BILL NO. 99

(as amended)

1st Session, 57th General Assembly
Nova Scotia
47-48 Elizabeth II, 1998-99

Government Bill

Direct Sellers' Regulation Act
(amended)

CHAPTER 8 OF THE ACTS OF 1999

The Honourable Robert S. Harrison
Minister of Business and Consumer Services

First Reading: May 19, 1999

Second Reading: May 25, 1999

Third Reading: June 4, 1999 (WITH COMMITTEE AMENDMENTS)

Royal Assent: June 17, 1999

Be it enacted by the Governor and Assembly as follows:

1 Clause 2(d) of Chapter 129 of the Revised Statutes, 1989, the Direct Sellers' Regulation Act, is repealed and the following clause substituted:

(d) "direct selling" means selling or offering for sale or soliciting orders for future delivery of goods or services where the first person-to-person contact is made by the salesperson outside of a retail outlet and includes sales resulting from a solicitation by a non-retailer to attend a place where selling, offering for sale or the solicitation of orders for the future delivery of goods or services occurs and sales conducted by a multi-level marketing wholesaler, a multi-level marketing distributor and the sale of hearing aids regardless of the circumstances of the sale;

2 Section 6 of Chapter 129 is amended by adding "(1)" immediately after the Section number and by adding the following subsection:

(2) This Act does not apply to

(a) a member of a category of persons exempted by the regulations; or

(b) a person who participates in a category of sales exempted by the regulations.

3 Subsection 8(2) of Chapter 129 is repealed.

4 Subsection 9(4) of Chapter 129 is repealed.

5 Section 11 of Chapter 129, as amended by Chapter 8 of the Acts of 1998, is further amended by striking out "an" in the second line and substituting "a civic".

6 Subsection 18(2) of Chapter 129 is repealed and the following subsection substituted:

(2) Where the Registrar is satisfied that the holder of a permit has

(a) violated this Act or the regulations or has failed to comply with any of the terms, conditions or restrictions to which the permit is subject;

(b) made a material mis-statement in the application for the permit or in any other information or material submitted by the holder of the permit to the Registrar;

(c) been guilty of misrepresentation, fraud or dishonesty; or

(d) demonstrated the permit holder's incompetency or untrustworthiness to carry on the business in respect of which the permit was granted,

the Registrar may

(e) enter into an agreement for voluntary compliance with the holder of the permit;

(f) order restitution to consumers;

(g) fine the holder of the permit;

(h) suspend or cancel the permit, with or without conditions;

(i) make an order with respect to costs or expenses related to the proceedings;

(j) require that the bond amount to be posted by the holder of a permit be increased.

7 Sections 20 to 23 of Chapter 129 are repealed and the following Sections substituted:

20 (1) A direct sales contract shall be in writing where required by this Act or the regulations.

(2) A copy of the direct sales contract shall be supplied to the purchaser at the time the contract is made.

(3) A written direct sales contract shall include

(a) a statement of cancellation rights that conforms with the requirements in the regulations; and

(b) the information required by the regulations.

(4) Where a direct sales contract is not required to be in writing, the direct seller shall notify the purchaser of cancellation rights in a form and manner prescribed by the regulations.

(5) Except as provided in the regulations, a direct seller shall not give or offer to give directly or indirectly any gift, premium, prize or other benefit of any kind to a purchaser or prospective purchaser for assistance in furthering the sale to another person of any goods or services if that gift, premium, prize or other benefit is contingent on a sale being made to the other person.

21 (1) A direct sales contract is cancelled if

(a) the purchaser serves a written notice of cancellation on the direct seller within ten days after the day on which the purchaser receives a copy of the direct sales contract or, where a contract is not required, a notice of cancellation rights; or

(b) the purchaser cancels the contract by providing written notice to the direct seller within one year after the day on which the purchaser entered into the contract and

(i) the direct seller was not in compliance with the requirements for a permit contained in this Act or the regulations at the time the purchaser entered into the contract,

(ii) the goods or services to be supplied under the contract are not supplied to the purchaser within thirty days after the supply date specified in the contract,

(iii) where a written contract is required, the contract does not contain the information required pursuant to this Act or the regulations, or

(iv) where a written contract is not required, the notice of cancellation rights does not conform with the requirements of this Act or the regulations.

(2) A notice given pursuant to subsection (1) may be served on the direct seller in any manner that permits the purchaser to produce evidence that the purchaser cancelled the contract, including registered mail or personal delivery to the direct sellers' last known address.

(3) Where a method of sending or delivering the cancellation notice other than personal delivery is used, a notice of cancellation is deemed to be given when sent.

(4) Where a purchaser accepts delivery of goods or supply of services after the thirty-day period referred to in subclause (ii) of clause (b) of subsection (1) has expired, the purchaser is not entitled to cancel the contract pursuant to that subclause.

22 Where, in connection with a direct sales contract, credit is extended or arranged by a direct seller,

(a) the credit contract is conditional on the direct sales contract; and

(b) where the direct sales contract is cancelled pursuant to Section 21, the credit contract is cancelled.

23 (1) Where a direct sales contract is cancelled, the direct seller, within fifteen days of the cancellation, shall

(a) refund to the purchaser all money received under the contract; and

(b) return to the purchaser any trade-in or an amount equal to the value of the trade-in received under the contract.

(2) The value of the trade-in referred to in subsection (1) is the greater of

(a) the market value of the goods when taken in trade; and

(b) the price or value of the goods as set out in the direct sales contract.

(3) In a contract respecting goods, the purchaser, on receiving the refund, shall return the goods to the direct seller.

(4) Where a purchaser cannot return the goods to the direct seller in substantially the same condition as when the purchaser received the goods because of an act or fault for which the purchaser is responsible, the purchaser may not cancel the contract.

(5) A direct seller is entitled to recover reasonable compensation as prescribed in the regulations for goods that cannot be returned or for services already provided.

8 Section 35 of Chapter 129, as amended by Chapter 8 of the Acts of 1998, is further amended by adding immediately after clause (h) the following clauses:

(ha) prescribing categories of direct sellers;

(hb) respecting the types of contracts or the categories of direct sales for which a written contract is required, including setting the minimum value at which a written contract may be required;

(hc) respecting the form and content of identification cards direct sellers are to provide to salespersons and the circumstances in which an identification card is required;

(hd) respecting the content of direct sales contracts or any category of direct sales contracts;

(he) respecting the form and content of a statement of cancellation rights;

(hf) respecting codes of conduct for a direct seller;

(hg) exempting a salesperson or a class of salespersons from the requirement to hold a permit;

(hh) respecting reasonable compensation for the purpose of Section 23;

(hi) defining any word or expression used but not defined in this Act;

(hj) prescribing any other matter or thing that is required or authorized by this Act to be prescribed by regulation;

9 Chapter 129, as amended by Chapter 8 of the Acts of 1998, is further amended by

(a) striking out "salesman" wherever it appears in Chapter 129 and substituting in each case "salesperson"; and

(b) striking out "salesmen" wherever it appears in Chapter 129 and substituting in each case "salespersons".

10 This Act comes into force on such day as the Governor in Council orders and declares by proclamation.