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Report No. 199

Canada

In Canadian jurisdictions unconscionable conduct is an offence. All common law Provinces have an Unconscionable Transactions Relief Act, which allows for the re-opening of unfair credit transactions.

(A) The Ontario Business Practices Act, 1990 deems "an unconscionable consumer representation" to be an unfair practice. Unconscionability would include the procedural matters such as physical infirmity, ignorance, illiteracy, and inability to understand the language of an agreement, but also:

2.2.ii. that the price grossly exceeds the price at which similar goods or services are readily available to like consumers;

2.2.v. that the proposed transaction is excessively onesided in favour of someone other than the consumer; and

2.2.vi.that the terms or conditions of the proposed transaction are so adverse to the consumer as to be inequitable.

See (Discussion Paper, Unfair Contract Terms) (2004) (Victoria)

(B) The Saskatchewan Consumer Protection Act, 1996 also prohibits unfair practices and section 6(q) refers to:

"Taking advantage of a consumer by including in a consumer agreement terms or conditions that are harsh, oppressive or excessively one sided."

(C) The Alberta Fair Trading Act, 1998 includes in a list of unfair practices:

Section 6(3)(d) refers to charging a price for goods or services that grossly exceeds the price at which similar goods or services are readily available without informing the consumer of the difference in price and the reason for the difference; and section 6(3)(c) to include in a consumer transaction terms or conditions that are harsh, oppressive or excessively one-sided.

(D) In the British Columbia the substantive provisions of the Business Practices and Consumer Protection Act, 2004 that address unfair contract terms are, in large part, a restatement of the law as it was set out in the British Columbia's two former Consumer Protection Statutes, the Trade Practice Act, 1996 and the Consumer Protection Act, 1`996.

The Trade Practice Act, 1996 of British Columbia, in determining whether an act or practice is unconscionable, requires a court to consider all the surrounding circumstances of which the supplier knew or ought to have known, including procedural matters and section 4(3)(c) that, at the time the consumer transaction was entered, the price grossly exceeded the price at which similar subjects of similar consumer transactions were readily obtainable by similar consumers; and section 3(3)(e) that the terms or conditions on, or subject to, which the consumer transaction was entered by the consumer are so harsh or adverse to the consumer as to be inequitable.

The Business Practices and Consumer Protection Act, 2004 adopts the approach of the Trade Practice Act which contained a provision that was intended to be statutory embodiment of the judicial doctrine of unconscionability. Broadly, the provisions of the Business Practices and Consumer Protection Act, 2004 relate to the consolidation and regulatory structure rather than the substantive law. The British Columbia Law Institute in its recent Report on Unfair Contract Terms [BCLI Report No.35, February, 2005] studied various options to reform the law of unfair contract terms. However, it did not recommend any legislative change in respect of unfair contract terms.

(E) Quebec Civil Code (1991) has a different approach to the Common

Law Jurisdiction (sections 1432 to 1438).



Unfair (Procedural and Substantive) Terms in Contract Back




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