Province of Alberta FACTORS ACT. Revised Statutes of Alberta 2000 Chapter F-1. Current as of January 1, Published by Alberta Queen s Printer
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1 Province of Alberta FACTORS ACT Revised Statutes of Alberta 2000 Current as of January 1, 2002 Published by Alberta Queen s Printer Alberta Queen s Printer 7 th Floor, Park Plaza Avenue Edmonton, AB T5K 2P7 Phone: Fax: qp@gov.ab.ca Shop on-line at
2 Copyright and Permission Statement Alberta Queen's Printer holds copyright on behalf of the Government of Alberta in right of Her Majesty the Queen for all Government of Alberta legislation. Alberta Queen's Printer permits any person to reproduce Alberta s statutes and regulations without seeking permission and without charge, provided due diligence is exercised to ensure the accuracy of the materials produced, and Crown copyright is acknowledged in the following format: Alberta Queen's Printer, 20.* *The year of first publication of the legal materials is to be completed. Note All persons making use of this document are reminded that it has no legislative sanction. The official Statutes and Regulations should be consulted for all purposes of interpreting and applying the law.
3 FACTORS ACT Table of Contents 1 Interpretation 2 Disposition by mercantile agent 3 Pledge of documents 4 Pledge for antecedent debt 5 Consideration 6 Application 7 Agreements through clerks, etc. 8 Lien 9 Disposition by buyers and sellers 10 Disposition by buyer obtaining possession 11 Effect of transfer 12 Mode of transferring documents 13 Liability of agent 14 Powers of agent HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Alberta, enacts as follows: Interpretation 1(1) In this Act, (a) document of title includes (i) a bill of lading, dock warrant, warehousekeeper s certificate or warrant or order for the delivery of goods, and (ii) any other document used in the ordinary course of business as proof of the possession or control of goods or authorizing or purporting to authorize,
4 RSA 2000 Section 2 FACTORS ACT either by endorsement or delivery, the possessor of the document to transfer or receive goods; (b) mercantile agent means a mercantile agent having, in the customary course of the mercantile agent s business as a mercantile agent, authority either to sell goods or to consign goods for the purpose of sale or to buy goods or to raise money on the security of goods; (c) pledge includes any contract pledging or giving a lien or security on goods whether in consideration of an original advance or of a further or continuing advance or of a pecuniary liability. (2) A person is deemed to be in possession of goods or of the documents of title to goods when the goods or documents are in the person s actual custody or are held by another, subject to the person s control, or for the person or on the person s behalf. RSA 1980 cf-1 s1 Disposition by mercantile agent 2(1) If a mercantile agent is, with the consent of the owner, in possession of goods or of the documents of title to goods, a sale, pledge or other disposition of the goods made by the mercantile agent when acting in the ordinary course of business of a mercantile agent is as valid, subject to this Act, as if the mercantile agent were expressly authorized by the owner of the goods to make the disposition, if the person taking under the disposition acts in good faith and has not at the time of the disposition notice that the person making the disposition is not authorized to make it. (2) If a mercantile agent has, with the consent of the owner, been in possession of goods or of the documents of title to goods, a sale, pledge or other disposition that would have been valid if the consent had continued is valid notwithstanding the termination of the consent, if the person taking under the disposition has not at the time of the disposition notice that the consent has been terminated. (3) If a mercantile agent has obtained possession of any documents of title to goods by reason of the mercantile agent being or having been with the consent of the owner in possession of the goods represented by the documents or of any other documents of title to the goods, the mercantile agent s possession of the first-mentioned documents is for the purposes of this Act deemed to be with the consent of the owner. 2
5 RSA 2000 Section 3 FACTORS ACT (4) For the purposes of this Act, the consent of the owner is presumed in the absence of evidence to the contrary. RSA 1980 cf-1 s2 Pledge of documents 3 A pledge of the documents to title of goods is deemed to be a pledge of the goods. RSA 1980 cf-1 s3 Pledge for antecedent debt 4 When a mercantile agent pledges goods as security for a debt or liability already due from the mercantile agent to the pledgee before the time of the pledge, the pledgee acquires no further right to the goods than could have been enforced by the mercantile agent at the time of the pledge. RSA 1980 cf-1 s4 Consideration 5(1) The consideration necessary for the validity of a sale, pledge or other disposition of goods pursuant to this Act is either (a) a payment in cash, (b) the delivery or transfer or (i) of other goods, (ii) of a document of title to goods, or (iii) of a negotiable security, (c) any other valuable consideration. (2) If goods are pledged by a mercantile agent in consideration of the delivery or transfer of (a) other goods, (b) a document of title to goods, or (c) a negotiable security, the pledgee acquires no right or interest in the goods so pledged in excess of the value of the goods, documents or security when so delivered or transferred in exchange. RSA 1980 cf-1 s5 3
6 RSA 2000 Section 6 FACTORS ACT Application 6 Sections 2 to 5 do not apply to a consignment to which the Personal Property Security Act applies cp-4.05 s81 Agreements through clerks, etc. 7 For the purposes of this Act, an agreement made with a mercantile agent through a clerk or other person authorized in the ordinary course of business to make contracts of sale or pledge on the mercantile agent s behalf is deemed to be an agreement with the agent. RSA 1980 cf-1 s6 Lien 8(1) If the owner of goods (a) has given possession of the goods to another person for the purpose of consignment or sale, or (b) has shipped the goods in the name of another person and the consignee of the goods has not had notice that that person is not the owner of the goods, the consignee has, in respect of advances made to or for the use of that person, the same lien on the goods as if that person were the owner of the goods and may transfer the lien to another person. (2) Nothing in this section limits or affects the validity of a sale, pledge or disposition by a mercantile agent. RSA 1980 cf-1 s7 Disposition by buyers and sellers 9(1) If a person having sold goods continues or is in possession of the goods or of the documents of title to the goods, the delivery or transfer of those goods or documents of title by that person, or by a mercantile agent acting for that person, under a sale, pledge or other disposition, or under an agreement for sale, pledge or other disposition, to a person receiving the goods or documents in good faith and without notice of the previous sale, has the same effect as if the person making the delivery or transfer were expressly authorized by the owner of the goods to make the disposition. (2) Subsection (1) does not apply to a sale, pledge or other disposition of goods or of documents of title to goods, other than negotiable documents of title to goods, that is out of the ordinary course of business of the person having sold the goods where, prior to the sale, pledge or disposition, the interest of the owner is 4
7 RSA 2000 Section 10 FACTORS ACT registered in the Personal Property Registry in accordance with the regulations made under the Personal Property Security Act, and Part 4 of that Act applies to that registration. RSA 1980 cf-1 s8;1988 cp-4.05 s81 Disposition by buyer obtaining possession 10(1) If with the consent of the seller a person who has bought or agreed to buy goods obtains possession of the goods or of the documents of title to the goods, the delivery or transfer of those goods or documents of title by that person, or by a mercantile agent acting for that person, under a sale, pledge or other disposition, or under an agreement for sale, pledge or other disposition, to a person receiving the goods or documents in good faith and without notice of a lien or other right of the original seller in respect of the goods, has the same effect as if the person making the delivery or transfer were a mercantile agent in possession of the goods or documents of title with the consent of the owner. (2) Subsection (1) does not apply to a sale, pledge or other disposition of goods or of documents of title to goods by a person who has obtained possession of the goods pursuant to a security agreement under which the seller has a security interest as defined in the Personal Property Security Act. RSA 1980 cf-1 s9;1988 cp-4.05 s81 Effect of transfer 11 If a document of title to goods has been lawfully transferred to a person as buyer or owner of the goods, and that person transfers the document to a person who takes the document in good faith and for valuable consideration, the last mentioned transfer has the same effect for defeating a vendor s lien or right to stop in transit as the transfer of a bill of lading has for defeating the right to stop in transit. RSA 1980 cf-1 s10 Mode of transferring documents 12 For the purposes of this Act, the transfer of a document may be (a) by endorsement, or (b) by delivery, if the document (i) is by custom or by its express terms transferable by delivery, or 5
8 RSA 2000 Section 13 FACTORS ACT (ii) makes the goods deliverable to the bearer. RSA 1980 cf-1 s11 Liability of agent 13(1) Nothing in this Act authorizes an agent to exceed or depart from the agent s authority as between the agent and the agent s principal or exempts the agent from any liability for so doing. (2) Nothing in this Act prevents the owner of goods (a) from recovering the goods from an agent, or assignee under an assignment for the benefit of creditors, at any time before the sale or pledge of the goods, (b) from having the right to redeem goods pledged by an agent at any time before the sale of the goods, if the owner or (i) satisfies the claim for which the goods were pledged, and (ii) pays to the agent, if the agent so requires, any money in default of payment of which the agent would by law be entitled to retain the goods or the documents of title to the goods, or any of them, by way of lien as against the owner, (c) from recovering from a person with whom the goods have been pledged any balance of money remaining in the person s hands as the produce of the sale of the goods after deducting the amount of the person s lien. (3) Nothing in this Act prevents the owner of goods sold by an agent from recovering from the buyer the price agreed to be paid for the goods or any part of that price subject to any right of set-off on the part of the buyer against the agent. RSA 1980 cf-1 s12 Powers of agent 14 This Act shall be construed in amplification and not in derogation of the powers exercisable by an agent independently of this Act. RSA 1980 cf-1 s13 6
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