November 20, 2020 Articles

Privity of Contract as a Defense to Consumer Class Actions in Canada

In Canada, the viability of a consumer class action against an entity that did not sell directly to consumers depends on which province’s laws govern the case.

By Nina Butz and Ranjan Agarwal

Privity of contract has a well-established presence in Canadian common law, with Supreme Court cases delineating the doctrine and its “principled” exception rule. But the law of privity as it relates to consumer contracts has varying application across Canadian provinces, largely because of differences in provincial consumer protection legislation. These differences have important implications for national consumer class actions, as the viability of certain claims and the application of privity of contract as a defense will vary across the country.

This article first offers a primer on the class action and consumer protection regimes in Canada before outlining the law of privity and the statutory factors that influence divergence from the common law, which may be of particular importance to class action lawyers in the U.S. when considering how to structure or defend “copycat” consumer claims in Canada.

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