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7. Extended Warranties

(a) Types of Warranties Defined

. Warranties Generally

A motor vehicle warranty is an contractually express or inferred term whereby a party is obliged "to provide coverage of the costs associated with the repair or replacement of components of a motor vehicle, including the labour necessary to repair or replace those components" (ie. parts and labour) [Reg s.1].

. Statutory Warranties Distinguished

At Ch.1, s.3 "Sale of Goods Act (SGA): and s.4 "Consumer Protection Act", this Guide sets out statutory warranties that, by and large, apply to most chattel property purchases.

Roughly, these are old English common law warranties that have been incorporated into Ontario law in the Sale of Goods Act ('SGA') and, "unless the circumstances of the contract are such as to show a different intention", include [SGA 13]:

• "an implied condition on the part of the seller that in the case of a sale the seller has a right to sell the goods, and that in the case of an agreement to sell the seller will have a right to sell the goods at the time when the property is to pass;"
  
  
• "an implied warranty that the buyer will have and enjoy quiet possession of the goods"; and
  
  
• "an implied warranty that the goods will be free from any charge or encumbrance in favour of any third party, not declared or known to the buyer before or at the time when the contract is made."

As well, under some circumstances the "quality or fitness for any particular purpose of goods" may also be warranted [SGA 15]. This has been discussed above in the 'material disclosure' paragraphs of both new and used motor vehicles (above) [Reg 39(2)27, 40(2)1].

For consumers [an "individual acting for personal, family or household purposes and does not include a person who is acting for business purposes": CPA 1], the Consumer Protection Act, 2002 ('CPA') adds the following [CPA 9]:

• "the supplier is deemed to warrant that the services supplied under a consumer agreement are of a reasonably acceptable quality";
  
  
• "the implied conditions and warranties applying to the sale of goods by virtue of the Sale of Goods Act are deemed to apply with necessary modifications to goods that are leased or traded or otherwise supplied under a consumer agreement";
  
  
• "any term or acknowledgement, whether part of the consumer agreement or not, that purports to negate or vary any implied condition or warranty under the Sale of Goods Act or any deemed condition or warranty under this Act is void".

. Manufacturer's Warranty

A manufacturer's warranty is what it sounds like, a warranty granted by the manufacturer to a new motor vehicle.

. Extended Warranties

An 'extended' warranty is essentially an express contractual warranty. It is one that is "in addition to a warranty supplied by law" [statutory warranties] or "implied by the operation of law" [common law warranties]. It may be offered by the dealer directly, or by a third party (usually a finance company) - typically facilitated 'through' the dealer.

The MVDA definition of 'extended warranties' [Reg s.1], exempts manufacturer's warranties [warranties from a manufacturer or an MVDA-declared authorized distributor of the manufacturer] [Reg 2(1)21,7].

(b) Requirements for the Sale of Extended Warranties

Dealers may not sell, directly or indirectly, an extended warranty to a customer unless either [Reg 47(1)]:

• the performance of the warranty is insured by an insurer licensed under the Insurance Act; or
  
  
• the warranty seller has provided security to the Motor Vehicle Dealers Compensation Fund [see Ch.6] for extended warranties, in the form of an irrevocable letter of credit in the following amounts:

  . $100,000, if the seller is the dealer who sold or leased the vehicle to the customer, or
  
  . $500,000, in any other case.

The MVDA requires that where the dealer is not the direct extended warranty provider that they are still "liable for the amount, not covered" by the $500,000 security mentioned above, of any claim under the warranty that cannot be settled because the seller of the warranty is no longer in business [Reg 47(3)].

(c) Extended Warranty Contract Disclosure and Formalities

A dealer that sells an extended warranty to a customer shall ensure that the contract for the extended warranty includes, in a clear, comprehensible and prominent manner, the following information [Reg 47(4)]:

• the name and address of the purchaser of the warranty;
  
  
• the name and address of the warranty holder, if the purchaser is not the warranty holder;
  
  
• the business address, a registered name and the registration number of the dealer that entered into the contract, together with the legal name of the dealer if it is different from the registered name;
  
  
• the registered name and registration number of the salesperson, if any, who is acting on behalf of the dealer;
  
  
• all restrictions, limitations and conditions imposed by the seller of the warranty under the warranty;
  
  
• a statement as to whether or not the warranty is insured and, if it is insured, the name and address of the insurer;
  
  
• the make, model and model year of the vehicle;
  
  
• the vehicle identification number of the vehicle;
  
  
• the total sale price of the vehicle, if the vehicle is being sold;
  
  
• the lease value of the vehicle [determined under CPA Genl Reg s.72(1)(a), the definition of “lease value of the leased goods”], if the vehicle is being leased and if,
  
  . CPA Part VIII [Leasing] applies to the lease, or
  
  . CPA Part VIII [Leasing] does not apply to the lease by reason only of the fact that the purchaser of the warranty is not a consumer as defined in that Act.
  
  
• a description of the components of the vehicle covered by the warranty that is sufficient to identify them with certainty and, if the warranty is related to the manufacturer’s warranty, a description for the components that indicates how the warranty extends the manufacturer’s warranty;
  
  
• the commencement date and end date of the warranty, expressed by way of calendar date, kilometres that the vehicle has been driven or a combination of both;
  
  
• the maximum individual claim limits, if any, under the warranty;
  
  
• the maximum total liability, if any, of the seller of the warranty under the warranty;
  
  
• the amount of the deductible, if any, for claims under the warranty;
  
  
• the sale price of the warranty, including an itemized list of all fees or costs that must be paid at the time of purchase or afterwards;
  
  
• the obligations of the warranty holder under both the warranty and the manufacturer’s warranty, if applicable;
  
  
• whether or not the warranty is transferable to another owner or lessee of the vehicle and the amount of any fee for that transfer.

(d) Formalities of Contract

The dealer shall ensure that each extended warranty contract [Reg 47(5)]:

• shall be signed by the parties,
  
  
• if a salesperson is acting on behalf of the dealer, the salesperson signs next to the indication on the contract of their 'registered name and registration number' in the disclosure;
  
  
• the customer receives a copy of the contract immediately after signing it.

(e) Facilitated Sales of Extended Warranties

As is explained in "Facilitated Sales" [see Ch.4, s.1(c)], often the dealer is only the agent for the extended warranty provider (the 'principal'), but the dealer engages in the direct negotiation with the customer. The MVDA deems the act of a dealer forwarding a customer-completed extended warranty application to the principal as bringing it within the MVDA 'facilitation' disclosure rules (ie. "deemed to facilitate the sale of the warranty") [Reg 47(2)].

A dealer shall not facilitate the sale of an extended warranty unless the contract includes, in a clear, comprehensible and prominent manner [Reg 47(6)]:

• all the disclosure information (except the dealer and salesperson name and address, registered name and registration number [under Reg 47(4)3-4]);
  
  
• the name and address of the seller of the warranty;
  
  
• a registered name and the registration number of the dealer who facilitated the sale of the contract, together with the legal name of that dealer if it is different from the registered name; and
  
  
• the registered name and registration number of the salesperson, if any, who is acting on behalf of the dealer who facilitated the sale of the contract.

If a dealer facilitates the sale of an extended warranty through the dealer to a customer, the dealer shall [Reg 47(7)]:

• use best efforts to ensure that the contract meets the requirements set out in "(d) Formalities of Contract" (above), other than the salesperson's signature;
  
  
• ensure that the dealer and salesperson (if any) signs next to the disclosure indications on the contract for their "registered name and the registration number"; and
  
  
• within seven days after the parties enter into the contract for the warranty, provide the seller of the warranty with:

  . all documents detailing the contract that the dealer has in its possession,
  
  . all payments that the dealer has received from the purchaser, and
  
  . a statement that accurately describes the condition of the motor vehicle and the distance the motor vehicle has been driven, if the dealer has such a statement in its possession.

8. Service Plans

(a) Overview

A 'service plan' is a contract, sold (directly by the dealer or 'facilitated' indirectly for a third party supplier) to a customer (purchaser or lessee) by a dealer "before the vehicle is delivered", "to provide goods or services to alter or maintain the vehicle, whether the goods or services are provided before the vehicle is so delivered or afterwards". If such services are provided by a manufacturer, authorized distributor or an associated person (which can include a corporation) then they are exempt from these 'service plan' rules [Reg 1 "service plan"].

(b) Disclosure Content and Formalities for Direct Sales

Dealers directly selling service plans to a customer shall disclose the following "in a clear, comprehensible and prominent manner" [Reg 48(2)]:

• 1. Name and Address
  
  The name and address of the purchaser of the service plan.
  
  
• 2. Name and Address of Beneficiary of Service Plan (if applicable)
  
  The name and address of the beneficiary of the service plan, if the purchaser is not the beneficiary.
  
  
• 3. Address, Name/s and MVDA Number of Dealer
  
  The business address, a registered name and the registration number of the dealer that entered into the contract, together with the legal name of the dealer if it is different from the registered name.
  
  
• 4. Name and MVDA Number of Salesperson
  
  The registered name and registration number of the salesperson, if any, who is acting on behalf of the dealer.
  
  
• 5. Restrictions, Limitations and Conditions of Service Plan
  
  All restrictions, limitations and conditions imposed by the seller of the service plan under the service plan.
  
  
• 6. Insurance Statement
  
  A statement as to whether or not the service plan is insured and, if it is insured, the name and address of the insurer.
  
  
• 7. Make, Model and Model Year
  
  The make, model and model year of the vehicle.
  
  
• 8. VIN
  
  The vehicle identification number of the vehicle.
  
  
• 9. Described Goods and Services Provided under the Service Plan
  
  A list of the goods and services provided under the service plan and a specific description for each item listed.
  
  
• 10. Term of the Service Plan (by dates or kilometers, or both)
  
  The commencement date and end date of the service plan, expressed by way of calendar date, kilometres that the vehicle has been driven or a combination of both.
  
  
• 11. Deductible
  
  The amount of the deductible, if any, for goods and services provided under the service plan.
  
  
• 12. Sale Price, Including Fees and Costs
  
  The sale price of the service plan including an itemized list of all fees or costs that must be paid at the time of purchase and during the term of the service plan.
  
  
• 13. Customer's Obligations
  
  The obligations, if any, of the beneficiary of the service plan.
  
  
• 14. Service Locations
  
  The locations at which the vehicle can be serviced under the service plan.
  
  
• 15. Whether Transferable, and if so, Fee
  
  Whether or not the service plan is transferable to another owner or lessee of the vehicle and the amount of any fee for that transfer.

Contracts shall be signed by the parties (dealer or salesperson, as applicable) [though if a salesperson, they shall sign next to where the name and MVDA number are listed (see clause 4 of the service plan disclosure, above)] - and the customer shall receive a copy of the contract immediately after signing it [Reg 48(3)].

(c) Disclosure Content and Formalities for Indirect ('Facilitated') Sales

The MVDA deems the act of a dealer forwarding a customer-completed service plan application to the principal as one bringing it within these facilitation rules: ie. "deemed to facilitate the sale of the plan" [Reg 48(5)].

Where a dealer indirectly facilitates the sale of a service plan to a customer, the dealer must ensure that the contract for the plan includes, in a clear, comprehensible and prominent manner, the following [Reg 48(4)]:

• the disclosure content set out in (b) above [other than items 3 and 4];
  
  
• the name and address of the seller of the plan;
  
  
• a registered name and the registration number of the dealer who facilitated the sale of the contract, together with the legal name of that dealer if it is different from the registered name; and
  
  
• the registered name and registration number of the salesperson, if any, who is acting on behalf of the dealer who facilitated the sale of the contract.

If a dealer facilitates the sale of a service plan to a customer, the dealer shall [Reg 48(6)]:

• use best efforts to ensure that the contract is signed by the parties and the customer shall receive a copy of the contract immediately after signing it [Reg 48(3)(a-c)];
  
  
• ensure that the dealer and salesperson (if any) signs next to the disclosure indications on the contract for their "registered name and the registration number"; and
  
  
• within seven days after the parties enter into the contract, provide the seller of the plan with:

  . all documents detailing the contract that the dealer has in its possession, and
  
  . all payments that the dealer has received from the purchaser./blockquote>

9. Brokers

(a) Overview

'Brokers' are a category of MVDA dealers who act as agents for a non-registrant to facilitate the customer indirectly buying or selling a motor vehicle. They have "no property interest in the trade", nor do they "take or handle the funds used to pay for the trade". Broker activities include advertising their services [Reg 20(1)].

'Brokers' cannot not be registered in any other motor vehicle dealer categories, and they may not be 'associated' with any other registrant [Reg 20(2)] [see s.1(c), above re 'associated persons'].

Brokers must only serve the interests of their customers, and so a broker may not [Reg 20(3)]:

• represent the interests of any person other than the customer;
  
  
• receive compensation from a person who is not a party to the trade; or
  
  
• receive compensation from more than one party to the trade.

Neither shall a broker "sell extended warranties or service plans or facilitate their sale through the broker" [Reg 20(4)], or "take possession of the motor vehicle" [Reg 20(5)].

(b) Customer Disclosure

Broker contracts with customers (who are not themselves an MVDA dealer) to facilitate a trade in a motor vehicle shall disclose the following, "in a clear, comprehensible and prominent manner" [Reg 49(1)]:

• 1. Name and Address of Customer
  
  The name and address of the customer.
  
  
• 2. Name/s and MVDA Number of Broker
  
  A registered name and the registration number of the broker, together with the legal name of the broker if it is different from the registered name.
  
  
• 3. Business Phone and other Contact Information
  
  The business telephone number of the broker and the other ways, if any, that the customer can contact the broker.
  
  
• 4. Customer Specifications, If Any
  
  Anything the customer has specified with respect to the vehicle or an explicit statement that the customer has not specified anything with respect to the vehicle if that is the case.
  
  
• 5. Prospective Trade-In Details
  
  If the customer is prepared to trade in a motor vehicle in connection with the trade, a description of the motor vehicle to be traded in and the minimum amount for the trade-in that is acceptable to the customer.
  
  
• 6. Itemized Broker Charges
  
  An itemized list of the charges, if any, that the customer will be required to pay the broker, including any taxes on those charges.
  
  
• 7. Total Broker Charges, with Taxes and Method of Payment
  
  The total charges, if any, payable by the customer to the broker, including taxes, and the terms and method of payment.
  
  
• 8. Third-Party Compensation to Broker
  
  If the broker will receive compensation from any person other than the customer, a statement of that fact and the name of the person from whom the broker will receive compensation.
  
  
• 9. Duration and Early Termination of Contract
  
  The duration of the contract and any terms relating to the early termination of the contract.
  
  
• 10. Date of Contract
  
  The date the contract is entered into.
  
  
• 11. Mandatory Caution
  
  This statement in 12 point bold font [Reg 49(2)]:

  Any payment for the purchase or lease of a motor vehicle should be made directly to the seller or lessor, as the case may be. A broker is prohibited from taking or handling funds that are used to pay for the purchase or lease.
  
  A broker is not authorized to make promises on behalf of any person.

• 12. OMVIC Statement
  
  A statement in 12 point bold font [Reg 49(3)] of OMVIC's name, contact information "including its website address and telephone number, including any toll free number the authority has", and it's trademark.

(c) Other Details

"(A)ll restrictions, limitations and conditions imposed on the customer" under any contract must be included, "in a clear, comprehensible and prominent manner" by the broker [Reg 49(4)].

Contracts shall be:

• signed by the parties (dealer or salesperson, as applicable);
  
  
• initialled by the customer beside the disclosure item regarding third-party compensation [see "(b) Customer Disclosure, para 8", above];
  
  
• if either statement required [see "(b) Customer Disclosure, paras 11 and 12", above] are not on the first page of the contract, the statement/s must be initialled by the customer; and
  
  
• the customer shall receive a copy of the contract immediately after signing it [Reg 49(5)].

10. Vehicle History

In addition to the disclosure required for new sales, used sales, leases and trade-ins [s.2-5, above], additional disclosure as follows is required regarding the history of the specific motor vehicle [Reg 42]. Note that the different disclosure requirements may vary as to whether the transaction is for new sales, used sale and/or leases, and if so this will be stated in the below para heading:

• 1. If Sale or Lease of New and Specific Motor Vehicle, Maximum Odometer Reading
  
  If the motor vehicle is new and the contract for the sale or the lease of it identifies a specific motor vehicle, the maximum distance that will be shown on the odometer when it is delivered to the purchaser or the lessee.
  
  
• 2. If Sale or Lease of New but Unspecified Motor Vehicle, Maximum Odometer Reading or Waiver Statement
  
  If the motor vehicle is new and the contract for the sale or the lease of it does not identify a specific motor vehicle:

  . the maximum distance that will be shown on the odometer when it is delivered to the purchaser or the lessee, or
  
  . a statement initialled by the purchaser or the lessee, that nothing is specified in the contract in respect of the maximum distance that will be shown on the odometer when it is delivered.

• 3. If Used, Total Distance if Known by Dealer
  
  If the motor vehicle is a used, the total distance that it has been driven if the dealer can determine the distance.
  
  
• 4. If Used, and Partial Distance Unknown to Dealer
  
  If the motor vehicle is a used and the dealer cannot determine the total distance that it has been driven, but can determine the distance that it has been driven as of some past date, a statement of that distance and date, together with a statement that the total distance that the vehicle has been driven is believed to be higher than that distance.
  
  
• 5. If Used, that Total Distance is Unknown to Dealer and Caution
  
  If the motor vehicle is a used motor vehicle and the dealer can determine neither the total distance that the vehicle has been driven, nor the distance that the vehicle has been driven as of some past date, a statement that the total distance that the vehicle has been driven is unknown and may be substantially higher than the reading shown on the odometer.
  
  
• 6. Odometer Concern Stated
  
  If the motor vehicle’s odometer is broken or faulty, has been replaced, has been rolled back or is in miles, a statement to that effect.
  
  "If the odometer of a motor vehicle in the possession or control of a registrant is exchanged or repaired, the registrant shall ensure that the person doing the exchange or repair, as the case may be, holds all qualifications required by law for doing so" [Reg 33].
  
  
• 7. Past Heavy Use History
  
  If any of the following is true of the motor vehicle, a statement to the effect that the vehicle was previously:

  . leased on a daily basis, unless the vehicle was subsequently owned by a person who was not registered as a motor vehicle dealer under the Motor Vehicle Dealers Act or the Motor Vehicle Dealers Act, 2002,
  
  . used as a police cruiser or used to provide emergency services, or
  
  . used as a taxi or limousine.

• 8. Fire Damage
  
  If the motor vehicle has sustained any damage caused by fire, a statement to that effect.
  
  
• 9. Liquid Damage
  
  If the motor vehicle has sustained any damage caused by immersion in liquid that has penetrated to the level of at least the interior floorboards, a statement to that effect.
  
  
• 10. Structural Damage or Repairs
  
  If there has been structural damage to the motor vehicle or any repairs, replacements or alterations to the structure of the vehicle, a statement to that effect.
  
  
• 11. Anti-Locking System Inoperative
  
  If the motor vehicle is equipped with an anti-lock braking system that is not operational, a statement to that effect.
  
  
• 12. Airbags Inoperative
  
  If any of the motor vehicle’s airbags are missing or are not operational, a statement to that effect.
  
  
• 13. Repairs Required
  
  If the motor vehicle requires repair in any of the following, a statement to that effect:

  i. the engine, transmission or power train,
  
  ii. the subframe or suspension,
  
  iii. computer equipment,
  
  iv. the electrical system,
  
  v. the fuel operating system, or
  
  vi. the air conditioning.

• 14. Material Variance in Production Specifications
  
  If the motor vehicle is materially different from the original or advertised production specifications, a statement to that effect.
  
  
• 15. Panels
  
  If the motor vehicle has two or more adjacent panels that are not bumper panels and that have been replaced, a statement to that effect.
  
  
• 16. Trim Level
  
  The trim level of the motor vehicle.
  
  
• 17. Make, Model and Year
  
  The make, model and model year of the motor vehicle.
  
  
• 18. Badge Variance
  
  If any badge or other indication on the motor vehicle relates to a different model than the model of the vehicle, a statement to that effect.
  
  
• 19. Cost of Repair if Over $3,000
  
  If the total costs of repairs to fix the damage caused to the motor vehicle by an incident exceed $3,000, a statement to that effect and if the registered motor vehicle dealer knew the total costs, a statement of the total costs.
  
  
• 20. Manufacturer's Warranty Cancellation
  
  If the manufacturer’s warranty on the motor vehicle was cancelled, a statement to that effect.
  
  
• 21. Insurance Total Loss
  
  If the motor vehicle was declared by an insurer to be a total loss, regardless of whether the vehicle was classified as irreparable or as salvage [under HTA s.199.1], a statement to that effect.
  
  
• 22. Extra-Ontario Permit Equivalent
  
  If the motor vehicle "previously received treatment" in a jurisdiction other than Ontario that was equivalent to having had a permit issued [under HTA 7] or having been traded in Ontario, a statement to that effect and a statement of which jurisdictions, except if one or more permits have been issued for the vehicle under section 7 of that Act to cover at least the seven previous consecutive years.
  
  
• 23. Irreparable, Salvage or Rebuilt Classification
  
  If the motor vehicle has been classified [under HTA s.199.1], as irreparable, salvage or rebuilt, a statement as to how it was last classified.
  
  
• 24. Recovered After Stolen
  
  If the motor vehicle had been recovered after being reported stolen, a statement to that effect.
  
  
• 25. Other Factors Likely to Influence Purchase or Lease on Given Terms
  
  Any other fact about the motor vehicle that, if disclosed, could reasonably be expected to influence the decision of a reasonable purchaser or lessee to buy or lease the vehicle on the terms of the purchase or lease.

11. Statutory Cancellation Remedy for Mis-disclosure of History

(a) Grounds of Cancellation

The customer has a limited statutory right to cancel a purchase or lease contract regarding a motor vehicle, if the dealer has mis-disclosed (non-disclosure or misrepresentation) any of the following aspects of the history of the vehicle in the contract (see s.10 "Specific Vehicle History") [Reg 42, 50(1)(a-d)]:

• if used, total distance if known by dealer [Reg 42(3), 50(1)(a)],
  
  
• past heavy use history [Reg 42(7), 50(1)(a)],
  
  
• make, model and model year [Reg 42(17), 50(1)(a)],
  
  
• irreparable, salvage or rebuilt HTA classification [Reg 42(23), 50(1)(a)],
  
  
• they falsely say they "cannot determine the total distance that the vehicle has been driven" [under Reg 42(3)], and instead they say that they "can determine the distance that the vehicle has been driven as of some past date" and substitute "a statement of that distance and date, together with a statement that the total distance that the vehicle has been driven is believed to be higher than that distance" [Reg 42(4), 50(1)(b), 50(4)],
  
  
• the statement immediately above [under 42(4)] is inaccurate [50(1)(c)], or
  
  
• they falsely say they "cannot determine the total distance that the vehicle has been driven" [under Reg 42(3)], or that they cannot "determine the distance that the vehicle has been driven as of some past date" and state instead "a statement that the total distance that the vehicle has been driven is unknown and may be substantially higher than the reading shown on the odometer." [Reg 42(3-5), 50(1)(d), 50(4)].

Any such mis-disclosures allow the purchaser or lessee to cancel the contract, even if (1) the dealer did not know the information they were required to disclose or (2) they "honestly believed it to be accurate, regardless of the steps taken by the dealer to ascertain or verify the information" [Reg 50(2)].

If a lessee subsequently buys the leased motor vehicle from the dealer "during or after the end of the term of the lease", then that transaction is exempt from these cancellation rights [Reg 50(3)].

(b) Time Limit for Claiming Cancellation

Probably the most restrictive condition with respec to the cancellation right is that the customer only has 90 days "after actually receiving the motor vehicle" to exert their cancellation right [Reg 50(5)].

(c) Notice of Cancellation

To cancel a contract, the customer must give a notice of cancellation to the dealer in accordance with the following [Reg 50(6)]:

• the notice must be in writing;
  
  
• the notice may be expressed in any way, as long as it indicates the intention of the person to cancel the contract;
  
  
• the notice may be given by delivering the notice to the address of the dealer set out in the contract by [MVDA 37(1)]:

  . personal delivery;
  
  . registered mail; or
  
  . "another manner if the sender can prove receipt of the notice, order or request".

• "(i)f the person did not receive a copy of the contract or the address of the dealer was not set out in the contract, the notice may be given" by any of the immediately above methods to,

  . an address of the dealer on record with the Government of Ontario or the Government of Canada,
  
  . an address of the dealer known by the person giving the notice, or
  
  . an address of the dealer on file with OMVIC.

"If a notice of cancellation is given other than by personal service, the notice shall be deemed to be given when sent" [Reg 50(7)].

(d) Post-Cancellation Meeting for Return and Refund

. Reasonable Efforts for Meeting

Once the customer has served a notice of cancellation [in (c) above] on the dealer, the dealer shall - within 20 days - "make reasonable efforts" to reach an agreement with the customer as to a time and place to meet to return the motor vehicle, and to refund the payments (below) [Reg 50(8)]. This meeting shall be held within 30 days of the notice being given [Reg 50(9)].

. Return of Motor Vehicle

If this meeting is successfully arranged, then the customer shall return the motor vehicle to the dealer "at the agreed time and place or at a subsequent time that is no later than 15 days after the originally agreed time". If this meeting is not successfully arranged (or is arranged 20 days after the notice was served) then the customer shall return the motor vehicle to the dealer "at a time that is on or after 21 days after giving the notice and no later than 30 days after giving the notice".

The dealer shall be deemed to consent to the return of the motor vehicle [Reg 50(12)] as above. The customer who has given notice of cancellation shall "take reasonable care of the motor vehicle from the time of receiving the vehicle until returning it" to the dealer [Reg 50(13)].

. Refund

In either case the dealer shall immediately refund to the customer any payments made under the sales or lease contract, or for any contract for an extended warranty or a service plan (whether directly or indirectly sold) [Reg 50(10-11)].

(e) Legal Effect of Cancellation

When a customer gives a notice of cancellation [compliant with (c)], and returns the motor vehicle [compliant with (d)] - whether a meeting is successfully arranged or not - then all of the following contracts are cancelled "as if they never existed" (void ab initio) as of the date of compliance [Reg 50(14)]:

• (i) the main lease or sale contract (the "contract"),
  
  
• (ii) any contract for an extended warranty or a service plan, regardless of whether the dealer sold or 'facilitated' it to the customer;
  
  
• (iii) all guarantees given in respect of money payable under the contract, and
  
  
• (iv) any of the following obligations if the dealer arranged or facilitated them and they relate to the purchase or lease of the vehicle: security interests, credit agreements and other payment instruments, including promissory notes.

The money obligations of the customer under (iii) ['guarantees'] and (iv) ['obligations'] shall from the date of compliance be transferred to the dealer.

If the sale or lease contract involved a trade-in motor vehicle, the dealer is not required to return it, but refund "the amount paid for that vehicle or the credit, as applicable, for that vehicle." [Reg 50(15)].

(f) Notice to Financer

On cancellation of the contract, the dealer shall promptly provide notice of the cancellation to any party providing financing for the contract under an agreement between the dealer and the financer (the 'dealer financing agreement') [Reg 50(14.1)]. However, nothing in these cancellation provisions [under Reg 50] "affects the rights and obligations of parties to" the dealer financing agreement (ie. between the dealer and financer, not the customer) [Reg 50(14.2)].

(g) Civil Action

If a customer cancels a contract in accordance with these provisions [ie. Reg s.50], and the dealer does not refund the amounts required [under (d)], "the person may commence an action against the dealer in a court of competent jurisdiction" [Reg 50(16)].

In such an action, "oral evidence respecting the trade or the cancellation of the contract is admissible" despite the parol evidence rule (the parol evidence rule normally prohibits the introduction of oral testimony to vary the terms of a written contract) [Reg 50(17)].