Tuntex Distinct Corp. violated the Fair Trade Law for failing to provide contract for review and the change of its original product design
Chinese Taipei
Case:
Tuntex Distinct Corp. violated the Fair Trade Law for failing to provide contract for review and the change of its original product design
Key Word:
patently unfair acts, dominant position, contract review
Reference:
Fair Trade Commission Decision of June 23, 1999 (the 398th Commission Meeting)
Industry:
Construction Investment (6811)
Relevant Law:
Article 24 of the Fair Trade Law
Summary:
The complainant purchased a “pre-sold” [i.e. yet-to-be-built] apartment from the respondent, Tuntex Distinct Corp., without taking a five-day period to review the contract prior to signing. Tuntex Distinct told the complainant that it could still raise any questions relating to the contract after the signing. Due to the poor sales of the apartment building, the respondent wished to change the original design of the apartment that, in the complainant’s opinion, would cause the apartment to be too different from the original one. As a result, the complainant intended to cancel his purchase. However, the company indicated that it would refund only the prepaid amount but not the interest thereafter accrued. The company further asserted that its right to alter the original design was stipulated in the contract. Accordingly, the complainant claimed that he did not take the contract home for a five-day review before signing it, and alleged that Tuntex Distinct had post false advertisements.
To safeguard the rights of purchasers of pre-sold apartments to fully review the contract and to adjust the asymmetry in information accessible to the building contractor and purchaser, the construction firm should provide the purchaser sufficient time to review the contract. Otherwise, the Fair Trade Commission (the Commission) may treat the failure to do so as an “patently unfair act” under Article 24 of the Fair Trade Law (FTL).
Investigation had shown that the first
page of the contract in dispute stated that the purchaser was entitled to a
reviewing period of not less than five days. When asked about this contract
provision, the respondent informed the complainant that any questions
relating to the contract could be raised at later dates. However, from the
time the contract was signed to the time when the complainant learned of the
design changes, which was about five months, the complainant did not raise
any question relating to the provisions in the contract. Thus, it was
difficult to determine the presence of “patently unfair acts” in this
case.
With regard to the design changes, both parties agreed that the respondent
made the alteration in consideration of the poor sales, and that the
original advertisements did not intentionally present false or misleading
information. Therefore, Article 21 of the FTL is not applicable here. In
addition, the respondent had informed the purchasers of the design changes,
and had offered the purchasers options to either exchange for other products
or to terminate the contract and receive a refund. The way the respondent
handled the dispute did not violate the FTL.
Summarized by Liang, Ya-ch’in
Supervised by Hu, Kuang-yu
Appendix:
Tuntex Distinct Corp.’s Uniform Invoice Number: 12430841