Wan Shieh Enterprises Co., Ltd.

Case:

Key Words:

pre-construction homes, security deposit, contract review

Reference:

Fair Trade Commission Decision of November 23, 2006 (the 785th Commissioners' Meeting); Disposition (95) Kung Ch'u Tzu No. 095156

Industry:

Buildings Construction (4100)

Relevant Laws:

Article 24 of the Fair Trade Law

Summary:

1. The complainant of this case stated that Wan Shieh Enterprises Co., Ltd. (hereinafter called "Wan Shieh") claimed that the house procurement contracts had not been printed and failed to provide contracts to the purchasers when collecting the security deposit for the pre-construction homes, Duan Nan Fa La Lee (originally called "Duan Nan LOFT").
2. Findings of FTC after investigation: When the purchasers were present at the sales place of "Duan Nan Fa La Lee," there were no contract samples displayed or prepared for the public to review or take. Wan Shieh claimed that the contracts were not yet printed or were placed at the office when collecting the security deposit from the purchasers before its construction license was obtained. Around the time when Wan Shieh obtained its construction license, it requested the purchasers to remit the security deposit before the contracts were able to be provided.
3. Grounds for disposition:
   (1) Before Wan Shieh obtained the construction license, it had already built a sample home for the purchases to view and pre-order. In the event that a purchaser was interested in pre-ordering, both parties would immediately sign a "Temporary Home Purchase Certificate," which explicitly contained the unit number, price, security deposit and the payment scheme. There was obviously a trading relationship between Wan Shieh and such a purchaser, though Wan Shieh failed to provide a contract before collecting the security deposit. Moreover, after Wan Shieh obtained the construction license, it requested the purchasers to remit the security deposit first in order to obtain the contract. Wan Shieh's act of requesting the purchasers to pay a certain amount of money (whether such amount was called security deposit, deposit, negotiation fee or pre-order fee) for the provision of contracts for review would cause the purchasers to be the disadvantaged party to the trade in terms of information accessibility and sustain the risks of losing said pre-paid amount. Such an act is certainly a conspicuously unfair act sufficient to affect trading order and a violation of Article 24 of the Fair Trade Law.
   (2) After considering the motivation, purpose, and expected improper benefit of the unlawful act of Wan Shieh; the degree of the act's harm to market order; the duration of the act's harm to market order; benefits derived on account of the unlawful act; the scale, operating condition, sales and market position of the enterprise; whether or not the type of unlawful act involved in the violation has been correct ed or warned by the Central Competent Authority; types and number of and intervals between past violations, and the punishment for such violations; remorse shown for the act and attitude of cooperation in the investigation; and other factors, the FTC ordered Wan Shieh to immediately cease the unlawful act and imposed an administrative fine of NT$430,000.

Appendix:
Wan Shieh Enterprises Co., Ltd.'s Uniform Invoice Number: 12483972

Summarized by Yang, Chung-Lin; Supervised by Chen, Yuhn-Shan