Kung Hsin Rehouse violated the Fair Trade
Law for failing to fully disclose trading information through passive concealment
thus misleading trading counterparts
Chinese Taipei
Case:
Kung Hsin Rehouse violated the Fair Trade Law for failing to fully disclose
trading information through passive concealment thus misleading trading counterparts
Key Words:
deceptive acts, concealment of important facts, information disparity
Reference:
Fair Trade Commission Decision of January 12, 2000 (the 427th Commissioner's
Meeting); Disposition (89) Kung Ch'u Tzu No. 009
Industry:
Real Estate Brokerage (6812)
Relevant Laws:
Articles 24
of the Fair Trade Law
Summary:
- Regarding that the buyer is in an obvious inferior position to the broker
with respect to access to real estate transaction information, a broker who
uses its superior position to solicit a brokerage fee without fully disclosing
relevant information or giving the consumer other trading options (such as
using the standard Offer Form drawn up by the Ministry of the Interior [MOI])
will be deemed by the Fair Trade Commission (FTC) as having engaged in a deceptive
act sufficient to affect trading order provided in Article 24 of the Fair
Trade Law.
- In this case, a client discussed with the respondent on a house purchase.
Because his offer fell under the seller's authorized price, the client paid
a brokerage fee to authorize the respondent keeping the price under negotiation.
The client claimed that the respondent failed to inform him that, instead
of signing the brokerage fee contract, he could sign the MOI Offer Form. The
respondent argued that the money paid by the client was a deposit rather than
a brokerage fee.
However, after the brokerage fee contract and the testimony of both the complainant
and the respondent were examined, it was found that on the day of signing
the contract the price indicated on that contract was not the finalized price
of the property. Rather, the respondent was to negotiate price with the house
owner and the two parties would then sign a real estate purchase contract
if they reached an agreement on the terms and conditions of the transaction.
Therefore, the price of the concerned property was not fixed when the client
and the broker signed the contract and the fee paid by the client was by nature
a kind of brokerage fee rather than a deposit.
- The complainant and the respondent could not agree on whether the respondent
had orally informed the client the option of signing an Offer Form instead
of paying a brokerage fee. The respondent called the FTC's attention to a
case in which it had signed an Offer Form with its client. However, the respondent
cited only one case and it was occurred after the case in dispute, which was
thus inadequate as a reference. The respondent also failed to provide any
other compelling evidence to refute the complainant's claim that it had failed
to provide a MOI Offer Form. Therefore, it could not be believed that the
respondent had informed the complainant the MOI Offer Form option.
- In summary, when it solicited the brokerage fee, the respondent failed
to inform the consumer the option of signing a MOI "Offer Form",
which constituted a deceptive act by concealing important trading information
to cause the trading counterpart to trade with it and violated Article 24
of the Fair Trade Law. Therefore, the FTC, according to the forepart of Article
41 of the Fair Trade Law, ordered the respondent to immediately cease the
deceptive act, which was sufficient to affect the order of trade, and to pay
a fine of NT$200,000.
Summarized by Liang Ya-ch'in;
Supervised by Hung Te-ch'ang
Appendix:
Kung Hsing Rehouse's Uniform Invoice Number: 16137615
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