Selling now for future goods or services? Contract rules for businesses
If you are a business that is selling goods or services that your customers don’t get right away or don’t pay in full upfront, your contracts may qualify as a future performance contract. Examples are home renovations, travel services, and event rentals or venues.
There are laws in BC that you must follow when it comes to future performance contracts, especially when it comes to the information that needs to be in your contract and your customer’s cancellation rights. Not following the rules can result in financial penalties and/or enforcement actions and have reputational impacts on your business.
The law in BC
If your business uses this type of contract, BC’s laws:
require that your contract be in writing (this can include email)
require that you give a copy to your customer within 15 days (including by email)
require that your contract include specific information
give your customers cancellation rights in certain circumstances, including if your contract doesn’t have all the required contents
A future performance contract is NOT a:
contract under $50
time share contract
prepaid purchase card
contract for the supply of goods or services under a credit agreement, if the goods or services have been supplied.
The information on this page is not a full list of your business obligations. Please read BC’s consumer protection laws in full.
It’s important to understand that there may be other laws that apply to your contracts, including ones we don’t oversee. We recommend that you do your research and have a lawyer review your contracts.
BC’s Business Practices and Consumer Protection Act has a list of content that your future performance contract must include. Not having this content gives your customer the right to cancel their contract with you for up to one year from the date the consumer receives a copy of the contract.
Protect your business by following the law.
Required contents
As the supplier, here are a few of the things that your future performance contract must include:
your name, and if different, the name under which you do business
your business address, and if different, your business mailing address
your business phone number, and if available, fax number
the date the contract is entered into
a detailed description of the goods or services to be supplied under the contract
an itemized purchase price for the goods and services to be supplied under the contract
other costs payable by the customer, including taxes and shipping charges
if you can’t reasonably determine any customs duties, brokerage fees, or additional charges that may apply, you must include a description of those charges
a detailed statement of the terms of payment
the total price under the contract, including the total cost of credit
the supply date
the date on which the supply of goods or services will be complete
if there are periodic payments under the contract, the amount of each of the periodic payments
if applicable, a description and dollar value of any trade-in
a notice of the customer’s rights of cancellation, if any
This is not a full list. You have more requirements and obligations. We recommend that you read BC’s consumer protection laws in full.
Cemetery and funeral services preneed contracts are future performance contracts but some of these contract elements are not requirements. Read the Business Practices and Consumer Protection Act,section 23.
It’s important to understand that there may be other laws that apply to your contracts, including ones that we don’t oversee. Do your research and have a lawyer review your contracts.
For required contract content, read the Business Practices and Consumer Protection Act, section 19 and section 23.
A future performance contract is not legally binding, if:
you give or offer to give a rebate, discount, or some other value to them if they give you the names of prospective customers (which helps you make a sale to another person)
and
the earning of a rebate, discount, or value is contingent on an event happening after the customer agrees to buy
This is not a full list of your requirements and obligations. We recommend that you read BC’s consumer protection laws in full.
It’s important to understand that there may be other laws that we don’t oversee that apply to your contracts. Do your research and have a lawyer review your contracts.
Read the Business Practices and Consumer Protection Act,section 23.
By law, your customer can cancel their future performance contract with you if it doesn’t have all the required contents by giving you a notice of cancellation up to one year after the date they got a copy of the contract.
Your customers can give you a notice of cancellation in any way that allows them to produce proof that they cancelled the contract on a specific date, including:
delivering a written notice in person
delivering the written notice by registered mail, email, or fax, sent to the appropriate contact person at the contact information shown in the contract
A notice of cancellation is good enough if it shows in any way that the customer intends to cancel the future performance contract and it states the reason for cancellation is a non-compliant contract.
There’s more to know. We recommend that you read BC’s consumer protection laws in full.
It’s important to understand that there may be other laws that we don’t oversee that apply to your contracts. Do your research and have a lawyer review your contracts.
Read about cancellations notices in the Business Practices and Consumer Protection Act,section 23(5) and section 54.
If a customer exercises their cancellation rights, they may be entitled to a full refund within 15 days.
If part of the work is completed under the contract, and the customer exercises their cancellation right and you can’t resolve the issue between the two of you, this becomes a contractual dispute and would go to the Civil Resolution Tribunal or Court to resolve the issue.
If a customer exercises their cancellation rights, they must return any goods back to the person named in the contract.
There’s more to know. We recommend that you read BC’s consumer protection laws in full.
It’s important to understand that there may be other laws that we don’t oversee that apply to your contracts. Do your research and have a lawyer review your contracts.
Understand what refund deductions may apply in the Business Practices and Consumer Protection Act,section 27. Learn more about the return of goods in the Business Practices and Consumer Protection Act, section 28.
We are a provincial regulatory authority, responsible for overseeing BC’s consumer protection laws. The laws we oversee include the Business Practices and Consumer Protection Act and the Consumer Contracts regulation. These laws outline the rules for the types of contracts your business uses if selling goods or services that your customers don’t get right away or don’t pay in full upfront.
By law, we have the authority to inspect your business practices and your contracts. Our approach is to help you voluntarily comply with the law – our goal is not to punish, but rather to correct marketplace behaviour. Should we not get voluntary compliance, we have several enforcement tools at our disposal, including the ability to order to you comply with the law and to issue administrative monetary penalties.
Your contracts are regulated by BC’s consumer protection laws, so we have the authority to inspect your business.
Our goal with our inspections is to identify and help you correct the use of non-compliant future performance contracts. While we are interested in working collaboratively with you to identify problems with your future performance contracts, as a business owner, you are responsible for making sure that your contracts meet the law.
During an inspection, you will be required to produce copies of your future performance contracts and other business records. If we find issues with your contracts, we will identify the problem areas and require you to correct them. There are significant penalties for not complying with an inspection, including monetary penalties as high as $50,000.
This information is an overview of your obligations under BC’s consumer protection laws. Please read the consumer contracts regulation and the Business Practices and Consumer Protection Act in full to understand all your obligations and your customers’ cancellation rights.
We also recommend that you do your research to find out what other laws may apply to your contracts and have a lawyer review them.
Your customers can file a complaint with our office if they believe that you have breached the law.
