OMVIC Contracts and Consumer Rights Flashcards

A consumer signs a purchase agreement on a Friday evening for a used vehicle and pays a $2,000 deposit. The dealer calls Saturday morning to say the vehicle was sold to someone else the night before the paperwork was finalized. Under OMVIC regulations, what is the dealer's obligation?

Answer: Return the full deposit; any additional compensation is a civil matter outside OMVIC's jurisdiction

Under OMVIC's Code of Ethics and MVDA, the dealer must return the full deposit immediately when they cannot fulfill the contract. However, additional damages (e.g., consequential losses) are a civil matter pursued through the courts — OMVIC does not mandate penalty payments beyond the deposit refund itself.

A dealer's purchase agreement includes a clause stating 'all sales final — no cooling-off period applies.' A consumer later claims they were entitled to cancel. Under the Motor Vehicle Dealers Act, which statement is most accurate?

Answer: The clause is valid because OMVIC does not provide a statutory cooling-off period for motor vehicle purchases

Unlike some consumer contracts (e.g., door-to-door sales under the Consumer Protection Act), OMVIC/MVDA does not provide a statutory cooling-off period for motor vehicle purchases made at a dealership. Once a binding contract is signed, it is generally final unless the dealer misrepresented the vehicle. The 'all sales final' clause accurately reflects the law in this context.

A registered salesperson verbally promises a consumer that winter tires and a remote starter will be included with the vehicle. The written purchase agreement is silent on these items. The salesperson's employer later refuses to honor the promise. Under OMVIC rules, which outcome best reflects the legal position?

Answer: The written agreement governs; the consumer's recourse is a civil claim and a potential OMVIC complaint against the registrant

The parol evidence rule generally means the written contract supersedes prior verbal representations. However, the consumer is not without recourse: they can file a civil claim for misrepresentation, and OMVIC can investigate the salesperson and dealership for a Code of Ethics violation (making false or misleading representations). RECO governs real estate, not motor vehicles — that reference is a distractor.

Under the MVDA disclosure regulations, a dealer selling a former daily rental vehicle must disclose this fact. A dealer discloses 'previous fleet use' on the contract but does not use the specific term 'daily rental.' A consumer later discovers the vehicle was a rental and complains. Which is the most accurate regulatory outcome?

Answer: The dealer has violated OMVIC disclosure requirements because the exact prescribed term must be used

OMVIC's mandatory disclosure regulations require specific prescribed language for certain material facts, including that a vehicle was 'previously used as a daily rental.' Using a vague substitute like 'fleet use' is insufficient because it does not clearly communicate the nature of prior use. Precision in mandatory disclosure language is a key compliance requirement under the MVDA regulations.

A consumer purchases a vehicle under a conditional sale agreement where financing is subject to lender approval. After 12 days, the dealer informs the consumer that financing was denied and demands the vehicle be returned. The consumer has already traded in their old vehicle, which the dealer has since sold. What is the dealer's obligation under OMVIC rules?

Answer: The dealer must return the consumer to their original position, including the trade-in value, since the condition precedent failed

When a condition precedent (financing approval) fails, the contract is voidable and the dealer must restore the consumer to their pre-contract position. This means returning the trade-in vehicle or, if already sold, its agreed-upon value. Retaining trade-in proceeds when financing falls through violates OMVIC's Code of Ethics and constitutes an unfair practice under the Consumer Protection Act. OMVIC actively investigates such complaints.

A dealer charges a consumer a $599 'administration fee' and a $349 'nitrogen tire inflation fee' that are not itemized in the advertised price. The consumer only discovers these charges when reviewing the final bill of sale. Under OMVIC's advertising and contract regulations, what is the correct assessment?

Answer: Both fees violate OMVIC regulations because all-in pricing requires mandatory government fees and taxes only to be excluded from the advertised price

OMVIC's all-in price advertising rules require dealers to include all fees (except HST and licensing fees) in the advertised price. An 'administration fee' or 'nitrogen fee' that inflates the final price beyond what was advertised constitutes a misleading price representation. Dealers cannot add arbitrary dealer-imposed fees on top of an advertised all-in price — those fees must be built into the advertised amount. The '5% rule' does not exist under OMVIC regulations.