Cancelling a Direct Sale Contract in Manitoba: Your Ten Day Cooling Off Right

What counts as a direct sale in Manitoba

Part VII of The Consumer Protection Act applies to a retail sale or retail hire purchase entered into away from the vendor’s usual place of business, resulting from an offer, solicitation, proposal, or approach by or on behalf of the vendor, without any prior request from you, or in response to a request from you that the vendor itself solicited.

In plain terms, the seller came to you. The Consumer Protection Office explains that a direct seller may knock on your door, telephone to arrange an appointment, send an unsolicited offer in the mail, or encourage you to sign at a home show display. Covered places include a dwelling, a trade fair, a shopping mall, a parking lot, a display room, an office, a hotel or motel, and any other temporary establishment. Common products include home alarms, vacuum cleaners, and furnaces, plus renovations such as roofing, decks, or driveway paving. A sale can still count even if the paperwork is finally signed at the vendor’s store, if the vendor or its seller communicated with you personally somewhere else beforehand. Leaving unaddressed marketing materials at your home, without trying to contact you, does not count as an approach.

One boundary matters: the rules target vendor initiated selling. If you sought the vendor out entirely on your own initiative, the direct sale part may not apply, and the Consumer Protection Office can confirm which rules govern your contract.

A special ban: furnaces, water treatment, and similar household systems

Manitoba goes further for a defined group called household systems and supplies: furnaces; air conditioners, air cleaners, purifiers, and ventilation units; water heaters, water treatment devices, purifiers, filters, and softeners; windows; and goods combining those functions.

A vendor or direct seller is prohibited from offering or approaching a buyer at all to make a direct sale of these products, so a salesperson pitching a furnace at your door is breaking the Act by making the pitch. Where such an agreement is made away from the seller’s usual place of business, it must be in writing with a director approved disclosure statement as its first page, a hire purchase agreement must not have an indefinite term, and the cancellation rights in this article apply even if the agreement breaks those writing rules.

Sellers must be licensed, and your contract has required content

The Consumer Protection Office licenses direct selling vendors and their representatives. Ask to see the licence, and write down the salesperson’s name and company.

A written agreement must show the seller name exactly as on the licence, use clear language, be signed by both sides, and meet any other ministerial requirements. The seller must hand you a duplicate copy when you enter into it. An oral agreement still requires a written statement of your cancellation rights at that time.

The ten day right to cancel, for any reason

You may cancel a covered sale within ten days following the day you receive a conforming statement of cancellation rights. As the Consumer Protection Office puts it, you have ten days after signing, not counting the day you sign, to gather facts, get other estimates, or simply change your mind. No reason is required.

Delivery, use, partial consumption, accidental damage, and partial performance of a service do not take the right away. It is lost only in narrow cases, such as deliberate damage to the goods by you or a household member, or where everything has been fully consumed and performed.

When you have a full year to cancel

The Act extends the cancellation window to one year after you entered into the agreement where:

• the vendor or direct seller was not licensed as required when the agreement was made
• the vendor or direct seller breached a term, condition, or restriction on their licence in connection with the agreement
• the statement of cancellation rights, or your written agreement, does not meet the minister’s requirements
• the vendor fails to deliver the goods, or to begin the services, within thirty days after the delivery or start date in the agreement or another date agreed in writing

One caution: if you accept delivery or the services after that thirty day period, you give up the right to cancel on the late delivery ground, although a court may grant relief where that result would be inequitable.

How to cancel, step by step

1. Act inside the deadline. Count the ten days from the day after you received your statement of cancellation rights.
2. Put it in writing. A notice is good enough if, however worded, it clearly shows your intention to cancel. Keep it simple: your name, the date, and the contract.
3. Use a method that proves the date. Notice may go by registered mail, fax, personal delivery, or any method that gives evidence of the date, to the address for notice in your agreement or cancellation statement. A notice sent other than by personal delivery counts as given when sent, not when it arrives.
4. Keep your proof. Retain the notice, your mailing receipt, and your contract. The Consumer Protection Office suggests telephoning it to confirm you are cancelling correctly.

What the seller must do after you cancel

When you cancel, your obligations under the agreement are extinguished, subject to one adjustment below. Within fifteen days, the vendor must refund all money you paid under the agreement, toward the price, rent, the cost of credit, or anything else, whoever you paid it to. Goods you traded in must be returned in as good a condition as when taken, or the vendor must pay the greater of their market value when traded and the value the agreement placed on them. Once you have received everything owed, you return the purchased goods. Cancelling the sale also cancels any separate credit agreement the vendor arranged for the purchase.

The adjustment: if you used or partly consumed the goods, accidentally damaged them, or the vendor partly performed a service, the vendor may claim reasonable compensation, but only after first repaying and returning everything you are entitled to, and never on a faster schedule than the original agreement allowed.

Sales the direct sale rules do not cover

The Act lists sales the direct sale part does not cover, including vehicles and trailers, farm machinery covered by its own Act, water, propane, and fuel products, certain local sales of lumber, coal, feed, and fertilizer, farm produce a farmer sells from their own farm, livestock, crop, and domestic services such as gardening, charitable contribution sales, perishable food on its own, and newspapers delivered on schedule. The Act protects consumer transactions, not business to business or private sales.

Protect yourself before you sign

• Get two or three detailed written estimates. An estimate does not require your signature.
• Take time to think, away from the salesperson.
• Be careful with deposits. A ten per cent down payment is reasonable, and you should never prepay in full. Pay for work as it is done.
• For renovations, The Builders’ Liens Act lets you hold back 7.5 per cent of the cost of a contract over $300 for forty days after the work is substantially or totally performed, in case an unpaid supplier or worker files a lien.
• If you feel rushed, ask the seller to leave the information, or to leave your home.

If the seller will not honour a cancellation

Contact the Consumer Protection Office, which investigates complaints about unlicensed direct sellers, high pressure sales, and cancellation rights. Direct sale vendors must post bonds, and where a company fails or refuses to honour its obligations, consumers can claim against those bonds through the office. It is at Suite 302, 258 Portage Avenue, Winnipeg, Manitoba, R3C 0B6, telephone 204 945 3800 or 1 800 782 0067 toll free in Manitoba, email consumers@gov.mb.ca.

A note on this guide

This article is general legal information about Manitoba rules as published by the Manitoba government and set out in The Consumer Protection Act. It is not legal advice, and it cannot decide whether a contract is covered or a cancellation was effective. If a deadline is close or a seller disputes your cancellation, contact the Consumer Protection Office promptly or consider a lawyer.