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Entering into a Contract for Purchase

When you agree to purchase goods or services you are entering into a contract with the seller. The law protects consumers against certain unfair practices that a business may use to entice you into entering into a contract to buy goods or services.

In many cases contracts for goods or services are made verbally or even just implied from the situation. When you order a meal in a restaurant you do not call the owner over and agree to pay the price listed on the menu in exchange for the meal you order. But by placing your order you are agreeing to pay for your selection. When you take a ticket from a machine to enter a parking lot you are agreeing to pay the price for parking, even though you have not spoken to anyone.

The law does require some contracts to be in writing. If a contract is for more than $50, the performance of it will not be completed within one year, or it involves land it must be in writing.

However, written contracts may not look how you expect a contract to look. Something as simple as a bill of sale can be a written contract. Even when it is not legally required it can be a good idea to 'get it in writing' as this can reduce the potential for disagreements about what exactly was agreed to.

Unfair Practices

Know your rights when purchasing goods or services. Unfair practices can be reported to the Financial and Consumer Affairs Authority. Consumers who suffer a loss due to an unfair practice can sue the seller and, if they are successful, may be awarded damages.

In Saskatchewan consumers are protected against unfair practices* by businesses trying to get you to enter into a contract for goods or services. Unfair practices include:

  • leading a consumer to believe that a repair, part or service is needed when it is not
  • falsely representing that a salesperson has the authority to negotiate the final terms of the sale
  • using exaggeration, innuendo or ambiguity when describing the goods or services
  • deceiving or misleading a consumer by not telling them something about the goods or services
  • taking advantage of a consumer by exerting undue pressure or undue influence on the consumer to enter into a transaction involving goods or services

* these protections do not apply to private sales

Price Tags

Double Ticketing

Although stores are not generally bound by the price tag on an item, if there are two prices on the same item the store is required to sell it at the lower price. This is a consumer protection designed to prevent stores from misleading people about the price of an item. It only applies when the two prices can both be seen clearly, not when one tag is over another or one price is struck out.

When an item is advertised, promoted in a catalogue or displayed with a price tag the law considers this to simply be an invitation for you to make an offer to purchase the item at that price. Sellers are not obligated to accept your offer and may not if, for example, the item was incorrectly priced. Similarly, you are not obliged to go through with the purchase if you get to the till and find out the item costs more than you thought it would. In this case there is no agreement as to the price of the item and no agreement to purchase it.

Estimates

An estimate is not usually a binding contract to have the work done. The reason people get estimates is to be able to shop around for the best price. You can often get free estimates but it is always a good idea to check and see if there is a charge for an estimate. In some cases a fee may be charged for the estimate if you choose not to hire the company for the work.

Consumer protection laws prevent people from charging substantially more for the work than was estimated. However, it is important to read the estimate carefully. Some estimates may only be good for a period of time.

Sometimes what starts out as an estimate can become a binding contract to have the work done for the stated price. An estimate will usually be signed by the person giving you the estimate. If you sign it as well, depending on the wording of the document, you may have entered into a binding contract. Before you do this make sure this is the company you want to do the work and check to see how the final cost will be calculated. Sometimes, for example, if the actual cost is less than estimated you pay only the actual cost, in other agreements you pay the full amount of the estimate regardless of the actual cost.

Deposits or Down Payments

Paying a deposit on goods can be part of a binding contract. If you choose to cancel the deal, whether or not you get your deposit back usually depends on how the contract was worded. Sometimes, part of the contract is that in certain circumstances you can cancel without losing your deposit. If the ability to cancel the deal without a loss of the deposit is your understanding, you should have it confirmed in writing.

Unfortunately, what happens to the deposit if you cancel often is not discussed at the time of the sale. If there has been no prior arrangement, and you break the contract, the store or business can keep the deposit. You can always try to negotiate a refund, but may be left to rely on the seller's good graces. To minimize your risk, do not put a large deposit or down payment on anything you want to buy until you are absolutely sure you will complete the purchase, and that the company will not be here today, gone tomorrow.

If a company sends you something that you did not ask for you are not required to go to the trouble and expense of returning the item. Saskatchewan law provides that you have no legal obligation to the sender unless you state in writing that you accept the goods. Goods are not considered 'unsolicited' if they come to you by mistake and you know or should have known that they were intended for someone else.

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