The Concept of an Implied Warranty
An implied warranty is a condition that the law reads into a contract automatically, whether or not the parties agreed to it explicitly. Implied warranties exist to protect consumers from defective or misdescribed goods where the parties have unequal knowledge or bargaining power.
In Ontario, the Sale of Goods Act and the Consumer Protection Act, 2002 together create a robust framework of implied warranties that cannot be contracted out of in consumer sales.
The Three Key Implied Warranties
The Sale of Goods Act implies three main conditions into every contract of sale by a business: that the goods are of merchantable quality, that they correspond with their description, and that they are reasonably fit for any particular purpose made known by the buyer. Together these cover the most common complaints consumers have about defective goods.
Merchantable quality means fit for the ordinary purposes for which such goods are used. Correspondence with description covers mislabelled, miscategorized, or misadvertised goods. Fitness for purpose applies where the buyer told the seller about a specific intended use and the seller's judgment was relied on.
Enforcement and the CPA Anti-Waiver Rule
Section 9 of the Consumer Protection Act, 2002 provides that the implied conditions and warranties under the Sale of Goods Act apply in consumer transactions 'notwithstanding any agreement to the contrary.' This prevents a supplier from using fine print in a contract to contract out of the protection. Implied warranties apply alongside any express warranty.
Enforcement is typically through a written demand to the supplier followed, if necessary, by a civil claim in Small Claims Court. The limitation period is two years from discovering the breach under the Limitations Act, 2002.