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Farm Implement and Dealership Act
The Farm Implement and Dealership Act was 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 and Dealership Act. The FAO’s farm implement inspector reviews all farm implement disputes prior to a review by 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 dealer and distributor licensing.
Farm Implement Regulation
The Farm Implement Regulation, under the Farm Implement and Dealership Act, describes the farm implements exempted from the act, the licensing process and associated fees, and governance related to the board.
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 and Dealership Act. The board hears applications for compensation and other issues that cannot be resolved with the farm implement inspector.
Definitions under the act
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.
The following farm implements are not covered by the Farm Implement and Dealership Act:
- farm implements that have a retail selling price of $7,000 or less
- motor vehicles as defined in the Traffic Safety Act
- lawn and garden equipment
- tractors, and their attachments, with a net engine power capability of 30 hp (22.35 kw) or less
- truck boxes and hoists
- off-highway vehicles as defined in the Traffic Safety Act
- snow plows and snow blowers
- trailers and equipment carriers
Trailers and equipment carriers "Distributor-approved demonstrator implement" refers to:
- an implement that was sold to the dealer as a demonstrator
- an implement that was invoiced and used by the dealer as a demonstrator
- an implement with written approval by the distributor – written approval is required prior to the dealer using the implement as a demonstrator
- farm Implements sold at public auction
Distributor-approved demonstrator implements are considered "Unused farm implements" and covered by the consumer protection provided under the Farm Implement and Dealership Act. This includes farm implements purchased under lease and financial lease-purchase agreements.
"Custom operator" refers to an operator who purchases a new farm implement and permits its use for hire or for service to others at least 50% of the annual use of the implement.
The Farm Implement and Dealership Act establishes the following protection:
- a minimum one-year warranty term for new farm implements
- the warranty, conditions and timelines in which repair parts must be provided
- no person shall conduct business as a dealer without holding a dealer licence
- no person shall conduct business as a distributor without holding a distributor licence
- licences pertaining to dealers and distributors of farm implements must be renewed annually
Warranty only extends to new parts under warranty obligations for new farm implements. Some dealers may voluntarily offer limited used parts exchange rights.
Farm implements sold are 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 is intended in a satisfactory manner
- designed and constructed so as to ensure reasonable durability with proper use and maintenance and under reasonable operating conditions
Purchasers must inform a dealer parts manager that the implement is down and emergency repair parts are required. Most distributors have a 'machine down' order system that will search all distribution centres in Canada for repair parts. The dealer will check American distribution centres for repair parts if no stock is found within Canada.
The distributor will inform the dealer of the repair parts location, the estimated time of arrival including shipping date, and the carrier of the shipment. The dealer and distributor will not be held responsible for a delay in the repair part due to a strike, transportation problem or some other factor beyond their control. If a purchaser is provided with a substitute farm implement due to the delay of repair parts, the dealer or distributor and the purchaser will each pay half the rental cost.
The Farm Implement and Dealership Act does not stipulate where warranty repairs must take place. The FAO advises that a work order be signed with stipulations pertaining to the repair location including provisions for the payment of mileage to the farm location.
Obligation to provide repair parts
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 Regulation. 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.
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.
Notice of failure to perform
If a new farm implement fails to meet quality standards when it is maintained and used under reasonable operating conditions, a farmer may 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 business 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 farmer would need to be paid the fair market price of the trade-in.
The Minister of Agriculture and Forestry may publish the make, model and serial number of farm implements involved in a Notice of Failure to Perform.
The dealer must use a sale agreement that is acceptable under the Farm Implement and Dealership Act. A sale agreement is legally binding once it is assigned by the dealer or by a representative authorized by the dealer, or upon the farmer's accepted delivery of the implement under the agreement.
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 2 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.
- Notice of Failure to Perform
- Dealer Licence Form (PDF, 116 KB)
- Distributor Licence Form (PDF, 116 KB)
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