imposes multiple disclosure duties on the supplier (re terms, price, etc) as follows:
  • as a "remote agreement" (made over the phone) under CPA 45 (and CP Reg 37);

  • as a "future performance agreement" (services to be provided in the future) under CPA 22 (and CP Reg 24);

  • as a "personal development services agreement" (gym membership) under CPA 30 (and CP Reg 28 or 29).
The 'normal rule' is that ALL of them would combine such that in effect the supplier must ensure that the disclosure content for ALL of the three is provided to the consumer prior to or with the execution of the consumer agreement [CPA 4]:
CPA 4
A consumer agreement that meets the criteria of more than one type of agreement to which this Act applies shall comply with the provisions o f this Act and of the regulations that apply to each type of agreement for which it meets the criteria, except where the application of the provisions is excluded by the regulations.
But the separate disclosure duties are often repetitious in content, and can even be in conflict - so we apply to 'paramountcy' rules to see if we can get a clearer understanding of which rules should apply.

In this case the General Regulation provides that [CP Reg 16]:
CP Reg 16 Sections 22, 23 and 37 to 47 of the Act do not apply to a personal development services agreement that is also a future performance agreement, a direct agreement, an internet agreement or a remote agreement but is not a time share agreement (time share agreements include vacation clubs).
The example consumer agreement IS a personal developemnt services agreement, and as well it is both a remote agreement AND a future performance agreement so this rule appe ars to dictate that the 'future performance' duties are overridden (CPA 22) and that the 'remote agreement' duties are also overridden (CPA 45), leaving the 'personal development service' disclosure duties of CPA 30 to apply.

The same conclusion is reached when we review s.7 above ["Personal Development Services"] and s.10 above ["Remote Agreements"].

Simple, huh? ... NOT!

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