Unfair and Restrictive Trade Practices

In one line

An unfair trade practice is a deceptive way of promoting a sale, a restrictive trade practice manipulates supply or price, and an unfair contract is a one-sided term.

In the wording a student can write in an exam: section 2(47) defines an unfair trade practice as a trade practice which, for the purpose of promoting the sale, use or supply of any goods or the provision of any service, adopts any unfair method or unfair or deceptive practice, and enumerates nine heads; section 2(41) defines a restrictive trade practice as one which tends to bring about manipulation of price or its conditions of delivery, or to affect the flow of supplies in the market, so as to impose unjustified costs or restrictions on consumers; and section 2(46) defines an unfair contract as one between a manufacturer, trader or service provider and a consumer having terms which cause a significant change in the consumer's rights.

Unfair trade practice: the nine heads of section 2(47)

1. False statements about goods or services. Falsely representing that goods are of a particular standard, quality, quantity, grade, composition, style or model; that services are of a particular standard, quality or grade; that rebuilt, second-hand, renovated, reconditioned or old goods are new; that goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which they do not have; that the seller has a sponsorship, approval or affiliation which he does not have; a false or misleading representation about the need for or usefulness of goods or services; a warranty or guarantee of performance, efficacy or length of life that is not based on an adequate or proper test, the burden of proving an adequate test lying on the person who raises it; a purported warranty or promise to replace, maintain or repair that is materially misleading or has no reasonable prospect of being carried out; materially misleading the public about the price at which goods are ordinarily sold; and giving false or misleading facts disparaging another's goods, services or trade.

2. Bargain prices. Advertising goods at a bargain price where there is no intention of offering them at that price. The Explanation defines a bargain price as one stated in an advertisement to be a bargain price, or one a reader would reasonably understand to be a bargain price.

3. Gifts, prizes and contests. Offering gifts, prizes or other items with no intention of providing them, or creating the impression that something is free when its cost is covered by the charge; conducting a contest, lottery or game of chance or skill to promote a sale or business interest, except as may be prescribed; and withholding from participants the final results of a scheme.