Canadian Contractor

Refer to the law when asking for deposits


November 27, 2020
By Patrick Flannery

In response to “Why does a contractor need a deposit at all?”, Frank makes the good point that many provinces have laws about how much deposit a supplier can ask for. However, the section of law he references here appears to apply only to “direct sales contracts” where a single service or product is bought on the spot. It seems to us construction contracts would normally be considered “continuing service” or “future performance” contracts, so it’s unclear to us if that section applies. Certainly $100 doesn’t seem like enough for a deposit on a home renovation project! Can anyone clear this up? Don’t make us phone a lawyer!

Here is the first rule that everyone should know, but often doesn’t – what does the law state in your Province? In BC the law is 10% of the contract value to a MAXIMUM of $100 no exceptions. Refer to section 4 of the Business Practices and Consumer Protection Act.

I tell contractors, drop your materials and I will give you a cheque/e-transfer the same day or that night for fair value.

Got a guy asking for more? show him a copy of the law.

  • Frank

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