The Alberta Farm Implement Act Farm Implement and Dealership Act
The Farm Implement Act and Farm Implement Dealerships Act were created to help protect the investments farmers make in their machinery. This legislation establishes minimum warranty requirements, outlines the required availability for repair pairs, and creates a process for resolving disputes over agreements and implement performance. They also guide the creation of agreements between dealers and distributors.
Farm Implement and Dealership Act Administration
The Farmers' Advocate Office (FAO) is the administrator for the Farm Implement Act and Farm Implement Dealerships Act . All farm implement disputes are reviewed by the FAO's Farm Implement Inspector prior to being forwarded to the Farm Implement Board. Farmers are encouraged to make every effort to settle their dispute with the dealer prior to approaching the FAO. The FAO also manages the licensing of dealers and distributors.
The Farm Implement Board
The Farm Implement Board reports to the Minister of Agriculture and Forestry and advises the Minister about matters arising from the operation of the Farm Implement Act and Farm Implement Dealerships Act. The Board hears applications for compensation and other issues that cannot be resolved with the FAO Farm Implement Inspector.
What farm implements does the Farm Implement and Dealership Act and the Farm Implement Act cover?
A "farm implement" means any implement, equipment, engine, motor, machine, combine, tractor or attachment used or intended for use in farming operations. It does not include anything excluded from the definition of farm implement by the Regulations.
What farm implements are not covered by the Farm Implement and Dealership Act or the Farm Implement Act ?
The following farm implements are NOT covered by the Farm Implement and Dealership Act or the Farm Implement Act:
- farm implements that have a retail selling price of $4,000 or less;
- motor vehicles as defined in the Traffic Safety Act
- lawn and garden equipment
- tractors, and their attachments, with a net power capability of 30 hp (22.35 kw) or less
- truck boxes and hoists
- snow vehicles as defined in the Traffic Safety Act, snow plows and snow blowers
- trailers and drill carriers
- dozer blades and scrapers
In December 2014, a definition for "distributor-approved demonstrator implement" was added. This refers to an implement that:
- was sold to the dealer as a demonstrator;
- was invoiced and used by the dealer as a demonstrator; and
- was approved by the distributor to be used by the dealer as a demonstrator. This approval must be in writing and must be obtained prior to using the implement as a demonstrator.
Distributor-approved demonstrator implements are considered "unused farm implements" and covered by the consumer protection provided under the Farm Implement and Dealership Act.
Are there any addition exemptions from the Farm Implement Act?
Yes, there are additional exceptions. The Alberta Farm Implement Act does not apply when a farm implement is sold at public auction, or is sold by a farmer in the ordinary course of farming operations, an executor, or administrator or a public official acting under judicial process. The Act does not cover farm implements sold by dealers or distributions at a public auction.
What protection does the Farm Implement and Dealership Act and the Farm Implement Act provide?
The Act establishes the following protection:
- the minimum term of the warranty when buying new farm machinery or equipment
- the warranty, conditions, and timelines in which repair parts will be readily available
Is a warranty required on used parts?
No. The warranty only extends to new parts used to complete warranty obligations for new farm implements. Some dealers may voluntarily offer limited used parts exchange rights.
Can new farm implements be purchased without warranty?
No. Regardless of anything stated in an agreement or sales contract, every new farm implement sold is warranted to be:
- made of good material
- properly constructed as to design and workmanship
- in good working order
- capable of performing under reasonable operating conditions and with proper use and maintenance the work for which it is intended in a satisfactory manner
- designed and constructed to ensure reasonable durability with proper use and maintenance and under reasonable operating conditions.
This warranty applies for at least one year from the date the farm implement is first used in the first normal season of use.
Does the Farm Implement and Dealership Act and the Farm Implement Act cover lease or lease-purchase agreements?
Are implements used by custom operators covered by the warranty provided under the Farm Implement and Dealership Act or the Farm Implement Act ?
The Farm Implement and Dealership Act defines a "custom operator" as "one who purchases a new farm implement and uses or permits the use of that farm implement for hire or for service to others to the extent of at least 50% per cent of the annual use of the implement."
The warranty would require that the implement:
- be made of good material
- be properly constructed as to design and workmanship
- in good working order
What binds a dealer or distributor to the Farm Implement Act?
No person shall carry on a business as a dealer without holding a dealer's licence, and no person shall carry on a business as a distributor without holding a distributor's licence. Before you buy a machine from a dealer, make sure the company has an dealer licence. These licences must be renewed every year and run the full calendar year.
How do I obtain emergency repair service for my farm implement?
You should let the dealer's parts manager know that the implement is down and emergency repair parts are required. Most distributors have a "machine down" order system, which can search all distribution centres in Canada for repair parts. If no stock can be found, they will check American distribution centres. When the needed parts are found will notify the dealer where they are, when they can be shipped and by what carrier.
What happens when a strike, transportation problem or some other factor beyond control of the dealer or distributor delays delivery of repair parts?
In such a case, neither the dealer nor distributor is held responsible.
How long will repair parts be available on new farm implements?
Every sale agreement of a new farm implement carries a warranty that repair parts will be made available for 10 years from the date of the agreement and must be available within a time determined by the Farm Implement Act Regulations. Original equipment manufacturer (OEM) repair parts carry a 90-day warranty stating they are free of defects in material and workmanship from the date the parts are first used in the first normal season of use.
Is it legal for the distributor or dealer to use anything other than original equipment manufacturer (OEM) parts when repairing an implement under warranty?
No. The dealer and distributor are obligated to use parts that are new, and of the standard quality and size prescribed by the manufacturer for that implement. A farmer may opt to waive this requirement by authorizing the substitution in writing.
Are dealers required to carry out warranty repairs on the farm?
No. The Farm Implement and Dealership Act does not stipulate where warranty repairs should take place. Most contracts state that the warranty repairs will occur at the dealer's place of business, which means that that, in general, implements are to be delivered to the dealer. A work order should be signed with the proper instructions in order to have the warranty work done.
Where will repairs be made to large equipment such as air seeders, combines and swathers?
If requested, a dealer may come to the farm and perform the repairs in the field. If this happens, the dealer may charge the farmer for mileage and travel time from the dealership to the farm. The cost of the repair would be covered by warranty, if applicable.
Failure to Perform
If a new farm implement keeps breaking down, what recourse is available besides the standard warranty?
If a new farm implement fails to work properly when it is maintained and used under reasonable operating conditions, a farmer can send a Notice of Failure to Perform to the FAO, the distributor, and the dealer.
This form must be sent within the first 10 days or 50 hours of actual use. The 10 days do not need to be consecutive. Upon formal notification, the dealer and distributor have 7 working days to correct all the problems. If all the problems are not corrected, the dealer or distributor must supply the purchaser with a satisfactory substitute farm implement within 48 hours after the expiry of the 7 day period.
If the dealer and distributor still cannot make the implement perform within a reasonable time after supplying the substitute implement, they must replace the implement under warranty with a farm implement that is acceptable to the purchaser, or cancel the sale agreement and refund all monies paid. If a trade-in is involved, it would have to be returned (if possible) or the the farmer would need to be paid the fair market price of the trade-in.
Should a copy of the sale agreement be provided when new machinery is purchased?
Yes. The dealer must use a sale agreement that is acceptable under the Farm Implement and Dealership Act.
What information must the sale agreement contain?
All machine sales, new or used, must be written in the proper agreement and contain:
- an address for the dealer and distributor
- the nature and duration of all warranties
- a description of the farm implement including the serial and model numbers.
If you are buying two implements, the agreement must show a purchase price for each one, as well as the purchase price of any attachment. Note that the Direct Sales Cancellation Act does not apply to the sale of the farm implement.
Is a sale agreement legally binding if it's signed only with the sales representative?
No. A sale agreement is legally binding once it has been signed by the dealer or by a representative authorized by the dealer, or upon the farmer's accepted delivery of the implement under the agreement.
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Farmers' Advocate Office
Phone: 310-FARM (3276)