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Monopolistic and Restrictive Trade Practice

What is Unfair Trade Practice ?

An unfair trade practice means a trade practice, which, for the purpose of promoting any sale, use or supply of any goods or services, adopts unfair method, or unfair or deceptive practice.

Unfair practices may be categorized as under:

1.False Representation

The practice of making any oralnor written statement or representation which:

  • Falsely suggests that the goods are of a particular standard quality, quantity, grade, composition, style or model;
  • Falsely suggests that the services are of a particular standard, quantity or grade;

  • Falsely suggests any re-built, second-hand renovated, reconditioned or old goods as new goods;
  • Represents that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which they do not have;
  • Represents that the seller or the supplier has a sponsorship or approval or affiliation which he does not have;
  • Makes a false or misleading representation concerning the need for, or the usefulness of, any goods or services;
  • Gives any warranty or guarantee of the performance, efficacy or length of life of the goods, that is not based on an adequate or proper test;

  • Makes to the public a representation in the form that purports to be-
    1. a warranty or guarantee of the goods or services,
    2. a promise to replace, maintain or repair the goods until it has achieved a specified result,

if such representation is materially misleading or there is no reasonable prospect that such warranty, guarantee or promise will be fulfilled

  • Materially misleads about the prices at which such goods or services are available in the market; or
  • Gives false or misleading facts disparaging the goods, services or trade of another person.

2.False Offer of Bargain Price-

Where an advertisement is published in a newspaper or otherwise, whereby goods or services are offered at a bargain price when in fact there is no intention that the same may be offered at that price, for a reasonable period or reasonable quantity, it shall amount to an unfair trade practice.

The bargain price, for this purpose means-

  1. the price stated in the advertisement in such manner as suggests that it is lesser than the ordinary price, or
  2. the price which any person coming across the advertisement would believe to be better than the price at which such goods are ordinarily sold.

Free Gifts Offer and Prize Schemes

The unfair trade practices under this category are:

  • Offering any gifts, prizes or other items along with the goods when the real intention is different, or
  • Creating impression that something is being offered free alongwith the goods, when in fact the price is wholly or partly covered by the price of the article sold, or
  • Offering some prizes to the buyers by the conduct of any contest, lottery or game of chance or skill, with real intention to promote sales or business.

4.Non -Compliance of Prescribed Standards

Any sale or supply of goods, for use by consumers, knowing or having reason to believe that the goods do not comply with the standards prescribed by some competent authority, in relation to their performance, composition, contents, design, construction, finishing or packing, as are necessary to prevent or reduce the risk of injury to the person using such goods, shall amount to an unfair trade practice.

5.Hoarding, Destruction, Etc.

Any practice that permits the hoarding or destruction of goods, or refusal to sell the goods or provide any services, with an intention to raise the cost of those or other similar goods or services, shall be an unfair trade practice.

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