"Gin Ban Shen Super Star Square" of Han Hsiang Co., Ltd. changed its floor plan which violated the Fair Trade Law
Chinese Taipei
Case:
"Gin Ban Shen Super Star Square" of Han Hsiang Co., Ltd. changed its floor plan which violated the Fair Trade Law
Key Words:
false advertising, floor plan, change, obviously unfair acts that are sufficient to affect trading order
Reference:
Fair Trade Commission Decision of June 25, 1997 (295th Commission Meeting); Disposition of (86) Kung Chu Tsu 098
Industry:
Construction Investment Business (6811)
Relevant Laws:
Article 24 of the Fair Trade Law
Summary:
1. Han Hsiang Co., Ltd. was complained for its false advertising on construction of the building of "Gin Ban Shen Super Star Square". The complained advertisement stated that the first floor of the basement was planned to be a gourmet's court. However, it was later changed to be a youngster's clothing and accessories district. The values of these two are extremely different, which made the company involved in the matter of false advertisement.
2. After investigation, it was found that the advertisement in question originally stated that the first floor of the basement would be a fine cuisine's court. In the "Recommended List of Types of Business of Gin Ban Shen Super Star Square Department Store", the first floor of the basement was recorded as "Fine Cuisine's Court". The intended types of business include: bakery, fast food, pizza, coffee, tea house, cold drinks, iced items, and so on. However, due to change of market situation, economic depression, and in consideration of profitability, the intended business types of the floor were subsequently changed. Namely, a gourmet's court originally planned to be at the first floor in the basement was change to be youngster's clothing and accessories district. It was found that the type of use of the building in question fell into a category of "the third commercial district" based on its business characteristics.
According to Article 23 of the "Controlling Regulation on the Type of Use of the Land in Taipei" promulgated in 1988, the type of use of the building in question can be "general retailing business". Further, pursuant to Article 5 of the same Regulation, restaurants can be a type of "general retailing business". Therefore, in accordance with the above Regulation, the building in question can be used as restaurants. Secondly, it was found that the defendant in the application for construction license and the construction blue print of the first floor of the basement had marked that "With regard to the general retailing business, if it was going to be used as restaurants, it should be handled pursuant to other regulations". Therefore, if the construction company originally advertised according to the application for construction license and the construction blue print, and subsequently altered the design due to change of conditionaly and factual needs in conformity with the law, and if such change are acts with good intention for exercising rights, and it did not intentionally deceive the buyer by false, untrue or misleading advertisement, it would be difficult to consider that Han Hsiang had violated Article 21 of the Fair Trade Law.
3. However, Article 24 of the Fair Trade Law provides that "in addition to what has been provided for in this Law, an enterprise shall not conduct other deceptive or obviously unfair acts that are sufficient to affect trading order". The so-called "trading order" shall include the trading order among enterprises and the trading order between enterprises and consumers. Therefore, when an enterprise is engaging in commercial activities, if it, in the course of trading, conducts deceptive or obviously unfair acts that are sufficient to affect trading order, it will violate Article 24 of the Fair Trade Law. Therefore, if the construction company change the floor plan originally publicized in the advertisement without notifying the original buyers, and made the original buyers having no choices but to accept the change, it was obviously taking advantage of its superior position that it had received deposit. Such act constitutes an unfair act that is sufficient to affect the trading order.
4. In this case, Han Hsiang, the defendant, originally advertised that the first floor of the basement would be fine cuisine's court. In the "Recommended List of Types of Business of Gin Ban Shen Super Star Square Department Stores", the first floor of the basement was recorded as "Fine Cuisine's Court". However, due to change of market situation, economic depression and in consideration of profitability, the intended types of business of the floor were subsequently changed. Namely, a gourmet's court originally planned to be at the first floor of the basement was changed to be youngster's clothing and accessories district. It failed to give prior notice to the original buyers which forced the original buyers to accept the change without other alternatives. It was found that although change of the floor plan by the construction company was not groundless, the original buyers nevertheless suffered some damages.
The construction company should have notified the original buyers and given them choices such as expression of consent, rescission of contract, reduction of prices or other settlements, which would be considered equitable. Further, it was found that with regard to furnishing, prices of products, changes of seasonal sales, and adjacent businesses in its surroundings are extremely different between clothing and accessories business and the gourmet's food business. Upon expiration of the six-year lease, if the party who decides to engage in food retailing business according to his/her original intent, and comes into the clothing and accessories district with the business type of food retailing stores, it will be very difficult. Therefore, this type of acts by the defendant to change the intended types of business of the floor plan along, was obviously taking advantage of its superior position that it had received deposits. Such act constitutes unfair acts that are sufficient to affect trading order, and thus in violation Article 24 of the Fair Trade Law.
Summarized by Wu, Tsuei-Feng
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