How to Reject Defective Goods From a Supplier in Canada

A Canadian business may be able to reject defective goods when the defect breaches a contractual condition or an applicable implied condition and the buyer has not accepted the goods. The result depends on the contract, the governing provincial sale-of-goods statute, what the buyer did after delivery and how promptly it notified the supplier. Rejection is not an automatic remedy for every defect. Start with the purchase order, master supply agreement, specifications, warranty, delivery terms and any terms incorporated by reference. Check: Provincial sale-of-goods statutes supply default rules, but commercial parties can often vary or exclude implied terms. Under Alberta’s Sale of Goods Act, for example, rights, duties and liabilities arising by implication of law may be negatived or varied by express agreement, course of dealing or binding usage.