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What Is Conditional Sale?

Conditional Sale is the attachment of conditions to the sale or supply of goods or services to customers that if not met would result in the forfeiture of the sale.
17 Oct 2016 13:30
What Is Conditional Sale?
Commerce Commission

Conditional Sale is the attachment of conditions to the sale or supply of goods or services to customers that if not met would result in the forfeiture of the sale. This occurs when a principal or agent, refuse to sell or supply goods or services except on the condition that other goods or services are also purchased from that person or from any other person, or the supplier attempting to impose any such condition.

When conditional sale is allowed

As a general rule, suppliers have the right to choose who they wish to deal with and there are many reasons why a supplier may refuse to supply goods or services.

For example, a supplier may choose not to supply a business on the basis of the reliability of that business, the cost of delivery, or the presentation of goods and services. Similarly, a wholesaler or manufacturer may find it too costly or inconvenient to sell to everyone who asks.

If a supplier decides not to supply a business and their reason is not an improper one, the client business will have to renegotiate terms with that supplier or seek alternative suppliers.

When conditional sale is breaking the law

There are a few circumstances, where a suppliers’ refusal to supply is breaking the law.

This may occur when a supplier is:

• misusing their market power

• involved in a boycott

• imposing minimum resale prices on retailers

• engaging in exclusive dealing

• acting unconscionably.

If you believe your supplier is withholding supply illegally

If you think that your supplier is illegally withholding supply:

• in the first instance approach the supplier to discuss the reason for refusal. Perhaps changes can be made to resolve the issue

• trade associations or industry bodies may be able to help by suggesting improvements to marketing strategies or acting as an arbitrator to settle disputes

• shop around for another source of supply – an alternative supplier may even offer a better deal

• consider mediation or taking private legal action

• notify the Fiji Commerce Commission with as much documentary evidence as possible to support your concerns

Examples:

There are many local examples of such conduct in recent times such as –

• Refusing to sell bread without the purchase of butter from the same supplier;

• Refusing to supply torch if battery if battery is not bought from the same supplier;

• Refusing to sell cars if finance not arranged in-house –etc.


Next Week: Adulteration


This is a weekly column compiled by the Fiji Commerce Commission in the hopes of raising awareness on what the FCC does so people can benefit from developing a better understanding,



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