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Motor Vehicle Dealing (Ontario) Legal Guide
(20 June 2021)

Ch.4 - Types of Contracts and Disclosure

  1. Overview
    (a) The Relationship of MVDA and CPA Disclosure Law
    (b) Remedies
    (c) 'Facilitated' Sales
    (d) Return of Deposit or Trade-In
  2. New Sales
    (a) Definition
    (b) Disclosure Content
    (c) Financing
    (d) Other Requirements
  3. Used Sales
    (a) Disclosure Content
    (b) Financing
    (c) Other Requirements
  4. Leases
    (a) Overview
    (b) Car Rental Agency Exemption
    (c) Disclosure Content
    (d) Other Requirements
  5. Trade-Ins
    (a) Overview
    (b) Disclosure
  6. Consignment Sales
    (a) General
    (b) Disclosure When Consignor is MVDA-Exempt as a Personal or Family Trader
  7. Extended Warranties
    (a) Types of Warranties Defined
    (b) Requirements for the Sale of Extended Warranties
    (c) Extended Warranty Contract Disclosure and Formalities
    (d) Formalities of Contract
    (e) Facilitated Sales of Extended Warranties
  8. Service Plans
    (a) Overview
    (b) Disclosure Content and Formalities for Direct Sales
    (c) Disclosure Content and Formalities for Indirect ('Facilitated') Sales
  9. Brokers
    (a) Overview
    (b) Customer Disclosure
    (c) Other Details
  10. Vehicle History
  11. Statutory Cancellation Remedy for Mis-disclosure of History
    (a) Grounds of Cancellation
    (b) Time Limit for Claiming Cancellation
    (c) Notice of Cancellation
    (d) Post-Cancellation Meeting for Return and Refund
    (e) Legal Effect of Cancellation
    (f) Notice to Financer
    (g) Civil Action



1. Overview

(a) The Relationship of MVDA and CPA Disclosure Law

Following on the main technique of consumer protection laws (Ontario's Consumer Protection Act, 2002) [the "CPA"], the Motor Vehicle Dealers Act, 2002 (the "MVDA") compels dealers to engage in detailed written disclosure of motor vehicle transactions such as sales, leases, trade-ins and financing [although auto financing law is under the CPA: Chattel Leases] [Reg 39(1)].

But in the transfer of the disclosure-technique to the MVDA regime, it is important to distinguish three different type of customers: (1) consumer customers, (2) commercial customers and (3) MVDA dealers.

The CPA [deal with in a separate Isthatlegal Guide: Consumer Protection Law] applies only to 'consumers' - ie. "individual(s) acting for personal, family or household purposes and does not include a person who is acting for business purposes" (ie. "consumers") [CPA 1].

And - while the MVDA provides [at MVDA 30(1)], that the MVDA disclosure duties apply to both "customers and to motor vehicle dealers" (ie. everyone) - in reality the 'dealer'-disclosure rules are set out in the "Code of Ethics" part of the MVDA [Ch.5, s.3: "Vehicle History/Disclosure When Customer is Another Dealer"].

So the balance of this Motor Vehicle Dealing Guide (other than Ch.5), addresses disclosure duties owed to non-dealer 'customers' (ie. consumer customers and commercial customers).

(b) Remedies

Failure to disclose, or failure to disclose in a timely way, can - in some circumstances - entitle the customer to the 'prescribed remedies' [see s.11: "Statutory Cancellation Remedy for Mis-disclosure of History", below], in addition to any other remedies that may be available" [Act s.30(2)]. This 'additional' remedy provision makes available to the customer to common law and contractual remedies, (both for non-disclosure and otherwise) that the law otherwise makes available outside of the MVDA [see Ch.1: "The Full Statutory Context"].

(c) 'Facilitated' Sales

It is a feature of the auto trade that a motor vehicle is not always owned by the dealer who does the 'selling' - for instance this is the case with authorized manufacturer dealers, consignment sales or 'broker'-dealer sales. In such cases the dealer (the one that the customer is dealing with directly) acts essentially as 'agent' for the owner-principal.

As well, many (if not most) of the ancillary contract transactions negotiated (and sometimes even executed) by the dealer or salesperson, such as service plans and extended warranties, are done with the dealer acting fully or partially as agent for the service provider principal. In a partial agency role the dealer may simply have a drawer (or these days a computer file) of standard forms for such transactions, and a regular and rapid established process for approval by the principal. In a fuller agency role the dealer may have standing authority to execute such forms in the name of the principal.

The MVDA and it's Regulations recognizes and anticipates such agency transactions when it uses the terms "through" or "facilitates" in it's text. If this is important to you, watch for this.

(d) Return of Deposit or Trade-In

If a customer gives a dealer a deposit or a motor vehicle as a trade-in before entering into a contract for the purchase or lease of a motor vehicle, then requests the return before entering into the contract, the dealer shall immediately return it even if [Reg 38]:
(a) the dealer is not the dealer who sells or leases the vehicle; or

(b) the customer does not enter into a sale or lease contract.

2. New Sales

(a) Definition

A "new motor vehicle" means [Reg 1]:
(a) a motor vehicle for which no permit has been issued [under HTA 7 "permit requriements"] or by another jurisdiction having an equivalent requirement, or

(b) a motor vehicle that meets the following conditions:
(i) The first HTA permit for the vehicle was issued to a purchaser or lessee who purchased or leased the vehicle, as the case may be, from a MVDA dealer.

(ii) The purchaser or lessee did not take possession of the vehicle and the vehicle remained in the possession of the dealer until a new HTA permit for the vehicle was issued to the dealer within 14 days after the issuance of the first permit,
but does not include a motor vehicle that has been used in a way for which a permit would have been required under section 7 of the Highway Traffic Act;" [Note: this last passage excludes used motor vehicles]
(b) Disclosure Content

Dealers shall ensure that the following new motor vehicle sales details are disclosed to a purchaser customer in writing ("in a clear, comprehensible and prominent manner") [Reg 39(2)]:
  • 1. Name and Address

    The name and address of the purchaser.

  • 2. Dealer's Names and MVDA Number

    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.

  • 3. Business Address Where Contracted

    The business address of the place at which the dealer entered into the contract.

  • 4. Facilitating General Dealer's Names and MVDA Number

    If the contract is facilitated by dealer registered as a general dealer in the subclass of new and used motor vehicles, the registered name and registration number of that dealer, together with the legal name of that dealer if it is different from the registered name.

  • 5. Salesperson's Name and MVDA Number

    If a registered salesperson is acting on behalf of the dealer respecting the sale, the registered name and registration number of the salesperson.

  • 6. Date

    The date of the sale.

  • 7. Date of Delivery

    The date that the vehicle is to be delivered or a manner for determining that date.

  • 8. Colour

    The colour of the vehicle.

  • 9. VIN

    The vehicle identification number of the vehicle, if known.

  • 10. Body Type

    The body type of the vehicle.

  • 11. Suggested Retail Price (Basic)

    The manufacturer’s suggested retail price for the vehicle, excluding the price described in paragraph 12 (immediately below).

  • 12. Suggested Retail Price (Extra Equipment Options)

    An itemized list of the manufacturer’s suggested retail price of all extra equipment and options that, under the contract, will be sold to the purchaser in connection with the vehicle or installed on the vehicle at the time of the sale.

  • 13. Suggested Retail Price (Total)

    The total manufacturer’s suggested retail price for the vehicle, being the total of the price described in paragraphs 11 and 12 (immediately above).

  • 14. Extra Charges (Freight, Inspection etc)

    An itemized list of the charges that the purchaser is required to pay under the contract to conclude the transaction, including charges for freight, charges for inspection before delivery of the vehicle, fees and levies.

  • 15. Inducements and their Retail Value

    An itemized list of items or inducements, including guarantees or extended warranties, service plans or rights under sales policies if the dealer has agreed to provide the items or inducements to the purchaser and there is no extra charge to the purchaser for them beyond the total sale price of the motor vehicle under the contract, and the list shall show a fair and accurate description and the retail value, if any, of each of the items or inducements.

  • 16. Total Sales Price (with 'Extra Charges' from para 14)

    The total sale price under the contract, including the charges described in paragraph 14 (above).

  • 17. Down Payment or Deposit

    The down payment or deposit, if any, paid by the purchaser.

  • 18. Balance Owing

    The balance that the purchaser will be required to pay under the contract.

  • 19. Non-Contractual Charges and Taxes

    An itemized list of all other charges that the purchaser will be required to pay in connection with the vehicle at the time of delivery but that are not required under the contract, such as taxes.

  • 20. Verification of CPA Financing Costs Disclosure, if Applicable

    A statement that the dealer has complied with their CPA financing cost disclosure duty [see Chattel Leases] if that duty applies to the dealer with respect to the contract [Reg 39(1)].

  • 21. Third Party Financing Incentive Disclosure by Dealer/Salesperson, if Applicable (Initialled)

    If the dealer or the salespersons registered to the dealer have received or will receive, from any source other than the dealer, a commission, remuneration or any other incentive for providing the application for financing for the purchase to the purchaser, a statement to that effect that is initialled by the purchaser.

  • 22. History of Specific Vehicle

    A disclosure statement by the dealer of the history of the specific vehicle [see s.10: "Specific Vehicle History", below]. This is a separate, extensive disclosure duty [Reg 42].

  • 23. Trade-In Disclosure

    A disclosure statement [see s.5. Trade-in Disclosure", below] of any traded-in motor vehicle. This is a separate, extensive disclosure duty [Reg 43].

  • 24. Mandatory Caution re Reading the Contract

    On the same page of the contract as the purchaser’s signature and next to it, the following statement in accordance in 12 point bold font, except for the heading which shall be in 14 point bold font [Reg 39(3)]:
    Sales Final
    Please review the entire contract, including all attached statements, before signing. This contract is final and binding once you have signed it unless the motor vehicle dealer has failed to comply with certain legal obligations.
  • 25. Mandatory Caution re Concerns

    This statement in 12 point bold font, except for the heading which shall be in 14 point bold font [Reg 39(4)]:
    Important Information Respecting Motor Vehicle Sales

    In case of any concerns with this sale, you should first contact your motor vehicle dealer. If concerns persist, you may contact the Ontario Motor Vehicle Industry Council as the administrative authority designated for administering the Motor Vehicle Dealers Act, 2002.

    You may be eligible for compensation from the Motor Vehicle Dealers Compensation Fund if you suffer a financial loss from this trade and if your dealer is unable or unwilling to make good on the loss.

    You may have additional rights at law.
    This statement shall also include, contact information for OMVIC including its website address and telephone number, including any toll free number the authority has; and at the end of the statement, the trade mark of the authority [Reg 39(5)].

  • 26. Mandatory CMVAP Notice

    A statement, as the case may be, in 12 point bold font, except for the heading which shall be in 14 point bold font [G Reg 39(6-7)]:

    • If the Canadian Motor Vehicle Arbitration Plan (CMVAP) is available for disputes concerning the motor vehicle:
      Canadian Motor Vehicle Arbitration Plan
      The Canadian Motor Vehicle Arbitration Plan may be available to resolve disputes concerning alleged manufacturer’s defects or implementation of the manufacturer’s new motor vehicle warranty.
    • If the CMVAP is not available for disputes concerning the motor vehicle:
      Canadian Motor Vehicle Arbitration Plan Not Available
      The manufacturer of this vehicle is not a participant in the Canadian Motor Vehicle Arbitration Plan. Therefore, the program under that Plan is not available to resolve disputes concerning alleged manufacturer’s defects or implementation of the manufacturer’s new motor vehicle warranty.
  • 27. Statement of Material Customer Facts

    "A statement by the purchaser of all particular facts, if any, respecting the vehicle that the purchaser considers material to the purchase."

    This is a highly useful, and understated disclosure 'right' that actually allows the customer to state what they want and need in the motor vehicle. It feeds into the Sales of Goods Act [see Ch.1, s.3: "Sale of Goods Act (SGA)"] 'implied condition of fitness' warranty provision that the goods are suitable for the purchaser's specific purpose:
    SGA 15
    Subject to this Act and any statute in that behalf, there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale, except as follows:

    1. Where the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required so as to show that the buyer relies on the seller’s skill or judgment, and the goods are of a description that it is in the course of the seller’s business to supply (whether the seller is the manufacturer or not), there is an implied condition that the goods will be reasonably fit for such purpose, but in the case of a contract for the sale of a specified article under its patent or other trade name there is no implied condition as to its fitness for any particular purpose.
    Those dealers who realize the potential for this provision should be rightly concerned with it's effective use by customers, and all customers should explore it's potential for ensuring their motor vehicle is suited to their needs in the face of salespersons' puffery.
(c) Financing

Prior to entering into the contract to sell a new motor vehicle to a purchaser, and if the dealer is directly providing financing for the purchase or only providing the finance application, the dealer shall ensure that the purchaser has been provided with any 'initial disclosure' financing statement required [under s.79 CPA]: see CPA Guide: "Loan and Credit Regulation", s.3: "Disclosure Duties At Commencement and During Credit Agreement" [Reg 39(1)].

If a dealer enters into a new sales contract with a customer, and provides financing or the application for the financing ('facilitating' financing), the dealer shall use best efforts to ensure that the terms of the credit agreement between the customer and financer do not vary from the information that the financer has provided to the customer [Reg 44].

(d) Other Requirements

The dealer shall ensure that there is a separate contract for each motor vehicle sold [Reg 39(8)].

"All restrictions, limitations and conditions imposed on the purchaser under the contract" must be included "in a clear, comprehensible and prominent manner" [Reg 39(9)]. This is a free-standing duty on the dealer, separate from the 'disclosure content', above.

Contracts shall be signed by the parties (dealer or salesperson, as applicable), and the purchaser shall receive a copy of the contract immediately after signing it [Reg 39(10)].

If a contract is facilitated by a dealer registered as a general dealer in the subclass of new and used motor vehicles, the dealer must comply these disclosure requirements [Reg 39(11)].


3. Used Sales

(a) Disclosure Content

Dealers shall ensure that the following used motor vehicle sales details are disclosed in writing ("in a clear, comprehensible and prominent manner") to any non-dealer (ie. consumer) customers [Reg 40(2) (this provision adopts several of the 'new sales' disclosure requirements, as noted)]:
  • Name and Address (#1 new)

    The name and address of the purchaser.

  • Dealer's Names and MVDA Number (#2 new)

    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.

  • Business Address Where Contracted (#3 new)

    The business address of the place at which the dealer entered into the contract.

  • Salesperson's Name and MVDA Number (#5 new)

    If a registered salesperson is acting on behalf of the dealer respecting the sale, the registered name and registration number of the salesperson.

  • Date (#6 new)

    The date of the sale.

  • Date of Delivery (#7 new)

    The date that the vehicle is to be delivered or a manner for determining that date.

  • Colour (#8 new)

    The colour of the vehicle.

  • VIN (#9 new)

    The vehicle identification number of the vehicle, if known.

  • Body Type (#10 new)

    The body type of the vehicle.

  • Extra Charges (Freight, Inspection etc) (#14 new)

    An itemized list of the charges that the purchaser is required to pay under the contract to conclude the transaction, including charges for freight, charges for inspection before delivery of the vehicle, fees and levies.

  • Inducements and their Retail Value (#15 new)

    An itemized list of items or inducements, including guarantees or extended warranties, service plans or rights under sales policies if the dealer has agreed to provide the items or inducements to the purchaser and there is no extra charge to the purchaser for them beyond the total sale price of the motor vehicle under the contract, and the list shall show a fair and accurate description and the retail value, if any, of each of the items or inducements.

  • Total Sales Price (with 'Extra Charges' under #14 new, above) (#16 new)

    The total sale price under the contract, including the charges described in #14 new, above.

  • Down Payment or Deposit (#17 new)

    The down payment or deposit, if any, paid by the purchaser.

  • Balance Owing (#18 new)

    The balance that the purchaser will be required to pay under the contract.

  • Non-Contractual Charges and Taxes (#19 new)

    An itemized list of all other charges that the purchaser will be required to pay in connection with the vehicle at the time of delivery but that are not required under the contract, such as taxes.

  • Third Party Financing Incentive Disclosure by Dealer/Salesperson, if Applicable (Initialled) (#21 new)

    If the dealer or the salespersons registered to the dealer have received or will receive, from any source other than the dealer, a commission, remuneration or any other incentive for providing the application for financing for the purchase to the purchaser, a statement to that effect that is initialled by the purchaser.

  • History of Specific Vehicle (#22 new)

    A disclosure statement by the dealer of the history of the specific vehicle [see "10. Specific Vehicle History", below]. This is a separate, extensive disclosure duty [Reg 42].

  • Trade-In Disclosure (#23 new)

    A disclosure statement [see s.5: Trade-in Disclosure", below] of any traded-in motor vehicle. This is a separate, extensive disclosure duty [Reg 43].

  • Mandatory Caution re Reading the Contract (#24 new)

    On the same page of the contract as the purchaser’s signature and next to it, the following statement in accordance in 12 point bold font, except for the heading which shall be in 14 point bold font [Reg 39(3)]:
    Sales Final
    Please review the entire contract, including all attached statements, before signing. This contract is final and binding once you have signed it unless the motor vehicle dealer has failed to comply with certain legal obligations.
  • Mandatory Caution re Concerns (#25 new)

    This statement in 12 point bold font, except for the heading which shall be in 14 point bold font [Reg 39(4)]:
    Important Information Respecting Motor Vehicle Sales
    In case of any concerns with this sale, you should first contact your motor vehicle dealer. If concerns persist, you may contact the Ontario Motor Vehicle Industry Council as the administrative authority designated for administering the Motor Vehicle Dealers Act, 2002.

    You may be eligible for compensation from the Motor Vehicle Dealers Compensation Fund if you suffer a financial loss from this trade and if your dealer is unable or unwilling to make good on the loss.

    You may have additional rights at law.
    This statement shall also include, contact information for OMVIC including its website address and telephone number, including any toll free number the authority has; and at the end of the statement, the trade mark of the authority [Reg 39(4)].

  • Mandatory CMVAP Notice (#26 new)

    If the model year of the motor vehicle is the current model year or one of the four preceding model years and the vehicle has been driven for less than 160,000 kilometres [Reg 40(4)], the contract shall include a statement, as the case may be, in 12 point bold font, except for the heading which shall be in 14 point bold font [Reg 39(6-7)]:

    • If the Canadian Motor Vehicle Arbitration Plan (CMVAP) is available for disputes concerning the motor vehicle:
      Canadian Motor Vehicle Arbitration Plan
      The Canadian Motor Vehicle Arbitration Plan may be available to resolve disputes concerning alleged manufacturer’s defects or implementation of the manufacturer’s new motor vehicle warranty.
    • If the CMVAP is not available for disputes concerning the motor vehicle:
      Canadian Motor Vehicle Arbitration Plan Not Available
      The manufacturer of this vehicle is not a participant in the Canadian Motor Vehicle Arbitration Plan. Therefore, the program under that Plan is not available to resolve disputes concerning alleged manufacturer’s defects or implementation of the manufacturer’s new motor vehicle warranty.
  • Statement of Material Customer Facts (#27 new)

    "A statement by the purchaser of all particular facts, if any, respecting the vehicle that the purchaser considers material to the purchase."

    This is a highly useful, and understated disclosure 'right' that actually allows the customer to state what they want and need in the motor vehicle. It feeds into the Sales of Goods Act [see Ch.1, s.3: "Sale of Goods Act (SGA)"] 'implied condition of fitness' warranty provision that the goods are suitable for the purchaser's specific purpose:
    SGA 15
    Subject to this Act and any statute in that behalf, there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale, except as follows:

    1. Where the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required so as to show that the buyer relies on the seller’s skill or judgment, and the goods are of a description that it is in the course of the seller’s business to supply (whether the seller is the manufacturer or not), there is an implied condition that the goods will be reasonably fit for such purpose, but in the case of a contract for the sale of a specified article under its patent or other trade name there is no implied condition as to its fitness for any particular purpose.
    Those dealers who realize the potential for this provision should be rightly concerned with it's effective use by customers, and all customers should explore it's potential for ensuring their motor vehicle is suited to their needs in the face of salespersons' puffery.

  • Name and MVDA Number of Facilitating Dealer

    If a contract is facilitated by a dealer registered as a general dealer, the registered name and registration number of that dealer, together with the legal name of that dealer if it is different from the registered name [Reg 40(2)1.1].

  • CPA Financing Initial Disclosure Statement

    A statement that the dealer has complied with the CPA financing 'initial disclosure statement' [under Reg 40(1), see below], if that subsection applies to the dealer with respect to the contract [Reg 40(2)2].

  • Itemized and Costed List of Repairs

    An itemized list of all repairs, if any, that, under the contract, the dealer has made to the vehicle or will make to the vehicle and the cost of any such repairs that are to be paid by the purchaser [Reg 40(2)3].

  • Mandatory Safety Standards Certificate Notice

    If a current safety standards certificate under the Highway Traffic Act has been issued for the vehicle, that certificate and a statement as follows in 12 point bold font, except for the heading which shall be in 14 point bold font [Reg 40(2)4,5]:
    Safety Standards Certificate
    A safety standards certificate is only an indication that the motor vehicle met certain basic standards of vehicle safety on the date of inspection.
  • Mandatory 'As Is' Statement

    If the dealer is selling the vehicle on an as-is basis, a statement as follows of that in 12 point bold font, except for the heading which shall be in 14 point bold font, where the purchaser initials the statement [G Reg 40(2)5,6]:
    Vehicle sold “as-is”
    The motor vehicle sold under this contract is being sold “as-is” and is not represented as being in road worthy condition, mechanically sound or maintained at any guaranteed level of quality. The vehicle may not be fit for use as a means of transportation and may require substantial repairs at the purchaser’s expense. It may not be possible to register the vehicle to be driven in its current condition.
(b) Financing

Prior to entering into the contract to sell a used motor vehicle to a purchaser, and if the dealer is directly providing financing for the purchase or only providing the finance application, the dealer shall ensure that the purchaser has been provided with any 'initial disclosure' financing statement required [under s.79 CPA]: see CPA Guide: "Loan and Credit Regulation", s.3: "Disclosure Duties At Commencement and During Credit Agreement" [Reg 40(1)].

If a dealer enters into a used sales contract with a customer, and provides financing or the application for the financing ('facilitating' financing), the dealer shall use best efforts to ensure that the terms of the credit agreement between the customer and financer do not vary from the information that the financer has provided to the customer [Reg 44].

(c) Other Requirements

If a current HTA safety standards certificate has been issued for the used motor vehicle, the dealer may not sell it to a non-dealer on an as-is basis [Reg 40(3)].

The dealer shall ensure that there is a separate contract for each motor vehicle sold [Reg 40(7)].

"All restrictions, limitations and conditions imposed on the purchaser under the contract" must be included "in a clear, comprehensible and prominent manner" [Reg 40(8)]. This is a free-standing duty on the dealer, separate from the 'disclosure content' above.

Contracts shall be signed by the parties (dealer or salesperson, as applicable), and the purchaser shall receive a copy of the contract immediately after signing it [Reg 40(9)].

If a contract is facilitated by a dealer registered as a general dealer, the dealer must comply these disclosure requirements [Reg 40(10)].


4. Leases

(a) Overview

In the rare case that a dealer leases motor vehicles from another dealer, these MVDA leases rules do not apply to the contract - but otherwise they do, and for those MVDA-governed leases the distinction between commercial and consumer lessees is key.

The Consumer Protection Act, 2002 ['CPA'] applies to consumers, who are "individual(s) acting for personal, family or household purposes and does not include a person who is acting for business purposes" [CPA 1]. The CPA sets out detailed disclosure and other rules regarding chattel leases, including motor vehicle leases: Chattel Leases [under CPA 89(2), CPA General Reg 74 and generally all of CPA Part VIII].

Consumers are, in addition, also governed by the following MVDA disclosure rules (below). On the other hand, 'commercial' (non-CPA) lessees are statutorily governed only by these MVDA rules. Of course, contract (and often tort law) applies to all lease contracts.

(b) Car Rental Agency Exemption

A person or entity who leases motor vehicles to lessees is exempt from the MVDA if:
  • the person does not own the vehicle,

  • the lessee does not buy the vehicle at the end of the lease term,

  • the lease is for a term of no more than 120 consecutive days,

  • the lessor has filed with the registrar, upon request, a declaration stating that the lessor will not trade in the vehicle after the vehicle is no longer going to be leased, except to lease it as described here, and

  • the lessor does not trade in the vehicle after the vehicle is no longer leased, except to lease it as described here.
(c) Disclosure Content

Again, the following MVDA disclosure duties apply to both commercial and consumer lessees.

Dealers (other than 'fleet lessors') shall ensure that the following lease contract details are disclosed in writing ("in a clear, comprehensible and prominent manner") to any non-dealer lessees when a lease is entered into [Reg 41(1)]:
  • 1. CPA Lease Disclosure

    This first item is really just a repeat of the CPA disclosure duties mentioned in (a), above - with the addition that the dealer must provide "an itemized list of the items included in the lease value of the vehicle, which value is included" in the CPA disclosure [MVDA 41(1)1].

  • 2. Name and Address

    The name and address of the lessee.

  • 3. Dealer's Names and MVDA Number

    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. Business Address Where Contracted

    The business address of the place at which the dealer entered into the contract.

  • 5. Facilitating General Dealer's Names and MVDA Number

    If the contract is 'facilitated' by a general dealer, a registered name and the registration number of that dealer, together with the legal name of that dealer if it is different from the registered name.

  • 6. Salesperson's Name and MVDA Number

    If a registered salesperson is acting on behalf of the dealer respecting the contract, the registered name and registration number of the salesperson.

  • 7. Colour

    The colour of the vehicle.

  • 8. VIN

    The vehicle identification number of the vehicle, if known.

  • 9. Body Type

    The body type of the vehicle.

  • 10. Service Plan, If Any

    If the vehicle is subject to a service plan, a statement to that effect.

  • 11. History of Specific Vehicle

    A disclosure statement by the dealer of the history of the specific vehicle [see "10. Specific Vehicle History", below] [Reg 42]. This is a separate, extensive disclosure duty.

  • 12. Trade-In Disclosure

    A disclosure statement [see "5. Trade-ins"] of any traded-in motor vehicle [Reg 43]. This is a separate, extensive disclosure duty.

  • 13. Mandatory Caution re Concerns

    A statement as below in 12 point bold font, except for the heading which shall be in 14 point bold font [Reg 41(2-3)]:
    Important Information Respecting Motor Vehicles Leases
    In case of any concerns with this lease, you should first contact your motor vehicle dealer. If concerns persist, you may contact the Ontario Motor Vehicle Industry Council as the administrative authority designated for administering the Motor Vehicle Dealers Act, 2002.

    You may be eligible for compensation from the Motor Vehicle Dealers Compensation Fund if you suffer a financial loss from this trade and if your motor vehicle dealer is unable or unwilling to make good on the loss.

    You may have additional rights at law.
    This statement shall also include, contact information for OMVIC including its website address and telephone number, including any toll free number the authority has; and at the end of the statement, the trade mark of the authority [Reg 41(3)].

  • 14. Mandatory CMVAP Notice

    A statement as below, as the case may be, in 12 point bold font, except for the heading which shall be in 14 point bold font [Reg 41(4-5)]:

    • If the Canadian Motor Vehicle Arbitration Plan (CMVAP) is available for disputes concerning the motor vehicle:
      Canadian Motor Vehicle Arbitration Plan
      The Canadian Motor Vehicle Arbitration Plan may be available to resolve disputes concerning alleged manufacturer’s defects or implementation of the manufacturer’s new motor vehicle warranty.
    • If the CMVAP is not available for disputes concerning the motor vehicle:
      Canadian Motor Vehicle Arbitration Plan Not Available

      The manufacturer of this vehicle is not a participant in the Canadian Motor Vehicle Arbitration Plan. Therefore, the program under that Plan is not available to resolve disputes concerning alleged manufacturer’s defects or implementation of the manufacturer’s new motor vehicle warranty.
  • 15. Mandatory Safety Standards Certificate Notice

    If a current safety standards certificate under the Highway Traffic Act is provided for the vehicle, this statement in 12 point bold font, except for the heading which shall be in 14 point bold font [Reg 41(6)]:
    Safety Standards Certificate
    A safety standards certificate is only an indication that the motor vehicle met certain basic standards of vehicle safety on the date of inspection.
  • 16. Statement of Material Lessee Facts

    A statement by the lessee of all particular facts, if any, respecting the vehicle that the lessee considers material to the contract.

    This is a useful, and little noticed disclosure 'right' that actually allows the customer to state what they want and need in the motor vehicle. In the 'new sale' and 'used sale' sections (above), it would feed into the Sales of Goods Act 'implied condition of fitness' warranty provision that the goods are suitable for the purchaser's specific purpose - but since this is a lease (not a sale) situation the SGA does not apply. Regardless, a lease customer setting out their needs and wants in a motor vehicle in this section is well-advised in case those needs and wants become an issue in the later performance of the lease. It may be an ideal 'anti-puffery' option.

    That's of course, if the dealer inquires of the customer's material needs, and/or respects their duties to disclose them - which arguably (given all the ethical foofaraw in the MVDA!), they should do.
(d) Other Requirements

The dealer shall ensure that there is a separate contract for each motor vehicle leased [Reg 41(7)].

"All restrictions, limitations and conditions imposed on the lessee under the contract" must be included "in a clear, comprehensible and prominent manner" [Reg 41(8)]. This is a free-standing duty on the dealer, separate from the 'disclosure content' above.

Lease contracts shall be signed by the parties (dealer or salesperson, as applicable), the lessee shall receive a copy of the contract immediately after signing it, and "if the motor vehicle being leased is a used vehicle, the lessee receives a copy of a current safety standards certificate for the vehicle along with the contract" [Reg 41(9)].

If a contract is 'facilitated' by a dealer registered as a general dealer, the dealer must comply these disclosure requirements [Reg 41(10)].


5. Trade-Ins

(a) Overview

'Trading-in' a prior owned motor vehicle is a common practice, and it is regulated under the MVDA with disclosure rules. Trade-ins are an in-kind (goods, not money) set-off of the value of the customer's motor vehicle 'traded-in', credited against the purchase price or lease rental of a fresh vehicle taken by the customer.

Legally, the main distinction with trade-ins is whether the customer trade-in motor vehicle is: (1) being accepted by a dealer who is also selling or leasing another motor vehicle to the customer ['set-off dealer'] [Reg 43(1-2)], or (2) whether the trade-in is being taken by another, separate dealer ['third party dealer'] [Reg 43(3)]. It is key to know that these disclosure duties (below) lie on the receiving dealer - that is the dealer that takes the traded-in motor vehicle, regardless of whether than dealer sells the customer a fresh vehicle or not.

If more than one motor vehicle is being traded-in, the (below) disclosure duties must be "shown separately for each vehicle" [Reg 43(5)].

(b) Disclosure

MVDA rules require that the customer trading-in their prior motor vehicle receive disclosure relating to the trade-in vehicle "in a clear, comprehensible and prominent manner" [Reg 43(2-3)]. Note that these trade-in disclosure duties are separate from any other MVDA disclosure duties respecting any fresh vehicles the customer may contract for.
  • 1. Name and Address

    The name and address of the owner of the motor vehicle.

  • 2. Name/s and MVDA Number of Third-Party Dealer Taking Trade-in

    In the case of a third-party dealer accepting the trade-in, disclosure includes:
    . a registered name and the registration number of the third-party dealer, together with the legal name of the dealer if it is different from the registered name, and

    . if a registered salesperson is acting on behalf of the third party dealer respecting the trade-in, the registered name and registration number of the salesperson.
  • 3. Date of Trade-In

    The date that the motor vehicle is to be traded in, if known, or a manner of determining the date, if the date is not known.

  • 4. Make, Model, Trim Level and Model Year

    The make, model, trim level and model year of the motor vehicle.

  • 5. Colour

    The colour of the motor vehicle.

  • 6. VIN

    The vehicle identification number of the motor vehicle.

  • 7. Body Type

    The body type of the motor vehicle.

  • 8. Trade-in Credit Value (if trade-in accepted by set-off dealer)

    The credit for the motor vehicle being traded in, if the selling or leasing dealer described in clause (1) (a) receives the motor vehicle being traded in.

  • 9. Trade-in Purchase Value (if trade-in accepted by third-party dealer)

    The amount paid for the motor vehicle being traded in by the dealer, if another dealer receives the vehicle under a separate contract [ie. a 'third-party' dealer, as in (a) above].

  • 10. Specific Vehicle History (from Customer)

    A statement obtained from the customer of the history of the specific vehicle being traded-in [see "10. Specific Vehicle History", above; Reg 42].

  • 11. Odometer Reading

    The motor vehicle’s recorded odometer reading.

  • 12. Repealed

  • 13. Application of Trade-in Credit to Outstanding Loan and Repair

    If the dealer receiving the motor vehicle being traded in agrees under the contract for the trade-in to pay any outstanding loan on the vehicle or any outstanding bill for the repair or storage of the vehicle, a statement to that effect.

6. Consignment Sales

(a) General

A 'consignment' is an arrangement where the motor vehicle's owner (the 'consignor') engages a dealer (the 'consignee') to sell it to third parties (the 'buyer'). A consignment contract is between the consignee (dealer) and the consignor (owner).

The MVDA has consignment rules, which - unlike most different types of contract rules - apply regardless of the status of the consignor (ie. the consignor can be anyone, even another dealer).

The main rule is that the consignment must be arranged through a written contract [Reg 45(1)]. Both the dealer consignee and the consignor must sign the contract [Reg 45(2-3)].

The dealer must also, in a "clear, comprehensible and prominent manner", include in the written contract "all restrictions, limitations, conditions and other obligations imposed on the consignor under the contract" [Reg 45(5)].

For each consignment contract the dealer shall also [Reg 45(6)]:
  • ensure that, if a salesperson is acting on behalf of the dealer, the contract is signed by the salesperson;

  • ensure that the consignor receives a copy of the contract immediately after signing it; and

  • "use their best efforts" to obtain from the consignor a copy of the used vehicle information package [from HTA s.11.1; see Ch.1, s.5(d): "Used Vehicle Information Package (UVIP)"], if required. (it is the consignor's duty to provide this, unless exempt).
On a consignment sale, the dealer shall "shall ensure it is clearly indicated, in a manner in which it is likely to be noticed, that the vehicle is being sold on a consignment basis" [Reg 45(7)]. The dealer shall use "best efforts" to ensure that the consignor and the purchaser promptly receive a copy of the contract [Reg 45(8)].

(b) Disclosure When Consignor is MVDA-Exempt as a Personal or Family Trader

People (not corporations) trading a motor vehicle, "used primarily for the personal use of the individual or a member of his or her family", are exempt from the MVDA registration requirements [MVDA s.5]. When a dealer takes on a consignment (as consignee) with such an exempt person as consignor, the consignment contract must contain the following disclosure details "in a clear, comprehensible and prominent manner" [Reg 45(4)]:
  • the name and address of the consignor;

  • the business name, a registered name and the registration number of the dealer, together with the legal name of the dealer if it is different from the registered name;

  • the make, model, trim level and model year of the vehicle;

  • the colour of the vehicle;

  • the vehicle identification number of the vehicle;

  • the body type of the vehicle;

  • if the vehicle is used, the total distance that it has been driven if the dealer can determine the distance;

  • if the vehicle is 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;

  • if the vehicle is used motor, and the dealer can determine neither the total distance that it has been driven, nor the distance that it 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;

  • the total amount that the dealer will charge the consignor on the sale of the vehicle, whether as a fixed amount or as a commission share of the total amount payable by the purchaser on the sale of the vehicle, and an itemized list of all components of those charges;

  • an estimate of the selling price of the vehicle and a minimum selling price of the vehicle;

  • the term (duration) of the contract and, if applicable, how the parties can extend it or a statement that the parties cannot extend it; and

  • if the contract can be terminated before it is set to expire, the conditions respecting such early termination of the contract, including the fees, if any, payable for early termination.

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