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The Rural Voice, 1991-09, Page 24THE FARM IMPLEMENTS ACT -A QUICK FIX The Ontario Farm Implements Act, passed in 1988, provides a formal process for the resolution of problems that farmers encounter when dealing with the farm machinery industry. The main features of the "Act" are the registration of distributors and dealers; implied warranties with each farm implement; the availability of emergency and regular order repair parts; a specified procedure for the return or replacement of defective equipment; a repurchase system of dealers' unused inventory of farm equipment by a distributor on the ter- mination of a distributor dealer agree- ment; and the creation of a mediation system for resolving disputes. The Act applies to any farm imple- ment, which is defined as any equip- ment or macflfnery designed and used for agricultural or organic purposes, and includes repair parts for the machinery. The Act covers relation- ships between a farmer and any dealers and distributors with whom the farmer does business. A dealer is a person who, in the ordinary course of business, offers farm implements or parts to a dealer. The Act does not apply to farm implements with a man- ufacturer's list price of $3,500 or less; motor vehicles that are not farm vehi- cles; tractors that develop 20 horse- power or less; lawn and garden equip- ment; and tires. A dealer or distributor who sells, or offers for sale, farm implements and who is unregistered under the Act is liable to prosecution. Registration is required annually and is subject to cer- tain conditions, including the payment of license fees. When a farm implement is sold, a sale agreement between a purchaser and the dealer must be made. The agreement is to be in writing and must contain information describing the farm implement and any trade-in; the purchase price and any trade-in allowance; the date of delivery; the name and address of the purchaser, dealer, and distributor. Further, the agreement must include the nature and duration of any warranties. Perhaps the most important feature of the Act is that a farm implement is warranted to develop the power stated in the sale agreement. In addition, on the sale of any new farm implement, there is a warranty that the implement is properly constructed and will per- form to the manufacturer's specifica- tions. Warranties as to power and quality will be the lesser of one year or 1,000 hours of operation for trac- tors; the lesser of one year or 500 hours of operation for combines; and one year for any other farm imple- ment. On the sale of a new farm imple- ment, there is an implied warranty that repair parts will be available for 10 years and will be free from defects. The distributor is liable to honour the implement power and quality warran- ty. The dealer and distributor are jointly liable to honour the parts supply warranty. A distributor or a dealer may, of course, give warranties that offer broader protection for the consumer than those created by the Act. Under the repair parts warrranty, when a dealer and distributor are noti- fied that a farm implement requires emergency repair parts, those parts must be made available within three working days unless there are condi- tions beyond the distributor's control which prevent delivery. The repair parts cannot cost more than the manu- facturer's suggest list price, but a service charge may be added to the price. If the dealer and distributor are unable to supply repair parts, the distributor must provide a satisfactory substitute farm implement or pay one half of the normal rental rate for a similar implement to the consumer. If the implement is shown to be defective and fails to perform to the manufacturer's specifications within 12 months following delivery during the first 10 days or 100 hours of actual use, the dealer or distributor must at- tempt, within four working days of ob- taining notice, to make the implement perform, or provide a substitute. If, after two weeks, the implement still does not meet the manufacturer's spe- cifications, the distributor must re- place the implement or the dealer must refund the purchaser. Any trade-in will be returned or fair market value for the trade-in will be given to the consumer. Under the Act, the Ontario Farm Implements Board can enquire into and resolve disputes with respect to any matter arising under the Act. The Board can investigate claims regard- ing charges by dealers for repairs and can make orders to ensure that there is compliance with any of its decisions. Further, the Board can, on the request of any party, appoint a mediator to resolve a dispute. The Board has the power to ensure compliance with prescribed safety standards for farm implement performance and that any safety information be given to pur- chasers. In addition, the Board has the power to conduct research related to farm implement design, construction, performance, and safety, and to work with manufacturers to encourage standardization and improvement in farm implements in Ontario.° Agrilaw is a syndicated column produced by a full service London law firm. Marlene McGrath, an associate lawyer, specializes in corporate and commercial law, wills, and estate planning. Agrilaw is intended to provide information to farmers on subjects of interest and importance. The opinions expressed are not intended as legal advice. Before acting on any information contained in Agrilaw, readers should obtain legal advice with respect to their own particular circumstances. 20 THE RURAL VOICE