Direct Sellers Act

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CHAPTER D-11

DIRECT SELLERS ACT

1. In this Act Definitions

(a) "direct sale" means a sale by a vendor or salesman in the course direct sale
of his business as such;
(b) "direct sales contract" means an agreement for the direct sale of direct sales contract
goods or services, whether for cash or on credit;
(c) "direct selling" means selling, offering for sale or soliciting of direct selling
orders for the sale of goods or services by
(i) going from house to house,
(ii) telephone communication, or
(iii) mail;
(d) "direct seller" means a person who, whether at the request of the direct seller
householder or not, direct sells;
(e) "goods" includes any articles, commodities, substances or things goods
and any agreement that entitles the holder thereof to purchase or
obtain goods;
(f) "Minister" means the Attorney General; Minister

(g) "purchaser" means a natural person who purchases goods or purchaser
services for personal consumption from a direct seller;
(h) "Registrar" means the Registrar of Direct Sellers; Registrar

(i) "regulations" means regulations made under this Act; regulations

(j) "salesman" means a person engaged in direct selling either on his salesman
own behalf or that of a vendor;
(k) "services" includes any agreement services
(i) to install or supply goods whether or not the goods become
part of any real property,
(ii) to perform work, labour or service of any kind, or
(iii) that entitles the holder thereof to purchase or obtain services;
(l) "vendor" means a vendor under a direct sales contract. R.S.P.E.I. vendor
1974, Cap. D-10, s.2; 1980, c.2, s.3; 1983, c.1, s.6; 1983, c.11, s.1;
1985, c.3, s.1; 1993, c.29, s.4; 1997,c.20,s.3; 1997,c.12,s.1 {eff.}
Apr. 1/98; 2000,c.5,s.3.
Administration of
2. The Minister is charged with the administration of this Act. R.S.P.E.I. Act
1974, Cap. D-10, s.3.

2 Cap. D-11 Direct Sellers Act

3. The Minister may designate a public officer as the Registrar of Direct
Registrar of Direct
Sellers and the Registrar is responsible to the Minister for the
Sellers
administration of this Act. R.S.P.E.I. 1974, Cap. D-10, s.4; 1980, c.2, s.3.
4. Any person who acts as a vendor or a salesman under a direct sales
Persons subject to
Act contract shall be deemed to be carrying on the business of direct selling
and is subject to and shall comply with this Act. R.S.P.E.I. 1974, Cap. D-
10, s.5.
5. (1) A person shall not carry on the business of direct selling in this
License
province unless he is the holder of a subsisting license issued under this
Act.
(2) A person is deemed not to be carrying on the business of direct
Exemptions
selling if he is
(a) a person selling newspapers;
(b) a person selling food or drink for human or animal consumption,
or fuel, if he or his employer resides or has a place of business in the
province;
(c) a person selling motor vehicles or farm supplies and services if
he resides or has a place of business in the province;
(d) a person selling goods or services on behalf of a non-profit
organization or corporation having objects of a character referred to
in Part II of the Companies Act R.S.P.E.I. 1988, Cap. C-14;
(e) a person carrying on a business in respect of which he is licensed
under the Securities Act R.S.P.E.I. 1988, Cap. S-3, the Insurance Act
R.S.P.E.I. 1988, Cap. I-4, the Trade Schools Act R.S.P.E.I. 1988,
Cap. T-4 or the Real Estate Trading Act R.S.P.E.I. 1988, Cap. R-2.
(3) This Act does not apply to a direct sales contract
Idem
(a) solicited, negotiated and concluded without any dealings in
person between the purchaser and the direct seller or between the
purchaser and the vendor or salesman;
(b) where the consideration to be provided by the purchaser is of a
value of $100 or less;
(c) where the direct seller
(i) has not initiated the dealing with the purchaser other than
through advertising to the public, and
(ii) has resided or has had business premises in the province for a
period of one year immediately prior to entering into the contract,
or, if the direct seller is a corporation or partnership that has not
had business premises in the province for the required period, all
its shareholders or partners have resided in the province for a
period of one year immediately prior to the contract; or

Direct Sellers Act Cap. D-11 3

(d) solicited, negotiated and concluded at the direct seller's, vendor's
or salesman's normal business premises. 1983, c.11, s.2; 1997, c.12,
s.2 {eff.} Apr. 1/98.
6. A salesman who is the holder of a license shall be deemed to be Salesman's license,
effect of on vendor
authorized by the vendor specified in the license to act for or on behalf of
that vendor. R.S.P.E.I. 1974, Cap. D-10, s.7.
7. Where a salesman ceases to represent a vendor, that vendor shall, Notice in writing to
Registrar
within ten days after the salesman has ceased to represent him, give
notice in writing thereof to the Registrar and the receipt of such notice by
the Registrar shall operate as a cancellation of the license of the
salesman. R.S.P.E.I. 1974, Cap. D-10, s.8.
8. (1) A vendor shall not transfer the license of a salesman to another License not
transferable
vendor.
(2) Where a salesman whose license is cancelled is appointed by Salesman, where
license is cancelled
another vendor, or is reappointed by the vendor with whom he was
previously licensed, such salesman shall make a new application to the
Registrar for a license. R.S.P.E.I. 1974, Cap. D-10, s.9.
8.1 An application for a license as a vendor or salesman shall be in such Application for
license
form as may be approved by the Minister. 1994, c.48, s.9.
8.2 (1) The Registrar may refuse, cancel or suspend any license when he Licenses
feels such action is in the public interest.
(2) The decision of the Registrar regarding refusal, cancellation or Appeal
suspension may be appealed to the Minister by giving to him notice in
writing within thirty days.
(3) When a license has been suspended or cancelled by or under this Return of
suspended license
Act, the holder of the license shall forthwith return the license to the
Registrar.
(4) Every license shall remain in force for a period not exceeding two Expiration and
renewal
years, shall expire on such date as may be specified therein, and may be
renewed by the Registrar on application therefor. 1994, c.48, s.9.
8.3 (1) The Registrar, before issuing a license, may require a surety bond Surety bond
as follows, issued by a recognized surety company:
(a) in respect of a vendor carrying on business in this province,
$5,000 each;
(b) in respect of a salesman carrying on business in this province,
$1,000 each.

4 Cap. D-11 Direct Sellers Act

(2) In determining whether to require a surety bond under subsection
Factors considered
(1), the Registrar shall assess the following factors:
(a) the amount of consideration under the terms of the direct sales
contract;
(b) the terms of payment and the time for delivery of the goods or
services;
(c) the location of the assets of the vendor or salesman; and
(d) the past conduct of the vendor or salesman. 1994, c.48, s.9.
8.4 Any bond delivered under this Act shall be forfeited upon the
Forfeiture of bond
demand of the Registrar where
(a) the person in respect of whose conduct the bond is conditioned
or any representative, agent or salesman of that person has been
convicted of
(i) an offence under this Act,
(ii) an offence involving fraud, theft or conspiracy to commit an
offence involving fraud, theft or conspiracy under the Criminal
Code (Canada) R.S.C. 1985, Chap. C-46;
(b) judgment in respect of a claim arising out of a direct sales
contract has been given against the person in respect of whose
conduct the bond is conditioned or against any representative, agent
or salesman of that person;
(c) the person in respect of whose conduct the bond is conditioned
commits an act of bankruptcy, whether or not proceedings have been
taken under the Bankruptcy and Insolvency Act (Canada) R.S.C.
1985, Chap. B-3; or
(d) a decision has been rendered by the Registrar in writing stating
in effect that after consideration and investigation of a complaint, he
is satisfied that the person in respect of whose conduct the bond is
conditioned or any representative, agent or salesman or that person
(i) has violated any provision of this Act or has failed to comply
with any of the terms, conditions or restrictions to which his
license is subject or is in breach of contract, and
(ii) has departed from the province or been out of the province,
remains out of the province or departs from his normal place of
abode or otherwise absents himself or, in the case of a
corporation, the name thereof has been struck off the register of
companies,
and such conviction or judgment, order or decision has become final by
reason of lapse of time or having been confirmed by the highest court to
which any appeal may be taken. 1994, c.48, s.9.
Continuation of
8.5 In respect of every act and omission occurring during the term of a
bond
license, every bond shall continue in force for a period of two years after

Direct Sellers Act Cap. D-11 5

the license or renewal thereof to which it relates, expires or is cancelled.
1994, c.48, s.9.
8.6 The Minister may, upon such terms and conditions as he may Assignment
determine, assign any bond forfeited under this Act or may pay over any
moneys recovered under any such bond to
(a) any person who may become, in respect of a claim arising out of
a direct sale, a judgment creditor of the person so bonded;
(b) the Registrar of the Supreme Court in trust for a person referred
to in clause (a); or
(c) any trustee, custodian, interim receiver, receiver or liquidator of a
person referred to in clause (a). 1994, c.48, s.9.
8.7 (1) Whenever Her Majesty becomes a creditor of any person under Proceeds of bond
this Act, the debt may be recovered by action or other proceeding in any
court of competent jurisdiction as a debt due Her Majesty. 1994, c.48,
s.9.
(2) When a bond has been forfeited under this Act by reason of a Idem
conviction or judgment referred to in clause 8.4(a) or (b) and two years
have elapsed since
(a) such conviction or judgment; or
(b) the vendor or salesman in respect of whom the bond was
furnished ceased to carry on business,
and the Minister has not received notice in writing of any claim against
the proceeds of the bond or of such portion thereof as remains in the
possession of the Minister, the Minister may pay to any person who,
upon forfeiture of the bond made any payments thereunder, such
proceeds or portion thereof, less the amount of any expenses which have
been incurred in connection with any investigation or otherwise relating
to such vendor or salesman. 1994, c.48, s.9.
8.8 (1) The Registrar, or person appointed by him, if he has reasonable Inquiries and
investigations
and probable grounds to believe that
(a) there has been a violation or contravention of this Act or the
regulations by a vendor or salesman;
(b) the vendor or salesman may have committed an offence under
the Criminal Code (Canada) in connection with a transaction
relating to direct selling; or
(c) it is in the public interest,
may conduct an inquiry or investigation into the operation of the
business by inspecting all the vendor's books and records and by
obtaining any additional information he may require from whatever
sources in order to complete the inquiry or investigation.

6 Cap. D-11 Direct Sellers Act

(2) The person conducting the investigation or inquiry shall have any
Powers
or all of the powers that are and may be conferred upon a commissioner
under the Public Inquiries Act R.S.P.E.I. 1988, Cap. P-31 including the
power to take evidence under oath. 1994, c.48, s.9.
9. A direct sales contract to which this Act applies shall be in writing and
Form of contract
shall
(a) be signed by the vendor or a salesman of the vendor and by the
purchaser;
(b) be in such format and shall contain such information as may be
required by the regulations;
(c) include a statement of cancellation rights in accordance with the
regulations; and
(d) meet such other requirements as may be specified in the
regulations. 1997,c.12,s.3 {eff.} Apr. 1/98.
10. A person direct selling to a purchaser shall provide to the purchaser
Copy to purchaser
a copy of the direct sales contract in accordance with section 9 and the
regulations at the time the contract is made. 1997,c.12,s.3 {eff.} Apr.
1/98.
10.1 (1) A purchaser may cancel a direct sales contract at any time within
Absolute right to
cancel ten days after the purchaser is provided with a copy of the direct sales
contract under section 10.
(2) A purchaser may cancel a direct sales contract within one year after
Cancellation within
one year in certain entering into the contract where
circumstances
(a) the vendor or the salesman of the vendor was not licensed under
this Act at the time the purchaser entered into the direct sales
contract;
(b) the vendor or the salesman of the vendor has in respect of the
direct sales contract failed to comply with any terms, conditions or
restrictions to which his license is subject;
(c) the vendor or the salesman of the vendor does not provide to the
purchaser a direct sales contract and statement of cancellation rights
that are in accordance with section 9 and the regulations; or
(d) the vendor or the salesman of the vendor fails to
(i) deliver the goods within thirty days after
(A) the delivery date specified in the direct sales contract or
such amended delivery date as may be specified in a
subsequent written agreement, or
(B) if the delivery date is not specified in the direct sales
contract or a subsequent written agreement, the date the direct
sales contract is made, or
(ii) begin to provide the services within thirty days after

Direct Sellers Act Cap. D-11 7

(A) the commencement date specified in the direct sales
contract or such amended commencement date as may be
specified in a subsequent written agreement, or
(B) if the commencement date is not specified in the direct
sales contract or a subsequent written agreement, the date the
direct sales contract is made.
(3) A purchaser who accepts delivery of goods or the provision of Acceptance of
goods after 30 days
services under a direct sales contract after the thirty-day period referred
to in clause (2)(d) is not entitled to cancel the direct sales contract under
that clause.
(4) Where in the opinion of a court it is inequitable that clause (2)(d) Court discretion re
delivery
should apply, the court may make such order as it considers appropriate.
(5) The cancellation rights under this section in respect of a direct sales Effect on other
legal rights
contract are in addition to and do not affect any other rights or remedy
the purchaser has under or in respect of the direct sales contract or at law
in the province in which the purchaser resides.
(6) Where credit is extended or arranged by a vendor or a salesman of Ancillary credit
agreements
the vendor in connection with a direct sales contract and the credit
agreement is conditional on the direct sales contract, a cancellation of the
direct sales contract under this section has the effect of cancelling the
credit agreement. 1997,c.12,s.3 {eff.} Apr. 1/98.
10.2 (1) A direct sales contract is cancelled under section 10.1 when the Notice of
cancellation
purchaser gives a notice of cancellation in accordance with this section.
(2) A purchaser may give a notice of cancellation to the direct seller, Methods of giving
notice
vendor or a salesman of the vendor by
(a) delivering it personally to the direct seller, vendor or salesman of
the vendor; or
(b) sending it to the direct seller, vendor or salesman of the vendor
by registered mail, prepaid courier, telephone transmission
producing a facsimile or any other method that permits the purchaser
to provide evidence of the cancellation.
(3) A notice of cancellation shall be deemed to be given to the direct Delivery of notice
seller, vendor or a salesman of the vendor if it is delivered or sent to the
address for notice specified for that purpose in the direct sales contract.
When notice
(4) A notice of cancellation that is given in accordance with clause effective
(2)(b) shall be deemed to be given when it is sent.

8 Cap. D-11 Direct Sellers Act

(5) Subject to subsections (2), (3) and (4), a notice of cancellation is
Indication of
adequate if it indicates the intention of the purchaser to cancel the direct
intention
sales contract. 1997,c.12,s.3 {eff.} Apr. 1/98.
10.3 (1) Where a direct sales contract is cancelled under section 10.1
Responsibilities
upon cancellation (a) the direct seller or vendor shall, within fifteen days after the
notice of cancellation has been delivered or sent,
(i) refund the money received under the direct sales contract to
the purchaser, and
(ii) if goods were taken by the direct seller or vendor as a trade-in,
return them to the purchaser in as good a condition as they were
when they were taken in trade, or if the direct seller or vendor is
not able to do that, pay to the purchaser the greater of
(A) the market value of the goods at the time they were taken
in trade, and
(B) the price or value of the goods specified in the direct sales
contract; and
(b) in the case of a direct sales contract respecting goods, on
receiving everything to be refunded, returned or paid to the
purchaser under clause (a), the purchaser shall deliver up the goods
to the direct seller or vendor in as good a condition as they were
when they were delivered.
(2) Where a direct sales contract is cancelled under section 10.1, the
Compensation
direct seller or vendor is entitled to reasonable compensation for the
portion of the goods consumed by the purchaser and for the services
partially performed by the direct seller or vendor but the direct seller's or
vendor's rights do not arise under this subsection until he complies with
subsection (1). 1997,c.12,s.3 {eff.} Apr. 1/98.
11. An action shall not be brought by a vendor against a purchaser for
Limitation of action
the endorsement of a direct sales contract unless the vendor and salesman
were licensed under this Act at the time that the purchaser entered into
the contract, or if the contract does not comply with the requirements of
the Consumer Protection Act R.S.P.E.I. 1988, Cap. C-19. R.S.P.E.I.
1974, Cap. D-10, s.12.
12. A person licensed under this Act shall produce his license for
Inspection of
license inspection when requested to do so by any person whom he is soliciting
or has solicited. R.S.P.E.I. 1974, Cap. D-10, s.13.
13. A certificate under the hand of the Registrar stating that on a
Certificate of
Registrar, effect of specified day
(a) a vendor, salesman or any other person named in the certificate
was or was not licensed under this Act;
(b) a license was issued to a vendor or salesman; or

Direct Sellers Act Cap. D-11 9

(c) the license of a vendor or salesman was suspended, cancelled or
reinstated,
shall be prima facie evidence of the facts stated in the certificate.
R.S.P.E.I. 1974, Cap. D-10, s.14.
14. Every agreement or barg ain, verbal or written, expressed or implied, Agreement limiting
operation of Act,
that any of the provisions of this Act or the regulations shall not apply is effect of
null, void, and of no effect, and money paid under or by reason of any
such agreement or bargain is recoverable in any court of competent
jurisdiction. R.S.P.E.I. 1974, Cap. D-10, s.15.
15. The Lieutenant Governor in Council may make such regulations, not Regulations
inconsistent with this Act, as he considers necessary or advisable for the
more effective carrying out of the purposes and provisions of this Act
according to its true spirit, intent and meaning and for dealing with any
matters for which no express provision has been made, or in respect of
which only partial or imperfect provision has been made, and, without
prejudice to the generality of the foregoing, may make regulations
(a) prescribing terms, conditions and restrictions to which licenses
and renewals of licenses are to be subject;
(b) prescribing the fees payable upon application for a license and
the renewal of a license and any other fees in connection with this
Act and the regulations;
(c) prescribing the forms which shall be used under this Act and the
regulations;
(c.1) respecting direct sales contracts including the format and
content of direct sales contracts, the information to be included in
direct sales contracts, the statement of cancellation rights to be
included in direct sales contracts and any other requirements in
relation to direct sales contracts and statements of cancellation
rights;
(d) providing for the holding of inquiries into the operation of this
Act and into any charge or complaint that any person has
contravened any provision of this Act or the regulations;
(e) prescribing the returns and statements to be made by licensees;
(f) providing for the examination of applicants for licenses and
renewals of licenses;
(g) providing for the regulation of direct sales;
(h) prescribing what books, accounts and records are to be kept and
maintained by vendors and salesmen;
(i) providing for the bonding of vendors and salesmen and the
disposal of money recovered under any bond;
(j) providing for appeals of decisions of the Registrar to the
Minister; and

10 Cap. D-11 Direct Sellers Act

(k) respecting any matter, whether of the foregoing kind or not,
necessary or advisable to carry out effectively the intent and purpose
of this Act. R.S.P.E.I. 1974, Cap. D-10, s.16; 1997,c.12,s.4 {eff.}
Apr. 1/98.
16. Every person who fails to comply with or otherwise contravenes any
Offences, penalties
of the provisions of this Act or the regulations, or makes a false
statement in any application, form, return, account, record, statement or
other document completed or made under this Act or the regulations is
guilty of an offence and liable on summary conviction to a fine of not
more than $1,000 for a first offence and not more than $2,000 for each
subsequent offence, and, for a first offence in addition to such fine, to
imprisonment for a period not exceeding six months, and for a second or
subsequent offence, in addition to such fine, to imprisonment for a period
not exceeding twelve months. R.S.P.E.I. 1974, Cap. D-10, s.17; 1994,
c.58, s.6.
17. Where, in a prosecution under this Act, it is alleged that the accused
Evidence required
in prosecution carried on the business of direct selling without being the holder of a
subsisting license under this Act, evidence of one transaction is prima
facie evidence that the accused carried on such business. R.S.P.E.I. 1974,
Cap. D-10, s.18.
18. Every prosecution under this Act or the regulations shall be
Limitation of action
commenced within two years from the date on which the offence is
alleged to have been committed. R.S.P.E.I. 1974, Cap. D-10, s.19.
19. Whenever any other Act of the province is in conflict with this Act,
Act to prevail
this Act will prevail. R.S.P.E.I. 1974, Cap. D-10, s.20.

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