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What Happens When The Businesses Refuse To Sell

In most cases, businesses have the right to decide who they do business with.  There are legitimate reasons a business may refuse to sell or supply goods or services to
14 Nov 2016 13:12
What Happens When The Businesses Refuse To Sell
Commerce Commission

In most cases, businesses have the right to decide who they do business with.  There are legitimate reasons a business may refuse to sell or supply goods or services to a customer.

Some of those include but not limited to the following:

  • reliability of the business seeking the supply;
  • the cost of delivery;
  • the presentation of goods and services.

Under the Commerce Commission Decree 2010 (CCD2010), refusal to sell becomes a breach if:

(1) the principal or agent, refuse to sell goods or services except on the condition that other goods or services are also purchased from that person or from any other person, or attempt to impose any such condition;

(2) Nothing in this section renders unlawful any condition against the separate sale of any goods forming part of a set or forming part o f a single or composite article.

 

When refusing to supply 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.

 

Examples of refusal to sell that is legal

In general, a seller has the right to choose its business partners.

A firm’s refusal to deal with any other person or company is lawful so long as the refusal is not the product of an anticompetitive agreement with other firms or part of a predatory or exclusionary strategy to acquire or maintain a monopoly.

This principle was laid out by the Supreme Court more than 85 years ago.

In the absence of any purpose to create or maintain a monopoly, the act does not restrict the long recognised right of a trader or manufacturer engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal.

Some examples include but not limited to the following –

  • a small clothing store was recently dropped by the maker of a popular line of clothing because its competitors complained that it was selling below the suggested retail price;
  • a manufacturer adopted a policy to terminate any dealer that does not honor provide full customer service and prevents other dealers, who may not provide full service, from taking away customers and “free riding” on the services provided by other dealers.
  • A trader may refuse to sell to a customer if the customer is seeking for a credit sale.

 

Examples of refusal to sell

that is illegal

Refusing to sell or supply goods or services to a customer based on certain attributes, such as their:

  • age
  • sexual orientation, gender identity and intersex status
  • race
  • disability.

 

Other examples may include the following-

  • A caravan park refuses to allow a booking for a group of 18 year olds because they’re concerned about them being ‘rowdy’;
  • A hotel refuses to accept a room booking for a same-sex couple because gay relationships make them feel uncomfortable;
  • A coffee shop manager refuses to serve someone because they’ve had other customers of the same racial background cause trouble in the past.

Next Week: Pull Dates

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. For more information/details on Fiji Commerce Commission and Commerce Commission Decree 2010, visit our website on http://www.commcomm.gov.fj or join their Facebook page at https://www.facebook.com/commcomm.gov.fj



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