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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. 1
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 2
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. 3
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 4
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. 5
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 6
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. 7
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 8
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 9
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. 10
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