OMVIC Dealer Operations and Business Practices Flashcards

A registered OMVIC dealer receives a written offer to purchase from a consumer, along with a deposit cheque. The dealer counters with a higher price and the consumer rejects the counteroffer. Under OMVIC regulations, what must the dealer do with the deposit?

Answer: Return the deposit immediately upon rejection of the counteroffer

When a counteroffer is rejected and no contract is formed, the deposit must be returned immediately. No contract was created because there was no meeting of the minds — the original offer was effectively rejected by the counter, and the consumer then rejected the counter. The dealer has no legal or regulatory basis to hold the deposit.

A dealership's OMVIC registration is suspended during a dispute investigation. Which of the following activities may the dealer STILL lawfully continue during the suspension period?

Answer: Completing deliveries on contracts that were fully executed and paid prior to the suspension

A suspension prohibits a registrant from trading in motor vehicles, which includes buying, selling, leasing, and negotiating. However, fulfilling obligations under contracts that were fully formed and paid before the suspension commenced is generally permissible, as these are completions of prior legal obligations rather than new trades.

Under the Motor Vehicle Dealers Act, 2002, a dealer sells a vehicle 'as-is' to a consumer and includes a written 'as-is' acknowledgment signed by the buyer. Two weeks later, the consumer discovers the odometer was rolled back. Which statement is most accurate?

Answer: The dealer is liable for odometer fraud regardless of the 'as-is' clause, as it constitutes an unfair practice

An 'as-is' clause cannot contract out of statutory protections under the Motor Vehicle Dealers Act, 2002 or the Consumer Protection Act, 2002. Odometer misrepresentation is classified as an unfair practice — a form of fraudulent misrepresentation — and no signed waiver can immunize a dealer against such a claim. The 'as-is' designation covers unknown latent defects, not deliberate misrepresentation of material facts.

A dealer registered in Ontario wishes to hold an off-site sales event at a local fairground for three days. Which of the following correctly describes the dealer's obligations under OMVIC requirements?

Answer: The dealer must notify OMVIC and obtain approval for a temporary off-premise sales location before the event

OMVIC regulations require dealers to obtain prior approval for off-premise sales events. The temporary location must be approved, and the dealer must comply with specific conditions, including displaying registration information. Simply having a valid lot registration does not automatically extend trading authority to unregistered locations.

A dealership employs a salesperson who is not yet registered with OMVIC but has submitted a complete registration application. A customer on the lot asks this individual to negotiate a trade-in value. Under the MVDA, 2002, what is the correct course of action?

Answer: The unregistered applicant must refrain from all trading activities until registration is granted

Under the MVDA, 2002, trading in motor vehicles — which includes negotiating — requires registration. There is no grace period or provisional trading authority for applicants awaiting registration, regardless of supervision or countersignature arrangements. The applicant must not engage in any trading activity until registration is officially granted.

A dealer's salesperson, acting without the dealer principal's knowledge, promises a customer a $2,000 accessories package as an inducement to sign. The dealer principal discovers this only after the contract is signed and refuses to honour the promise. Under OMVIC's framework, which outcome is most legally accurate?

Answer: The dealer may be bound by the salesperson's representation under apparent authority principles, and OMVIC may hold the dealer responsible for the unfair practice

Under agency law and the Consumer Protection Act, 2002, a dealer can be held vicariously liable for the representations made by their registered employees acting in the scope of employment. A salesperson negotiating on a dealer's lot is acting with apparent authority. OMVIC can hold the dealer responsible for the unfair practice even if the dealer principal was unaware, and the consumer may have recourse through the MVDA Compensation Fund or civil remedies.