Bill 239 (Legislature 22, Session 1)

L22 S1 2887

Alberta — Bills

1989 BILL 239 Fkst Session, 22nd Legislature, 38 Elizabedi II THE LEGISLATIVE ASSEMBLY OF ALBERTA BILL 239 UNFAIR CONTRACT TERMS ACT MR. WRIGHT Fkst Reading Second Reading Committee of the Whole Third Reading Royal Assent

Bill 239 Mr. Wright Act BILL 239 1989 UNFAIR CONTRACT TERMS ACT (Assented to , 1989) HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Alberta, enacts as foUows:

Definitions and < /i \ T x.t- • A application of 1(1) ^ tUlS ACt, (a) "business" includes a profession and the activities of any govemment department or local or public audiority; (b) "goods" has the same meaning as in the Sale of Goods Act; (c) "negligence" means the breach (

i) of any obligation, arising from the express or implied terms of a contract, to take reasonable care or exercise reasonable skill in the performance of die contract, (

U) of any common law duty to take reasonable care or exercise reasonable skUl, but no any stricter duty, (Ui) of die common duty of care imposed by the Oc cupiers' Liability Act; (d) "notice" includes an announcement, whether or not in writing, and any other communication or purported communication;

(e) "personal injury" includes any disease and any impair ment of physical or mental condition.

(2) Subject to

section 6(4), sections 2 to 7 apply only to business liability, diat is liability for breach of obligations or duties arising (

a) from things done or to be done by a person in the course of a business, whether his own business or another's, or (

b) from the occupation of premises used for business purposes of the occupier.

(3) In relation to any breach of duty or obligation, it is immaterial for any purpose of this Act whether the breach was inadvertent or intentional, or whether UabiUty for it arises dkectiy or vicariously.

(4) Sections 2 to 4 of this Act do not extend to (

a) any contract of insurance, including a contract to pay an annuity on human life; (

b) any contract so far as it relates to the creation or transfer of an interest in land, or to the termination of such an interest, whether by extinction, merger, surrender, forfeiture or otherwise; (

c) any contract so far as it relates (

i) to the information or dissolution of a company, which means any body corporate or unincorporated association and includes a parmership, or (ii) to its constitution or the rights or obligations of its corporators or members; (

d) any contract so far as it relates to the creation or transfer of securities or of any right or interest in securities.

(5) Section 2(1) and (2) does not extend to a contract of employ ment, except in favour of the employee.

Negligence liability 2(1) A person cannot by reference to any contract term or to a notice given to persons generally or to particular persons exclude or restiict his liability for death or personal injury resulting from negligence.

(2) In the case of other loss or damage, a person cannot so exclude or restrict his liabUity for negUgence except insofar as the term or notice satisfies die requkement of reasonableness.

(3) Where a contract term or notice purports to exclude or restrict liability for negligence a person's agreement to or awareness of it is not of itself to be taken as indicating his voluntary acceptance of any risk. Liability arising in contract 3(1) This

section applies as between contracting parties where one of them deals as consumer or on the other's written standard terms of business.

(2) As against the party, the other cannot by reference to any contract term (

a) when himself in breach of contract, exclude or resti'ict any UabiUty of his in respect of the breach, or (

b) claim to be entitled (

i) to render a contractual performance substantially different from that which was reasonably expected of him, or (

U) in respect of the whole or any part of his contractual obUgation, to render no performance at all, except insofar as the contract terms satisfied the requkement of reasonableness. Unreasonable indemnity clauses 4(1) A person dealmg as consumer cannot by reference to any contract term be made to indemnify another person, whether a party to the contract or not, in respect of UabiUty that may be incurred by the other for negligence or breach of contract, except msofar as the contract term satisfies the requkement of reasonableness.

Guarantee of consumer goods

(2) This

section applies whether the liability in question (

a) is dkectiy that of the person to be indemnified or is incurred by him vicariously; (

b) is to the person dealing as consumer or to someone else. 5(1) In the case of goods of a type ordinarily supplied for private use or consumption, where loss or damage (

a) arises from the goods proving defective while in consumer use, and Sale and conditional sales (

b) results from the negligence of a person concemed in die manufacture or distiibution of the goods, liability for the loss or damage cannot be excluded or restricted by reference to any contract term or notice contained in or operating by reference to a guarantee of the goods.

(2) For the purpose of this

section (

a) goods are regarded for private use or consumption when a person is using them, or has them in his possession for use, otherwise than exclusively for the purposes of a business, and (

b) anything in writing is a guarantee if it contains or purports to contain some promise or assurance, however worded or presented, that defects wUl be made good by complete or partial replacement, or by repak, monetary compensation or otherwise.

(3) This

section does not apply to parties to a contract under or in pursuance of which possession or ownership of the goods passes. 6(1) LiabUity for breach of the obUgations arising from

section 15(

a) of the Sale of Goods Act cannot be excluded or restiicted by reference to any contract term.

(2) As against a person deaUng as consumer, liability for breach of the obUgations arising from

section 16, 17 or 18 of the Sale of Goods Act cannot be excluded or restricted by reference to any contract term.

(3) As against a person dealing otherwise than as consumer, the liability specified in subsection (2) cannot be excluded or restricted by reference to a contract term, but only insofar as the term satisfies the requkement of reasonableness.

(4) The liabUities referred to in this

section are not only the business UabiUties defined in

section 1(2), but include those arising under any contract of sale of goods or conditional sales agreement. Miscellaneous contracts under which goods pass 7(1) Where the possession or ownership of goods passes under or in pursuance of a contract not govemed by the law of sale of goods or conditional sales, subsections (2) to (4) apply as regards the effect to be given to a contract terms excluding or restiicting liability for breach of obligation arising by implication of law from the nature of the contract

(2) As against a person deaUng as consumer, liability m respect of the goods' correspondence with description or sample, or thek quality or fimess for any particular purpose, cannot be excluded or restricted by reference to any such term.

(3) As against a person dealing otherwise than as consumer, that liability can be excluded or restricted by reference to such a term, but only insofar as the term satisfies the requkement of reasonableness.

(4) LiabUity in respect of (

a) the right to ti-ansfer ownership of die goods, or give possession, or (

b) the assurance of quiet possession to a person taking goods in pursuance of the conkact, cannot be excluded or restiicted by reference to any such term except insofar as the term satisfies the requkement of reasonableness. Misrepresenta tion 8 If a contract contains a term which would exclude or restrict (

a) any UabiUty to which a party to a contract may be subject by reason of any misrepresentation made by him before the contract was made, or

(

b) any remedy available to another party to the conkact by reason of such misrepresentation, that term shall be of no effect except insofar as it satisfies the requkement of reasonableness for the party claiming that the term satisfies that requkement to show that it does. Effect of breach 9(1) Where for reliance upon it a contract term has to satisfy the requkement of reasonableness, it may be found to do so and be given effect accordingly notwithstanding that the contract has been terminated either by breach or by a party electing to treat it as repudiated.

(2) Where on a breach the contract is nevertheless affirmed by a party entitied to treat it as repudiated, this does not of itself exclude the requkement of reasonableness in relation to any contract term.

Evasion by secondary contract Reasonableness test 10 A person is not bound by any contract term prejudicing or taking away rights of his which arise under, or in connection widi the performance of, another conkact, so far as those rights extend to the enforcement of another's UabiUty which this Act prevents diat other from excluding or restricting. 11(1) In relation to a contract term, the requkement of reasonable ness for the purposes of this Act is that the term shaU have been a fak and reasonable one to be included having regard to the ck cumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made.

(2) In determining for the purposes of

section 6 or 7 whether a contract term satisfies the requkement of reasonableness, regard shaU be had in particular to the matters specified in die

Schedule to this Act, but this subsection does not prevent a court or arbitrator from holding, in accordance with any mle of law, that a term purports to exclude or restrict any relevant liability is not a term of the contract.

(3) In relation to a notice, not being a notice having conti:actual effect, the requirement of reasonableness under this Act is diat it should be fak and reasonable to aUow reliance on it, having regard to all the ckcumstances obtaining when the liabUity arose or, but for the notice, would have arisen.

(4) Where by reference to a contract term or notice a person seeks to restrict liabUity to a specified sum of money, and the question arises, under this or any other Act, whether the term or notice satisfies the requirement of reasonableness, regard shall be had in particular, but without prejudice to subsection (2) in the case of contract terms, to (

a) the resources which he could expect to be available to him for the purpose of meeting the UabiUty should it arise, and (

b) how far it was open to him to cover himself by insurance.

(5) It is for those claiming that a contract term or notice satisfies the requkement of reasonableness to show that it does. Dealing as consumer 12(1) A party to a contract deals as consumer in relation to another party if (

a) he neither makes the conti-act in the course of a business nor holds himself out as doing so, and (

b) the other party does make the contract in the course of a business, and (

c) in the case of a conti-act govemed by the law of sale of goods or conditional sale, or by

section 7 of this Act, die goods passmg under or in pursuance of the conti-act are of a type ordinarily supplied for private use or consumption.

(2) On a sale by auction or by competitive tender the buyer is not in any circumstances to be regarded as dealing as consumer.

(3) Subject to this section, it is for those claiming diat a party does not deal as consumer, to show that he does not. Varieties of exemption clause 13(1) To the extent diat this Act prevents the exclusion or resti-ic- tion of any liability it also prevents (

a) making tiie Uability or its enforcement subject to restrictive or onerous conditions;

CommcnccmEnt (

b) excluding or restiictmg any right or remedy in respect of the liabUity, or subjectkig a person to any prejudice in conse quence of his pursuing any such right or remedy; (

c) excluding or restricting mles of evidence or procedure, and, to diat extent, sections 2 and 5 to 7 also prevent excluding or restiictmg liabUity by reference to terms and notices which exclude or restrict the relevant obligation or duty.

(2) An agreement ki writing to submit present or future differences to arbitration is not to be treated under this Act as excluding or restricting any liability. 14(1) This Act comes into force on Proclamation.

(2) Nothing in this Act applies to conti-acts made before die date on which it comes into force, but subject to tiiis, it applies to liability for any loss or damage which is suffered on or after that date.

SCHEDULE GUIDELINES FOR APPLICATION OF REASONABLENESS TEST The matters to which regard is to be had in particular for the purposes of sections 6(3), 7(3) and (4) are any of die foUowing which appear to be relevant: (

a) die strength of the bargaining positions of the parties relative to each other, taking into account, among other things, altemative means by which the customer's requkements could have been met; (

b) whether die customer received an inducement to agree to the term, or m accepting it had an opportunity of entering into a similar a contract with other persons, but without having to accept a similar term; (

c) whether the customer knew or ought reasonably to have known of the existence and extent of the term, having regard, among other things, to any custom of the trade and any previous course of dealing between the parties; (

d) where the term excludes or restiicts any relevant liability if some condition is not complied with, whether it was reasonable at the time of the contract to expect that compUance widi that condition would be practicable; (

e) whether the goods were manufactured, processed or adapted to the special order of the customer. Title: 1989 (22nd, 1st) Bill 239, Unfair Contract Terms Act

Document details

Collection	Alberta — Bills
Citation	L22 S1 2887
Type	bill
Volume / chapter	L22 S1 2887
Language	en
Format	json
Source	PROVINCIAL
Identifier	8ac60b645093e8a75e6e3e6c0bccca3f7439185d

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