Kua Niu Tzu Real Estate Broker Co. Ltd., while in real estate brokering, engaged in acts of deception capable of affecting trading order in violation of Article 24 of the Fair Trade Law

Chinese Taipei


Case:

Kua Niu Tzu Real Estate Broker Co. Ltd., while in real estate brokering, engaged in acts of deception capable of affecting trading order in violation of Article 24 of the Fair Trade Law

Key Words:

real estate broking, acts of deception

Reference:

Fair Trade Commission Decision of May 17, 2000 (the 445th Commissioners' Meeting)

Industry:

Real Estate Brokerage (6812)

Relevant Laws:

Article 24 of the Fair Trade Law

Summary:

  1. If an enterprise, by means of deception or concealment of important facts, instigates its counterpart trading with it or causes its competitor losing trading opportunities, it is to be found to have engaged in deceptive acts capable of affecting trading order in violation of Article 24 of the Fair Trade Law ("the Law"). The Fair Trade Commission (the "Commission") found that Kua Niu Tzu Real Estate Broker Co. Ltd. ("the respondent"), when negotiating with house owners, required homebuyers to sign copies of the "House Purchase Agreement" ("the Agreement"), which was previously prepared by the respondent. The respondent claimed that according to the provisions of "the Agreement", buyers, in order to gain sellers' trust, had to pay brokerage, which would become part of the deposit when the transaction was settled. However, the respondent failed to inform buyers that they could choose not to pay the brokerage, but still negotiating with sellers. Instead, the respondent repeatedly stressed that according to "the Agreement" buyers were required to pay the brokerage, and pointed to buyers that "the Agreement" included a "conditional deposit" clause. By doing so the respondent misled buyers to deem "conditional deposit" as what was generally known as "brokerage". The Commission therefore found that the respondent had deliberately concealed important transaction information to enable buyers signing "the Agreement", and that the respondent had deceived buyers into believing that they were obliged to pay brokerage.

  2. The Commission found that although "the Agreement" did not include the word "brokerage", the complainant, while signing "the Agreement", had paid a NT$ 30,000 check to the respondent as conditional deposit. It was agreed that when the seller decided to sell, the conditional deposit would turn into deposit. The Commission also found that according to Article 4 Paragraph 3 of "the Agreement" if the buyer violated "the Agreement" and failed to purchase, he could not reclaim his "conditional deposit". The character of it was the same as a "brokerage". Therefore, "the Agreement" at this case could be regarded as a "brokerage" contract. Secondly, before signing "the Agreement" with the complainant and obtaining NT$ 30,000 from the complainant, the respondent failed to disclose fully to the complainant the essence of the Standard Offer prepared by the Ministry of the Interior, the interchangeable relationship between the Standard Offer and the "brokerage" and the right to choose between the two options. That was obviously instigating its counterpart trading with it by concealing important transaction information, which constituted as a deceptive act capable of affecting the trading order and violated Article 24 of the Law.

  3. The Commission concluded that the respondent, requesting a brokerage and failing to inform the buyer of the option of applying the Standard Offer prepared by the Ministry of the Interior, committed a deceptive act capable of affecting the trading order in violation of Article 24 of the Law. Even though the Commission had found that this kind of action violated the Law, the respondent did not fully observe the rule. After considering the motivation of the respondent and the injury of the act on the trading order, the Commission, pursuant to the fore part of Article 41 of the Law, imposed the respondent a fine of NT$250,000.

Appendix:

Kua Niu Tzu Real Estate Broker's Uniform Invoice Number: 96955854


Summarized by Li, Li-Hsiu
Supervised by Hung, Te-Ch'ang


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