Rescission and contract cancellation: Practice Quiz | DealerPrep

Question 1

Counted from when the customer actually receives the vehicle, what is the maximum number of days a consumer has to cancel a non-disclosure contract under section 50 of O. Reg. 333/08?

Accepted Answer

Subsection 50(5) of O. Reg. 333/08 caps the cancellation window at 90 days after the consumer actually receives the motor vehicle. The clock runs from receipt of the vehicle, not from contract signing or delivery date promises.

Answer

30 days

Answer

60 days

Answer

90 days

Answer

One year

Question 2

Who is entitled to cancel a contract under section 50 of O. Reg. 333/08 for a dealer's failure to disclose required information?

Accepted Answer

Subsection 50(1) limits the cancellation right to the other party in the contract who was not a registered motor vehicle dealer. Wholesale dealer-to-dealer transactions are outside the section 50 regime.

Answer

Any purchaser or lessee, including another registered motor vehicle dealer who bought wholesale

Answer

Only a purchaser or lessee who is not themselves a registered motor vehicle dealer

Answer

Only a consumer who paid in cash, not on credit

Answer

Only a consumer who bought from a franchised new-car dealer

Question 3

Under subsection 50(4) of O. Reg. 333/08, a disclosed odometer distance is treated as accurate if it is within what tolerance of the correct distance?

Accepted Answer

Subsection 50(4) deems a disclosed distance accurate when it falls within the lesser of 5 per cent or 1,000 kilometres of the correct figure. The "lesser" rule means high-mileage vehicles are capped at the 1,000 km tolerance rather than a larger 5 per cent figure.

Answer

The greater of 5 per cent or 1,000 kilometres

Answer

The lesser of 5 per cent or 1,000 kilometres

Answer

The lesser of 10 per cent or 1,000 kilometres

Answer

The lesser of 5 per cent or 500 kilometres

Question 4

True or false: a dealer who took every reasonable step to verify a vehicle's history and honestly believed the disclosure was accurate can defeat a section 50 cancellation claim by proving that honest belief.

Accepted Answer

Subsection 50(2) of O. Reg. 333/08 makes the rescission right strict-liability. The consumer can cancel even if the dealer did not know the information was wrong and honestly believed it to be accurate, regardless of the steps the dealer took to verify.

Answer

True

Answer

False

Question 5

A customer cancels a sale under section 50 after trading in her 2018 sedan for a 2020 SUV; the dealer has already retailed the trade-in to a third party. What is the dealer required to do about the trade-in?

Accepted Answer

Subsection 50(15) of O. Reg. 333/08 says the dealer is not required to return the traded-in vehicle but must refund the amount paid for it, or the credit shown on the contract, under clause 50(10)(b) or 50(11)(b). Cancellation unwinds the dollars, not the trade-in vehicle itself.

Answer

Locate and recover the sedan from the third-party buyer and return it to the customer

Answer

Refund the customer the amount paid for the trade-in or the credit shown on the contract for it

Answer

Refund only the current market value of the sedan, not the contract figure

Answer

Provide a like-kind replacement sedan from the dealer's used inventory

Rescission and contract cancellation

Counted from when the customer actually receives the vehicle, what is the maximum number of days a consumer has to cancel a non-disclosure contract under section 50 of O. Reg. 333/08?

Who is entitled to cancel a contract under section 50 of O. Reg. 333/08 for a dealer's failure to disclose required information?

Under subsection 50(4) of O. Reg. 333/08, a disclosed odometer distance is treated as accurate if it is within what tolerance of the correct distance?

True or false: a dealer who took every reasonable step to verify a vehicle's history and honestly believed the disclosure was accurate can defeat a section 50 cancellation claim by proving that honest belief.

A customer cancels a sale under section 50 after trading in her 2018 sedan for a 2020 SUV; the dealer has already retailed the trade-in to a third party. What is the dealer required to do about the trade-in?

5 questions here. 1,000+ more in the app.