Han-yang Handicraft enterprise was complained for unduly selling raw materials for household processing under the guise of soliciting household contracts in violation of the Fair Trade Law

Chinese Taipei

Case:

Han-yang Handicraft enterprise was complained for unduly selling raw materials for household processing under the guise of soliciting household contracts in violation of the Fair Trade Law

Key Words:

deceptive; concealing important trading information

Reference:

Fair Trade Commission Decision of 30 July 1997 (the 300th Commission Meeting); Disposition (86) Kung Chu Tzu No. 143

Industry:

miscellaneous products manufacturing industry (3999)

Relevant Laws:

Article 24 of the Fair Trade Law

Summary:

1. FTL Article 24 states, "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 refers to the one satisfying social ethics and the principle of efficiency competition, including no deception or improper restraint between trading parties, and no hindrance preventing competitors from fair competition.

2. Han-yang Handicraft Enterprise (Han-yang) was complained having solicited people to sign household processing contracts in the name of soliciting household contractors. Scripts such as "easy to pick up," "easy to do," "high profitability" and "cash compensation" were used to attract people to apply. The applicants were required to make a specific amount of payment in exchange for dyestuffs that were hardly commensurate with the payment. After starting the actual processing work, the contractors found out that the work was far too difficult to accomplish and wanted to return the dyestuffs and terminate the contract. However, Han-yang had deprived the contractors in the contract of any right of returning the raw materials, and the contract was effective for only two months, which allowed Han-yang easily to escape from liability. Such acts were in violation of the principles of equity and good faith of contracts. Han-yang was aware that the work in question was highly technical, time-consuming, and easily to fail at the beginning of the process. There was also material information that the trading counterpart should have been advised. In view of this, Han-yang's failure to perform its duty to advise the contractors of such information was serious. Moreover, as Han-yang aimed to reap windfall profits by selling the contractors the dyestuffs, what it did actually constitutes a fraud that swindled the trading counterparts out of their money by concealing important trading information.

3. In summary, Han-yang has engaged in deceptive acts that might adversely affect trading order, thus constituting a violation of Article 24 of the Fair Trade Law.

　

Summarized by Chang, Lun-chen
Supervised by Shih, Chin-tsun

＊＊: For information of translation, click here

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