to access an attentive government that listens and responds positively to consumer grievances and suggestions.
From Rights to Laws
Today these rights are recognized and regulated through the codification of civil and criminal statutes. We have thousands of laws and regulations relating to warranties, product liability, misrepresentation (false advertising, etc.), competition (price-fixing), and negligence and punitive damages.
Warranties
The manufacturer’s or dealer’s warranty is an expressed verbal or written undertaking that a product or service will be as represented, or the contract will be cancelled. This promise remains in force as long as the warranty hasn’t expired.
The main drawback of an expressed warranty is that it allows the seller and manufacturer to act as judge and jury when deciding whether a product is defective or a service is unsatisfactory. Rarely does it provide a money-back guarantee.
Some of the more familiar lame excuses used in denying expressed warranty claims are “You abused the car”; “You spilled water on the cell phone”; “The dryer was poorly maintained”; “Bird droppings ruined your paint”; or, best of all, “It’s rusting from the outside, not the inside.” Or even “It passed the safety inspection.” Ironically, the expressed warranty sometimes says that the goods or services are guaranteed to have no guarantee.
And, when the warranty’s clauses (or lack thereof) don’t deter claimants, some sellers simply say that a verbal warranty or representation as to performance or durability is unenforceable — not true. Fortunately, these attempts to weasel out of the warranty and limit the seller’s liability seldom make it through judicial review.
Justice Searle put it this way in the Chams small claims court decision:
Ford’s warranty attempts to limit its liability to what it grants in the warranty. It is ancient law that one who attempts to limit his liability by, for example, excluding common law remedies, must clearly bring that limitation to the attention of the person who might lose those remedies. The evidence in this case is clear: The buyer of even a new car does not get a warranty booklet until after purchasing the car although he “would be” told the highlights sooner (2013 Lemon-Aid New Cars and Trucks guide, pp.136–42).
Thankfully, car owners get another kick at the can with the implied warranty — this is the promise of “fitness.” In the unreported Saskatchewan decision Maureen Frank v. General Motors of Canada Limited (see chapter 6), the judge declared that paint discoloration and peeling shouldn’t occur within eleven years of the purchase of a vehicle. Both of the above-cited judgments leave no doubt that the implied warranty usually trumps an expressed restriction.
The implied warranty is solidly supported by a large body of federal and provincial laws, regulations, and jurisprudence, and it protects you primarily from hidden dealer- or factory-related defects. But the concept also includes misrepresentation and a host of other scams.
This is a powerful “super” warranty that sellers never tell you about. It also holds businesses to a higher standard of conduct than private sellers because, unlike private sellers, professionals are presumed to be aware of the defects present in the products they sell. That way, they can’t just pass the ball to the manufacturer and then walk away from the dispute.
The implied warranty is so effective with cars and other goods because it:
is always in effect and cannot be abrogated by a bad faith clause in the contract like “sold, as is, without warranty”;
is frequently used by small claims court judges to give refunds to plaintiffs “in equity” (out of fairness) rather than through a strict interpretation of contract law;
establishes the concept of “reasonable durability,” meaning that parts are expected to last for a reasonable period of time as stated in jurisprudence, judged by independent experts, or expressed in extended warranties given by the manufacturer in the past through “goodwill” warranty extensions;
covers the entire product and can be applied for whatever period of time the judge decides;
can require that the product be taken back, or that a major repair cost be refunded;
can help plaintiffs claim compensation for extra expenses incurred because of a product’s failure, including inconvenience, mental distress, missed work, lodging, and ruined vacations — as well as exemplary (or punitive) damages in cases where the seller behaved particularly badly;
applies during and after the expiration of the manufacturer’s or dealer’s expressed or written warranty and requires that a part or repair will last a “reasonable” period of time.
Product Liability
Judges usually apply the implied or legal warranty when there’s no expressed warranty, or when the manufacturing defects remain uncorrected. Notably, two landmark judicial decisions uphold implied warranties in Canada, one relative to drinks served in a bar and the other concerning car quality. Additionally, our courts have been active in applying the implied warranty in everything from electronic goods to botched vacations, the habitability of rented apartments, home and condo purchases, the safety of blood transfusions, and whether a bar association can be held responsible for a careless act when no malice is intended. This last case shows that the concept of “product liability” applies not only within the realm of products but also when it comes to services.
Let’s first take a look at the Finney v. Barreau du Quebec decision rendered in 2004, in which the Supreme Court awarded an aggrieved client of a member of the Barreau (bar) $25,000, plus solicitor and client costs, for “moral damages” because her lawyer failed to prosecute diligently and had a history of serious professional misconduct. What makes this case unique is that it proves lawyers aren’t above the law when their work is sub-standard. This was the first time that a professional regulatory body was found liable for failing to protect the public. As the Court noted, “The delegation of [regulatory] powers by the State imposes obligations on the governing bodies of the profession, which are then responsible for ensuring the competence and honesty of their members in their dealings with the public.”
The Court ruled the Barreau could not escape liability by pleading good faith in the performance of its duties: “It would be contrary to the fundamental objective of protecting the public if this immunity were interpreted as requiring evidence of malice or intent to harm to rebut the presumption of good faith. Gross or serious carelessness is incompatible with good faith.”
This judgment was a shot across the bow of all self-regulated professions and should help ensure they act in a timely manner to discipline members who don’t provide what they promise, whether they are doctors, lawyers, or accountants.
In Donoghue v. Stevenson, [1932] A.C. 562 (H.L.), the court had to determine if the manufacturer of a bottle of ginger beer owed a duty to a consumer who suffered injury as a result of finding a decomposed snail in the bottle after consuming part of the bottle’s contents. Lord Atkin, in finding liability against the manufacturer, established the principle of negligence. His reasons have been followed and adopted in all the common-law countries:
The rule that you are to love your neighbour becomes in law, you must not injure your neighbour; and the lawyer’s question, who is my neighbour? receives a restricted reply. You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who, then, is my neighbour?
The answer seems to be persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question.
More than three decades ago, the Supreme Court of Canada clearly affirmed, in General Motors Products of Canada Ltd. v. Kravitz, [1979] 1 S.C.R. 790, that automakers and their dealers are jointly liable for the replacement or repair of a vehicle if independent testimony shows that it is afflicted with factory-related defects which compromise its safety or performance.
The