Leasing Goods:  Ending the Contract

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The Consumer Protection Act protects you when you when you lease goods for four months or more from a merchant. This protection applies to leases of works of art, refrigerators, tents for an event or other things you might need.

Leasing means to rent.

The law also protects you when you want to end a contract of lease with a merchant. There are several options available.

Important! The rules for rental housing are different from the ones in this table.

Ways to End the Contract

Ending the Contract Without a Penalty (only for certain types of lease contracts with "guaranteed residual value")

You

(as the person leasing, called the “lessee”)

The Merchant

(as the “lessor”)

If you already have possession of the goods, you must return them to the merchant
  • within two days after getting a copy of the contract of lease, and
  • in the same state you received them.

If you didn’t already have the goods, you must send a written notice of cancellation to the merchant, ideally by registered mail.

The merchant must take back the leased goods without any fees.

The merchant must also reimburse you any money that you paid for leasing the goods.

Ending the Contract With a Penalty (at any time for all contracts of lease of 4 months or more)

You

(as the person leasing, called the “lessee”)

The Merchant

(as the “lessor”)

You must give the leased goods back to the merchant.

The goods must be in good condition, that is, with normal wear and tear.

The merchant must take back the leased goods.

The merchant can claim money from you:

  • any payments due and unpaid 
  • for abnormal wear and tear of the goods 
  • harm the merchant suffers that are the direct result of cancellation of the contract (for example, being unable to sell the goods or re-rent them at the same price)

Purchase of the Goods

You

(as the person leasing, called the “lessee”)

The Merchant

(as the “lessor”)

You can choose to become the owner of the leased goods by buying them
  • at the end of the lease period if the contract includes an option to purchase.

    You must pay the amount set for the purchase of the goods

You must pay all amounts still owed under contract, plus the guaranteed residual value.

The merchant must give you the goods and respect the conditions of the lease contract.

Transferring the Contract (often called “assignment of the contract”)

(Important! It’s possible for a contract to prohibit or limit assignment.)

You

(as the person leasing, called the “lessee”)

The Merchant

(as the “lessor”)

Transferring the contract lets you be replaced by another person who becomes the lessee.

Unless you have a special agreement with the merchant, you’ll no longer have any connection with the lease of the goods.  

To transfer the contract, you must take these steps:

  • Advise the merchant of your intentions.
  • Give the merchant the name and address of the person you want to transfer the contract to.
  • Get the merchant’s consent.

To do this, you must send the merchant a written notice by registered mail.

The merchant can refuse the transfer, but only under these two conditions:

  • The merchant has a serious reason to refuse.
  • The merchant advises you of the reason for refusal within 15 days of receiving your notice.  

If the merchant doesn’t give you the reason for the refusal within the 15 days, the law considers that the merchant has accepted the transfer.

Whenever there is a transfer, the merchant can claim money from you for reasonable expenses related to the transfer (fees for credit checks of the new lessee, for example).

Sub-Leasing the Goods

(Important! It’s possible for a contract to prohibit or limit sub-leasing.)

You

(as the person leasing, called the “lessee”)

The Merchant

(as the “lessor”)

Sub-leasing means finding a person (a “sub-lessee”) who wants to use the goods you have rented and accepts to pay the rent in your place.

You remain the lessee of the goods and are responsible for them. If there’s a problem, the merchant can turn to you or to the sub-lessee.

To sub-lease goods, you must take these steps:

  • Notify the merchant of your intention.  
  • Give the merchant the name and address of the person you want to sub-lease to.
  • Get the merchant’s consent. 

You must send a written notice to the merchant by registered mail.

The merchant can refuse the sub-lease but only in if 

  • if the merchant has a serious reason to refuse, and
  • the merchant advises you of the reason for the refusal within 15 days of receiving your notice.  

If the merchant doesn’t give you the reason for the refusal within the 15 days, the law considers that the merchant has accepted the sub-lease. 

Whenever there’s a sub-lease, the merchant can claim money from you for reasonable expenses related to the sub-lease (fees for credit checks of the new sub-lessee, for example). 

Important !
This article explains in a general way the law that applies in Quebec. This article is not a legal opinion or legal advice. To find out the specific rules for your situation, consult a lawyer or notary.

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