Direct Sales Contract

For information about direct sales contracts select from the options below.

 

• Requirements
• Contents
• Down Payments
• Terms and Conditions
• Cancellation Rights 

 

Requirements (section 6, regulations 7, 8, 9)

The form and content of written direct sales contract used by a direct seller is regulated. A direct sales contract must:

• Be filed with the Registrar (contact the Consumer Protection Division) – once accepted for filing this is the only form approved for use
• Be in writing – except if the sale is less than $100
• Contain certain prescribed content information (see  Contents of the Contract)
• Contain a statement of cancellation rights (if a contract is not required because the sale is under $100, a statement of cancellation rights must still be provided to the purchaser at the time of purchase)
• Be given to the purchaser (a copy of the contract is acceptable for this purpose)
• Sample form of contract.

A licensee can develop their own version for use. It must however, be accepted for filing with the Registrar before it can be used.

 

Contents of the Contract (regulation 8)

A written direct sales contract is to clearly set out the following:

• the name and address of the purchaser;
• the name, business address, telephone number and, where applicable, facsimile number of the vendor;
• the name of the salesperson printed or signed in a legible manner …;
• the date on which the direct sales contract is signed and the place … the direct sales contract is made;
• a detailed description of the goods or services…;
• a statement of cancellation rights that conforms with the requirements of the Act (section 9);
• an itemized purchase price for the goods or services;
• the total amount payable under the direct sales contract;
• the terms and conditions of payment;
• in the case of a direct sales contract for the future supply of goods or the future supply of services or both:
• the supply date for the goods or the commencement date for the supply of services or both; and
  • the completion date for the supply of services or the supply of services and goods;
• where credit is extended or arranged by a direct seller:
  • a statement of any security taken for securing payment of the purchaser’s debt obligations; and
  • the cost of credit, in accordance with The Cost of Credit Disclosure Act and the regulations…;
• where goods are accepted as a trade-in, a description of and the value of the trade-in;
• the signatures of the purchaser and the direct seller;
• where the vendor is a direct sales contractor{meaning home renovator}:
  • a detailed description of the quality and type of materials to be used under the contract; and
  • the services and work to be carried out under the contract.

 

Down Payments from a Consumer (Registrar’s Position, and subsection 6(5))

Down payments prior to the delivery of goods or services should be kept to a minimum, unless it’s a specially ordered item; the higher the amount paid in advance, the greater the risk of loss to the consumer. A vendor’s policy or pattern of requiring a high down payment may be one of the factors used in determining the amount of the licensing bond required.

Note that direct sellers of home renovation products or services are prohibited from requiring a consumer to pay more than 15 per cent of the total contract price (if the goods or service have not been fully provided) until the expiration of the 10-day cancellation period.

 

Terms and Conditions Contained in a Direct Sales Contract

Any additional terms and conditions included by the seller must be contained in the sales contract filed with the Registrar of The Direct Sellers Act. As a general rule, the terms and conditions portion of the contract will not be accepted for filing if it contains:

• terms and conditions that are appear to be unfairly one-sided
• restrictions on the use of the Courts in Saskatchewan
• arbitration clauses that require a consumer to attend out of Province
• terms that purport to waive legislated rights, unless the applicable legislation so allows
• terms that suggest that the purchaser does not have any statutory rights including the buyers’ right to cancel and warranty rights.

 

Cancellation Rights (sections 22-23, regulation 9)

A direct sales contract must contain a statement of cancellation rights called the Buyers Right to Cancel. That statement is outlined in legislation and cannot be changed.

The statement of cancellation rights is to:

• contain the words “Buyer’s Right to Cancel”;
• show the heading “Buyer’s Right to Cancel” in not less than 12-point bold type;
• show the statement of 10-day cancellation rights in not less than 12-point type; and
• show the remainder of the information in not less than 10-point type.

Where the statement of cancellation rights is not located on the first page of the written contract, there is to be a notice on the first page of the written contract in not less than 12-point bold type, directing the purchaser to the location of the statement of cancellation rights.

Where a statement of cancellation rights is located in a separate document from the written contract, it is to include the business name, business address, telephone number and, where applicable, facsimile number of the vendor.

Where a written contract is not required because the sale is under $100, the direct seller shall provide in a document a statement of cancellation rights that complies with subsection (1), and the document is to include the name, business address, telephone number and facsimile number, where applicable, of the vendor.