Lien Ch'eng Real Estate violated the Fair Trade Law for misleading its trading counterparts through incomplete disclosure of trading information
Chinese Taipei
Case:
Lien Ch'eng Real Estate violated the Fair Trade Law for misleading its trading counterparts through incomplete disclosure of trading information
Key words:
deceptive acts, concealing important facts, information disparity
Reference:
Fair Trade Commission Decision of 25 March 1998 (the 333rd Commission Meeting); Disposition (87) Kung Ch'u Tzu No 081.
Industry:
Real-estate Agency Industry (6812)
Relevant Laws:
Article 24 of the Fair Trade Law
Summary:
An enterprise that uses misleading methods, such as cheating or concealing important facts, to attract its trading counterparts to enter into trade with the enterprise or to cause its competitors to lose trading opportunities is deemed to have engaged in deceptive acts that can adversely affect trading order, thus constituting a violation of Article 24 of the Fair Trade Law.
In the instant case, a buyer and the respondent were discussing a home purchase. Because the buyer's offer was lower than the price which the seller had authorized the respondent to accept, the respondent asked the buyer to pay some "negotiation fees" for further negotiations with the seller. The respondent told the buyer that its company had available a “ Form of Offer for Real Estate Sale” that was developed in accordance with the version designed by the Ministry of the Interior (MOI). However, it had only availed the buyer of a negotiation fee contract entitled "Offer/Acceptance Form for Real Estate Sale," for review and execution and the buyer was thus misled to believe that the negotiation fees contract was the MOI version of “Form of Offer”. The respondent argued that it did have versions of “Forms of Offer” for Real Estate Sale available for customers to choose; however, it could only advise of the existence of such versions instead of actually giving them because they were not yet in print. This argument is not acceptable to the Commission because the “Forms of Offer for Real Estate Sale” and "Offer/Acceptance Form for Real Estate Sale" may easily be mixed when they were just heard. The respondent on the one hand could not provide its customers both forms so that they could review and compare the two versions, and on the other hand failed to specify the differences between the two while supplying the customers only one version, i.e. the "Offer/Acceptance Form for Real Estate Sale." Thus, it could be deemed as misleading the customers with passive means of concealment, i.e., not fully disclosing trading information, so that the customers regarded the negotiation fees contract entitled the “Offer/Acceptance Form for Real Estate Sale” as the MOI version of “Form of Offer”.
Based on the above, the respondent by misleading the customers with passive means of concealment that was not fully disclose trading information so that its collection of negotiation fees could be covered up was totally against the code of conduct of the real estate business, which relies heavily on the transparency of information and integrity of the service, and therefore violated Article 24 of the Fair Trade Law.
Summarized by Lin, Hsin-wen
Supervised by Hu, Kuang-yu
Appendix:
Lien Cheng Real Estate's Uniform Invoice No. 16151685