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Direct agreements & door-to-door sales

Region: Ontario Answer Number: 807

Under the Ontario Consumer Protection Act, purchasers of products or services, bought through a direct agreement, are given certain rights to cancel the agreement. Under the Act, direct agreements are those which are negotiated and entered into in person, at a place other than the supplier’s place of business, such as at the purchaser’s home (also known as door-to-door sales agreements). The agreement can be for such products or services as water heaters, lawn care, snow removal and home renovations, or any product or service purchased at home from a door-to-door salesperson.

Right to cancel within 10 days – cooling-off period

You can generally cancel a direct agreement without any reason, by giving notice of cancellation to the seller within 10 days of receiving a copy of the signed contract. Also known as a “cooling-off” period, this 10-day cancellation period is only available if the item purchased was worth over $50, there is a written agreement or contract, and you either did not pay for the item in full, or did not receive all the goods and services when you signed.

The notice to cancel must be provided in writing by email, registered letter or by hand delivering it. Be sure to keep a copy of your letter. The company has 15 days to return your money and is responsible for picking up the product or paying for its return if they want it back.

Right to cancel because of missing information

If the 10-day cancellation period has expired, you still may be able to cancel the agreement within one year of signing it, if you did not receive a copy of the agreement, or it does not contain the necessary information. In addition to the name and address of the buyer and seller, the agreement must clearly describe the item or services purchased, a detailed description of the payment terms and any guarantees, delivery dates, delivery charges and the date on which services are to be performed and completed. If it doesn’t, you can cancel the agreement, and the company must provide a full refund.

The company may be exempt from having to refund the full amount of the agreement price if the buyer requested the services to be performed within the 10-day period.  In this case, the supplier is entitled to deduct reasonable compensation from the refund amount. The exception was intended to give some protection to the supplier of emergency services, such as emergency home repairs.

Right to cancel because of unfair business practices

You may also be able to cancel the agreement, in writing, within one year from the date you signed it, if an “unfair practice” led you to purchase the product or service. Under the law, an unfair practice can include a number of behaviours including, a seller making false or misleading statements, such as stating that something you own requires servicing or replacing if it does not, saying goods are new when they are not, or stating that the product or service is better than it really is.

Unfair practices can also include situations where a seller takes advantage of a buyer’s reading problems, language difficulties, or mental or physical disabilities. This also includes excessive sales pressure and charging an excessively high price.

In addition, with direct agreement purchases, the final price cannot be more than 10% above the estimate, unless you agree.  Also, there is a minimum warranty about the quality of services. If they are not reasonably acceptable, you can file a complaint with the Ministry of Government and Consumer Services.

Unsolicited door-to-door sales banned for certain household goods and services

Effective March 1, 2018 amendments to the Consumer Protection Act came into effect regarding new rules for goods and services sold door-to-door.

Under the new rules, a business can only enter into a contract in a consumer’s home if the consumer has contacted the business ahead of time and invited them into their home for the purpose of entering into an agreement to buy or lease certain products or services.

The rules apply to the following:

  • furnaces
  • air conditioners
  • air cleaners
  • air purifiers
  • water heaters
  • water treatment devices
  • water purifiers
  • water filters
  • water softeners
  • duct cleaning services
  • bundles of these goods and services that

If you sign a contract made through a door-to-door salesman after March 1, 2018 for one of these products or services, the agreement is legally void and you will be able to keep the product or service without any obligation to pay for it:

Other rules include:

  • You can invite businesses to your home and any contract signed this way is valid and is subject to the 10-day cooling off period.
  • If you call for a repair, maintenance, an energy assessment, or any reason other than entering a contract for one of the restricted items, the business can only leave information about the products and services they offer; they cannot enter into a new contract with you at this time.
  • If you already have a written contract in place with a business, they can contact you by phone, schedule a visit to your home for any reason you request, including repairs and maintenance, and enter into a new contract. However, the business must tell you at this time if they plan to offer you one of the restricted products and services before they visit your home and you must agree to hear their offer before they can do so.
  • A contact with a retail business must include a cover page on promotional material that details consumer rights.
  • Retail businesses must keep records regarding new contracts for up-to three years.
  • Penalties for violating the law include: a fine of up-to $50,000 or imprisonment for up-to two years, less a day, or both, for individuals; a fine of up-to $250,000 for corporations.

For more information regarding these new rules, view the Act.


Before signing an agreement

Before signing an agreement, make sure you take the time to read it completely from beginning to end, including any sections on the back. If the seller doesn’t want to give you ample time to review the agreement before signing it, this may be an indication that the agreement states something different from what the seller is telling you. Don’t ever be pressured into signing an agreement you don’t fully understand. If it is an important agreement, or one that is for a large sum of money, you should consider having a lawyer review it before you sign.

The Ministry of Government and Consumer Services and other public organizations have created several consumer programs, such as Consumer Protection Ontario, that provide valuable information to consumers, promote and enforce public safety laws, investigate alleged violations and handle complaints. For more information on these programs, and to learn more about direct agreements and other consumer rights, visit Consumer Protection Ontario.

If you are having financial difficulties and want free help to clear your debt and repair your credit, contact Credit Canada Debt Solutions.  Credit Canada is a non-profit agency providing free services to millions of Canadians for over 50 years.


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