Damages for misrepresentation or failure to disclose
7(1)If a franchisee suffers a loss because of a misrepresentation contained in the disclosure document or in a statement of material change or as a result of the franchisor’s failure to comply with section 5, the franchisee has a right of action for damages against
(b)
the franchisor’s broker,
(c)
the franchisor’s associate, and
(d)
every person who signed the disclosure document or statement of material change.
7(2)If a disclosure document or statement of material change contains a misrepresentation, a franchisee who acquired a franchise to which the disclosure document or statement of material change relates shall be deemed to have relied on the misrepresentation.
7(3)If a franchisor failed to comply with section 5 with respect to a statement of material change, a franchisee who acquired a franchise to which the material change relates shall be deemed to have relied on the information set out in the disclosure document.
7(4)A person is not liable in an action under this section for misrepresentation if the person proves that the franchisee acquired the franchise with knowledge of the misrepresentation or of the material change, as the case may be.
7(5)A person, other than a franchisor, is not liable in an action under this section for misrepresentation if the person proves
(a)
that the disclosure document or statement of material change was given to the franchisee without the person’s knowledge or consent and that, on becoming aware of its having been given, the person promptly gave written notice to the franchisee and the franchisor that it was given without that person’s knowledge or consent,
(b)
that, after the disclosure document or statement of material change was given to the franchisee and before the franchise was acquired by the franchisee, on becoming aware of any misrepresentation in the disclosure document or statement of material change, the person withdrew consent to it and gave written notice to the franchisee and the franchisor of the withdrawal and the reasons for it,
(c)
that, with respect to any part of the disclosure document or statement of material change purporting to be made on the authority of an expert or purporting to be a copy of or an extract from a report, opinion or statement of an expert, the person had no reasonable grounds to believe and did not believe that
(i)
there had been a misrepresentation,
(ii)
the part of the disclosure document or statement of material change did not fairly represent the report, opinion or statement of the expert, or
(iii)
the part of the disclosure document or statement of material change was not a fair copy of or extract from the report, opinion or statement of the expert,
(d)
that, with respect to any part of the disclosure document or statement of material change purporting to be made on the authority of a statement in writing by a public official or purporting to be a copy of or an extract from a report, opinion or statement of a public official, the person had no reasonable grounds to believe and did not believe that
(i)
there had been a misrepresentation,
(ii)
the part of the disclosure document or statement of material change did not fairly represent the report, opinion or statement of the public official, or
(iii)
the part of the disclosure document or statement of material change was not a fair copy of or extract from the report, opinion or statement of the public official, or
(e)
that, with respect to any part of the disclosure document or statement of material change not purporting to be made on the authority of an expert or of a statement in writing by a public official and not purporting to be a copy of or an extract from a report, opinion or statement of an expert or public official, the person
(i)
conducted an investigation sufficient to provide reasonable grounds for believing that there was no misrepresentation, and
(ii)
believed there was no misrepresentation.
2007, c.F-23.5, s.7; 2013, c.31, s.18