If you want to terminate your lease contract with purchase option, here are the options available to you:
- return the item to the merchant;
- purchase the item to resell it;
- assign your lease.
Purchasing the item
If you can afford it, and if allowed under the terms of the contract or the merchant agrees, you can purchase the leased item for the balance owing of the lease contract. You can then resell the item.
This is a more advantageous solution in 2 situations:
- the item's market value is higher than the balance owing of your contract (the amount you have left to pay);
- the loss sustained is lower than the cost of cancelling the contract.
Assigning the lease or subletting the item
You can assign the lease contract to another person. This practice is called "assignment," also known as a "lease transfer." Assignment frees you of any liability.
You can also sublet the item, in which case you remain liable for the lease contract.
If you decide to assign your lease contract or sublet the item:
- you must obtain the consent of the merchant and provide him or her with the name and address of the person to whom you want to assign the lease or sublet the item;
- if the merchant has not notified you of his or her refusal within 15 days after receiving the notice of assignment or subletting, the merchant is deemed to have agreed;
- if the merchant refuses, you can appeal that decision before the courts. It will then be up to the merchant to show that the reasons for refusing are serious.
Clauses that prohibit assignment or subletting
Some merchants add clauses to their long-term lease contracts that prohibit assignment or subletting. Others charge fees for assignment or subletting that exceed what could be deemed reasonable expenses.
Such clauses may be considered abusive, in particular where they force you to return the item to the merchant and pay a high cancellation penalty for damages. In cases of litigation with a merchant in this regard, only the courts can rule on the outcome.
Last update : May 3, 2021
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The information contained on this page is presented in simple terms to make it easier to understand. It does not replace the texts of the laws and regulations.