There is an implied warranty of fitness in the law for many goods you buy. Within various acts in Alberta there are exceptions to this basic rule. Under the Sale of Goods Act, when a buyer expressly tells the seller the purpose for which you are purchasing the goods, the seller is bound by a warranty that the goods are fit for that purpose.
In your case, I doubt you told the salesperson at Futureshop that you wanted to take your Ipod out in the cold, put it in your pocket and bump it against things. Even with a crack in the LCD, it probably still plays music which is what you probably bought the device for. Plus there are issues with agency in that the salesperson probably didn't have authority to issue collateral warranties and other kinds of promises.
The extra $100 extends the warranty against manufacturer's defects beyond the standard time offered by the original manufacturer. At least, that's how it works in my past experience.
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