Bill 76, Farm Implements Amendment Act, 2001

Versions

Bill 76 2001

An Act to ensure fairness,
to foster competition
and consumer choice
and to encourage innovation
in the farm implement sector

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

1. (1) The definition of "dealer" in section 1 of the Farm Implements Act is repealed and the following substituted:

"dealer" means a person who, in the ordinary course of business, offers farm implements or parts for sale at retail; ("vendeur")

(2) Section 1 of the Act, as amended by the Statutes of Ontario, 1999, chapter 12, Schedule A, section 11, is further amended by adding the following definition:

"dealership agreement" means an agreement that is made between a distributor and a dealer with respect to the business of the dealer's offering farm implements or parts for sale at retail and that fixes the legal rights and obligations of the parties to the agreement; ("contrat de distribution")

2. Subsection 3 (4) of the Act is repealed and the following substituted:

Dealership agreement

(4) A dealership agreement shall be in writing, shall contain the information that is prescribed and shall contain the legal rights and obligations that are prescribed for the parties to the agreement.

3. Subsection 5 (1) of the Act, as re-enacted by the Statutes of Ontario, 1999, chapter 12, Schedule A, section 11, is amended by striking out "dealer or distributor" and substituting "dealer, distributor or manufacturer".

4. Subsection 18 (7) of the Act is repealed and the following substituted:

Repair

(7) The distributor shall have the defective farm implements repaired at the distributor's expense or shall reimburse the dealer for the cost of repairing the defective farm implements.

Reimbursement

(8) If the distributor reimburses the dealer for the cost of repairing the defective farm implements, the distributor shall do so in accordance with the terms to which the parties agree.

Cost of repair

(9) If the parties do not agree on terms for the reimbursement of the cost of repair, the cost shall include,

(a) if necessary for doing the repair, the cost of transporting the implements within the dealer's market area as assigned in the dealership agreement;

(b) the cost of travel incurred by the dealer in having the repair done;

(d) the cost of parts used in the repair.

Reimbursement by manufacturer

(10) If the distributor of a new farm implement or a new repair part is not the manufacturer of it, the manufacturer shall reimburse the distributor for the costs that the distributor incurs to honour the warranties under sections 12 (power), 13 (quality), 15 (parts supply) and 16 (quality of parts), for the cost of repairing defects under subsection (4) and for the cost of notifying purchasers of defects under subsection (6).

5. Section 22 of the Act, as amended by the Statutes of Ontario, 1999, chapter 12, Schedule A, section 11, is further amended by adding the following subsection:

Reimbursement by manufacturer

(11) If the distributor of a defective farm implement is not the manufacturer of it, the manufacturer shall reimburse the distributor for the costs that the distributor incurs to comply with the requirements that this section imposes on the distributor.

6. (1) The definition of "agreement" in subsection 23 (1) of the Act is repealed.

(2) The definition of "current net price" in subsection 23 (1) of the Act is amended by striking out "the agreement" and substituting "the dealership agreement".

(3) The definition of "new part" in subsection 23 (1) of the Act is repealed and the following substituted:

"new part" means a part or parts assembly that,

(a) has not been used and has not been removed from a complete farm implement, and

(b) the dealer has purchased from the distributor within the previous 10-year period; ("pièce neuve")

(4) Subsection 23 (2) of the Act, as re-enacted by the Statutes of Ontario, 1999, chapter 12, Schedule A, section 11, is amended by striking out "an agreement" and substituting "a dealership agreement".

(5) Subsection 23 (3) of the Act is repealed and the following substituted:

No contracting out

(3) Subject to subsection (4), sections 24 to 30 apply to a dealership agreement despite any agreement or waiver to the contrary.

7. Subsection 24 (1) of the Act is amended by striking out "after an agreement" and substituting "after a dealership agreement".

8. Subsection 25 (1) of the Act is repealed and the following substituted:

Repurchase price

(1) The distributor shall pay a repurchase amount to the dealer equal to,

(a) 100 per cent of the invoice price for each new farm implement;

(b) 85 per cent of the current net price for each new part;

(c) 50 per cent of the latest published price for all mandatory special tools and equipment that the dealer has purchased within the previous five-year period and that are unique for use in servicing the distributor's products; and

(d) transportation costs paid by the dealer for delivery of the new farm implement to the dealer's place of business.

9. Section 27 of the Act is amended by adding the following clauses:

(j) a multiple package of new parts where,

(i) the multiple package does not contain all of the parts that it contained when the distributor supplied it under the dealership agreement,

(ii) the parts are not individually packaged within the multiple package,

(iii) the parts do not have individual part numbers, and

(iv) proof of purchase is not provided upon request;

(k) a new part that a person other than the distributor has repackaged unless the distributor has supplied the repackaging material for use in returning parts to the distributor or as a replacement for damaged packaging;

(l) a new part that the distributor identified as non-returnable when the dealer purchased it from the distributor.

10. The Act is amended by adding the following section before the heading to section 31:

Distributor's right to require repurchase

30.1 (1) In this section,

"current net price", "invoice price", "new farm implement", "new part" and "used farm implement" have the same meaning as in subsection 23 (1) except that,

(a) references to a dealer shall be read as references to a distributor who is not a manufacturer, and

(b) references to a distributor shall be read as references to a manufacturer; ("prix net courant", "prix de facture", "appareil agricole neuf", "pièce neuve", "appareil agricole usagé")

"distributor agreement" means an agreement between a distributor who is not a manufacturer and a manufacturer under which the distributor is required by the manufacturer to maintain a supply of new farm implements and new parts supplied by the manufacturer. ("contrat du distributeur")

No contracting out

(2) This section applies to a distributor agreement despite any agreement or waiver to the contrary, unless the manufacturer and the distributor agree in writing to repurchase terms that are more favourable to the distributor than this section.

Right to repurchase

(3) Within 90 days after a distributor agreement has expired or is terminated, the distributor may by written notice require the manufacturer to repurchase all or any new farm implements and new parts supplied by the manufacturer under the agreement.

Election

(4) The notice to repurchase shall state whether the distributor intends to rely on this section or the terms of an agreement with the manufacturer made under subsection (2).

If no election

(5) If the distributor fails to make the election mentioned in subsection (4), the distributor shall be deemed to have elected to rely on this section.

Application of other provisions

(6) Sections 25 to 28 and 30 apply to the distributor and the manufacturer except that,

(a) references to the dealer shall be read as references to the distributor; and

(b) references to the distributor shall be read as references to the manufacturer.

Bulk Sales Act

(7) The Bulk Sales Act does not apply to a sale to the manufacturer under this section.

11. Clause 35 (c) of the Act is repealed and the following substituted:

(c) prescribing information to be included in a dealership agreement and setting out legal rights and obligations for parties to the agreement;

Commencement

12. This Act comes into force on a day to be named by proclamation of the Lieutenant Governor.

Short title

13. The short title of this Act is the Farm Implements Amendment Act, 2001.

EXPLANATORY NOTE

The Bill amends the Farm Implements Act.

An agreement between a distributor and a dealer with respect to a farm implement shall contain the legal rights and obligations that are prescribed by the regulations for the parties to the agreement.

A distributor who is liable under the Act to make repairs to a farm implement may either make the repairs, as the Act presently allows, or may reimburse the dealer for making the repairs.

If the distributor of a new farm implement or a new repair part is not the manufacturer of it, the manufacturer shall reimburse the distributor for the costs that the distributor incurs in meeting its obligations under section 18 of the Act to honour warranties respecting parts supply and quality of parts, to repair defects and to notify purchasers of defects.

If the distributor of a defective farm implement is not the manufacturer of it, the manufacturer shall reimburse the distributor for the costs that the distributor incurs to comply with the requirements that section 22 of the Act imposes on the distributor.

If, under the Act, a dealer requires a distributor to repurchase new farm implements and new parts that the distributor has supplied, the repurchase amount that the distributor pays to the dealer shall include the amount of 50 per cent of the latest published price for all mandatory special tools and equipment that the dealer has purchased within the previous five-year period and that are unique for use in servicing the distributor's products. The following items are added to the list of items that a distributor is not required to repurchase: certain cases of a multiple package of new parts that is incomplete, an improperly repackaged new part and a new part that the distributor has identified as non-returnable.

A distributor who is not a manufacturer is given the right to have the manufacturer repurchase farm implements and parts supplied by the manufacturer, similar to a dealer's right in section 24 of the Act.