Ta Hsin Advertising Company violated Article 24 of the Fair Trade Law for its failure to disclose to its clients the option to use "Letter of Offer", provided by the Ministry of Interior, as an alternative to the requirement of negotiation deposit
Chinese Taipei
Case:
Ta Hsin Advertising Company violated Article 24 of the Fair Trade Law for its failure to disclose to its clients the option to use "Letter of Offer", provided by the Ministry of Interior, as an alternative to the requirement of negotiation deposit
Key words:
deceptive act, letter of offer, negotiation fees, information asymmetry
Reference:
Fair Trade Commission Decision of the 329th Commission Meeting; Disposition (87) Kung Ch'u Tzu No. 078
Industry:
Real Estate Brokerage Industry(6812)
Relevant Laws:
Article 24 of the Fair Trade Law
Summary:
Article 24 of the Fair Trade Law provides that no enterprise shall engage in any deceptive or obviously unfair act that may adversely affect the order of trade. A deceptive act refers to an enterprise's act of misrepresentation or withholding important information by which its trading counterpart or competitor is caused to lose opportunity for trading. An obviously unfair act refers to an enterprise's act of inappropriately controlling its trading counterpart, e.g., depriving its trading counterpart of the choice on doing business or the terms of transactions. Obviously unfair acts engaged by an enterprise include forcing or badgering its trading counterpart or abusing its advantageous position in the transaction over its trading counterpart. In the course of a real estate transaction, the buyer obviously lacks equal information when compared with the real estate broker. A real estate broker is found committing a deceptive act if it fails to disclose complete information to its client regarding the alternative options (e.g., offer by letter) when asking a client to deposit the "negotiation deposit." This Commission's 277th meeting rendered its decision to order that real estate brokerage industry rectify its actions on or before 31 August 1997. From 1 September 1997 on, a real estate broker will be considered in violation of Article 24 of the Fair Trade Law if it fails to inform any client of the option of "letter of offer” established in consumers‘ interest by the Ministry of Interior (hereinafter the “MOI”) when asking its client to deposit the "negotiation deposit". The negotiation deposit contract made in the instant case was entered into on 10 November 1997 which was past the deadline specified for rectification.
During the investigation, the respondent admitted that it usually recommended the client choose the "negotiation deposit" instead of the "letter of offer" because the latter is not binding. The respondent failed to produce any evidence to prove it had advised the client of the letter-of-offer option. Therefore, the complaint against the respondent for its failure to disclose the option of the letter of offer should be taken as true statement of facts.
It is true that the transaction in the instant case was carried out successfully, that the respondent had converted the negotiation deposit made by the complainant into contract deposit for the seller, and that the complainant did negotiate with the buyer through the respondent who had not abused its advantage of having the negotiation deposit. Notwithstanding the above facts, the respondent is still found to have violated Article 24 of the Fair Trade Law by not disclosing to its client the alternative, which was an act of withholding important transaction information from its trading counterpart with the intention to cause the trading counterpart to conduct a business transaction with it.
Summarized by Chang, Hsiang-Hsi
Supervised by Hu, Kuang-Yu
Ta Hsin Advertising Company's Uniform Invoice No.: 86623553