Province of Alberta

FACTORS ACT

Revised Statutes of Alberta 2000

Chapter F-1

Current as of January 1, 2002

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 FACTORS ACT

Chapter F-1

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,
 RSA 2000
Section 2 FACTORS ACT Chapter F-1

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.

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 RSA 2000
Section 3 FACTORS ACT Chapter F-1

(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

(i) of other goods,

(ii) of a document of title to goods, or

(iii) of a negotiable security,

or

(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

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Section 6 FACTORS ACT Chapter F-1

Application
6 Sections 2 to 5 do not apply to a consignment to which the
Personal Property Security Act applies.
1988 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
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 RSA 2000
Section 10 FACTORS ACT Chapter F-1

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

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Section 13 FACTORS ACT Chapter F-1

(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

(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,

or

(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

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